Dollar fall restricts Saudi holidaymakers

WEAK DOLLAR: Saudi holidaymakers are turning to the US and Asia intead of European destinations due to the dollar's weakness. (Getty Images)

The weakness in the US dollar will push more Saudi holidaymakers to turn to the US and Asian countries instead of European destinations this summer, a leading Saudi travel operator said on Monday.

Some five million Saudis are expected to travel abroad this summer but many will avoid Europe because of high prices after the Saudi riyal declined with the dollar, said Nasser Al-Tayyar, chairman of Al-Tayyar Travel Group, the largest travel operator in the world's largest oil exporting nation.

Record inflation in nearby destinations such as the UAE, popular with Saudis seeking to escape the austere lifestyle in the strict Islamic kingdom, is backing this trend.

"The industry in Dubai is using the euro as benchmark for pricing tourism-related activities... In the US, you can rent a room for $300 per week, which does not cover the cost of a one-night stay in Dubai," Al-Tayyar told newswire Reuters in an interview.

Like other Gulf Arab states that peg their currencies to the dollar, Saudi Arabia faces a fall in the value of its currency and surging inflation as its economy booms, fuelled by a six-fold increase in oil prices during the last six years.

While oil prices have been setting new records virtually every month this year, the decline in the US dollar has been reducing the options of the average Saudi holidaymaker.

"The dollar decline has pushed down the value of Gulf [Arab] currencies by up to 45% versus the euro," Al-Tayyar said.

"The number of Saudi tourists visiting Western European countries fell 40% this year... You can almost say that only Saudis that are wealthy enough to have property in London or Paris now go to Europe," he said.

The dollar's fall has, however, led to growing interest by Saudis for countries like the US, India, China, South Korea, Australia and Hong Kong.

"These are new markets that never existed before on the average Saudi traveller's map," Al-Tayyar said.

"Income per capita in Saudi Arabia is now among the weakest in Arab Gulf countries," he said, noting that the local travel industry was still suffering the repercussions of a stock market crash in 2006 on Saudi citizens.

But the rise in demand for the United States and Asian countries is not threatening to dethrone Egypt and Malaysia as most popular destinations for Saudi holiday-makers, he said. (Reuters)

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