Sun, sea and Saudi Arabia...?

Saudi Arabia is preparing to shake off its austere image in developing its tourism sector. It has created ambitious plans to train locals to deal with foreign tourists as well as develop various locations around the kingdom to attract those tourists. With record oil returns, there is time to get the strategy right.

The kingdom is initially focusing on domestic tourism. The Secretary General of the Supreme Commission for Tourism (SCT), Prince Sultan bin Salman bin Abdulaziz, told the Oxford Business Group (OBG) there is a growing domestic market with many thousands of Saudis taking holidays abroad every year but the local sector is virtually non-existent. By concentrating on domestic tourism, it is hoped that some of the money spent abroad will instead stay within the kingdom and hopefully be reinvested in Saudi Arabia's tourism sector.

Explaining why the domestic market was being targeted first, Sultan said, "It is not a government imposed restriction... this is the market we need to satisfy first. It is our duty." He said there was no objection in principle to foreign tourists, "we are just not marketing ourselves to them on a major scale yet".

Set up in 2000, the SCT was created to enhance, develop and promote tourism and has spent the last few years formulating various master plans and strategies to develop Saudi Arabia's tourism industry. These range from human resource training to major real estate development and regional strategy formulation. It has also recently taken over responsibility for antiquities and museums from the ministry of education.

"[Plans are based] on the main tourism strengths of Saudi Arabia. We have a constantly improving infrastructure, our people are warm and hospitable, and we have a rich and colourful heritage with amazing historic sites and antiquities. In addition we have major shorelines to attract investors for development, diving and other sports," Sultan told OBG.

What tourism that currently exists is concentrated on the major cities and a few sites of interest, notably the ancient city of Madain Saleh.

During the First Saudi Urban Forum, held in Riyadh in early April, the SCT presented projects to develop six coastal tourism destinations on the Gulf and the Red Sea, five mountain destinations and one in the desert. The locations were chosen to promote the kingdom's natural and cultural heritage resources to attract various niches within the tourism sector.

A major aspect of the decision to develop tourism is the considerable employment opportunities that can be created within a service-based sector such as this, specifically, jobs for Saudis. Describing the range of training already underway or in the works, Sultan said that "within 3-5 years we plan 80% 'Saudiisation'."

Developing the sector fits in with the government's broader strategy of diversifying the economy away from hydrocarbons. The SCT says Saudi Arabia's two Red Sea resorts have the potential to provide 90,000 direct job opportunities and a further 100,000 indirect employment opportunities. The projected tourism expenditure is about $6bn.

Recognising the need to train Saudis how to treat tourists and to be responsible tourists themselves, the SCT began the "Ya Hala!" (Welcome!) programme to educate and train what Sultan refers to as "frontline" employees - people who have face-to-face contact with visitors. This includes hotel staff, security officers and tour guides. As a start, the commission launched a tourist skills development program for 400 Saudi taxi drivers at Riyadh's King Khaled International Airport.

Another aspect of the SCT's decision to start with local tourists is that with the exception of Jeddah and the holy cities of Mecca and Medina, which see an annual influx of pilgrims from all over the world performing Haj and Umrah, few Saudis come into contact with tourists. Sultan said the aim was to prepare what is essentially a very conservative society for tourism at a scale and pace they can cope with.

It is therefore significant that in December 2006 high-level representatives from the kingdom's commission for the promotion of virtue and prevention of vice, whose religious police uphold the Islamic values of society, joined forces with the SCT and the Ya Hala initiative to train their staff to deal with the expected increase in tourists. These special police are often seen by foreigners as intimidating but have of late been on a drive to deliver a more balanced approach.

In February 2006, the kingdom announced it was relaxing visa restrictions and would provide a tourist visa service for Muslims and non-Muslims alike.

The new proposal enables those wishing to visit the kingdom to join organised tours with approved operators, much the same as is required for those coming from overseas to perform the pilgrimages.

So while the SCT's concentration is currently on the domestic market, a serious long-term strategy for more comprehensive access is clearly on the agenda. The commission is looking to announce two more mega coastal real estate developments on the Red Sea by the end of the year. These, plus the concerted drive to create a tourist economy from scratch will no doubt provide opportunities to both the domestic and international investor alike.

(C) Oxford Business Group - www.oxfordbusinessgroup.com