Opening up the Kingdom

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The Kingdom of Saudi Arabia welcomed more than 1.2 million Middle East visitors between January and March 2006, accounting for 46% of all arrivals in the Q1 period, which included the Hajj and Umra season.

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Mada’in Saleh in the north of KSA was built by the same ancient civilization that constructed the temples at Petra in Jordan.

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Jeddah offers visitors plenty of diving opportunities in the Red Sea. Several areas along this coastline have been earmarked for future tourism development.

The Kingdom of Saudi Arabia dominates the Middle East’s outbound tourism market in terms of volume, yet inbound tourism has been largely restricted to regional business travel and Hajj and Umra pilgrimages.

The Saudi Government’s Supreme Commission for Tourism (SCT) is responsible for developing the kingdom’s travel industry, with ambitious plans to grow the number of inbound tourists and provide jobs for some 1.5 million Saudi Arabians in the next 20 years.

The introduction of tourist visas has been a matter of much discussion since the last Arabian Travel Market in May 2006, but no concrete policy has been revealed to date, and although Saudi Arabian Airlines’ inbound tours department can issue tourist visas, the vast majority of people visiting KSA are doing so for religious or business reasons.

But tour operators within the region are convinced that 2007 will mark a new era in Saudi Arabia’s developing inbound industry, as destination development programmes get underway and entry policies are clarified.

Dubai-based tour operator, Alpha Tours, has identified the potential of this emerging market, and recently announced plans to take over the 28 offices of the Saudi Travel and Tourism Bureau (STTB), from January 15.

“This is an opportunity for Alpha Tours to use its contacts worldwide and to encourage people to come to KSA, especially since there are new regulations that will come out shortly for the visas,” explains Ghassan Aridi, CEO, Alpha Tours.

Aridi believes that details of the new visa regulations could be released at ITB this March, marking the start of the process that will ‘open up’ Saudi.

“The Saudi authorities are promoting KSA and trying to have selective tourists coming to Saudi from selective markets,” he explains.

Due to the international political situation, visitors from feeder markets such as Europe, Japan, the US and Australia, are unlikely to come to the kingdom for leisure tourism at this stage, but the number of visitors coming from the Middle East and South Asia will continue to grow, he adds.

The re-branded STTB Alpha offices will sell Alpha Holidays packages for the massive Saudi Arabian outbound market, as well as packages for inbound tourists who want to come to Saudi Arabia for leisure tourism.

“Apart from Hajj and Umra, there are a lot of things to be offered in KSA,” says Aridi.

“You have many cultural and historical sites and there are fantastic areas in the south of KSA like Akhbar, where the weather is extremely nice.”

He says GCC families in particular would be keen to explore the leisure options available in the kingdom.

“There is a good product there, but it needs to be upgraded with different facilities and infrastructure.

There are a lot of nice beaches in Jeddah and good diving sites that can be developed into resorts. Also, there are some very good cultural sites like Mada’in Saleh near Riyadh.”

Flight prices to KSA remain comparatively high for a regional destination, and hotel rates can be astronomical during Eid, Hajj and Umra periods, but this is likely to change as the country opens up and more hotels come online, he adds.

Incentives and corporate groups will play a major role in the early stages of developing the business, paving the way for leisure tourists to discover the country: “We will be handling a lot of incentives and corporate groups there,” says Aridi.

“MICE business is the most interesting and this will be our main and core business for the inbound market for the time being. Things will take some time. It already has taken some time, but finally it will happen.”

Hotels in Riyadh are already enjoying good year-round occupancy, receiving a constant flow of local and international business groups and domestic tourists.

“The demand is very high now in Riyadh, but we have been busy nearly every other month this past year [too],” explains Tarek Bekheit, director of marketing at the Four Seasons Hotel Riyadh, which is located in the iconic Kingdom Centre.

“We really only slow down during the Holy Month of Ramadan and throughout the summer months (July and August).”

The hotel has 249 guest rooms, including 32 suites and 20 residential suites, as well as a 3429m² health club, and 7247m²of meeting and function facilities.

According to Bekheit, 45% of guests are corporate clients, compared to just 17% leisure visitors, all of whom are domestic tourists.

Saudia rules the skies

For a destination the size of Saudi Arabia to successfully ‘open up’, an airline with considerable recognition and experience in the market is required.

The inbound tourism market was effectively kick-started by national carrier, Saudi Arabian Airlines, in the mid 1990s, with an initiative called Discover Saudi Arabia, an invitation-only educational tourism programme, targeted at high-income scientists and businessmen from the US, Europe and Japan. It involved visits to historical, archaeological and ecological sites across KSA.

According to Abdulaziz A Shaheen, senior manager, tours programs, Saudi Arabian Airlines, the carrier now works closely with the SCT to help develop the kingdom as “a niche tourism destination”.

“[Tourist] visas are in the final stages and will be processed electronically in an automated network connecting SCT, Ministry of Foreign Affairs, local tour operators and Saudi Embassies,” he explains.

“This will ease up and enhance processing and issuing visas to applicants.”

According to Shaheen, the global slump in tourism caused by the security situation, and the economic and geopolitical changes that affected the industry worldwide, was also felt in the kingdom at the beginning of the decade, and the international inbound business has remained decidedly low, “from a few hundred in the mid-90’s to very few thousands in 2006”.

“For inbound tourism, the busiest time is September through to January due to the pleasant climate conditions, with the exception of the Red Sea [where diving tourists visit all-year-round],” he explains.

“Regionally, the biggest number of inbound tourists comes from the GCC and a few international tourists transiting through Dubai and Yemen. China, Eastern Europe, Australia, Taiwan and South America are promising markets.”

Saudia has already introduced accredited Discover Saudi Arabia operators to its international sales counter operators, who can help visitors who buy Discover Saudi Arabia packages get visas and plan itineraries, and assist with organising FAM trips with International Discover Saudi Arabia operators.

“The local tour operator coordinates with his counterpart in the international station about the package and number of visitors, and communicates with the Saudia manager in the station and Saudia Department of Tours Programs in Jeddah,” explains Shaheen.

SCT Initiatives

To assist the development of the inbound market, the SCT has invested around US $130 million in implementing an array of research projects into tourism development programmes and other initiatives to clear the way for the arrival of tourism. These range from licensing programmes for tour guides and trip operators to classifying all of the hotels throughout the kingdom.

A recently completed Red Sea Tourism Development plan aims to create new coastal tourism destinations to help develop longterm sustained tourism in the area around Jeddah and the Red Sea coast.

The plan focuses on the creation of interconnected tourism destinations, taking advantage of the natural attractions of the Red Sea coast and restoring historical ports. To date, the plan has identified five potential tourism destinations. The two principle sites will be developed into resort locations for more than 300,000 people.

The MAS Centre is a department of SCT responsible for collecting and researching information about tourism trends and statistics moving to and from the kingdom, all of which is stored and published electronically for the benefit of investors, operators, researchers and tourists.

According to MAS’s quarterly tourism monitor for Q1, 2006 (January to March), 46% of inbound business to KSA was from the Middle East, accounting for 1.2 million visitors.

South Asia supplied 578,000 visitors, or 22% of the total visitors for the period, most of whom came during January, for Hajj and Umra pilgrimages.

All the other regions represent a negligible number of visits except during the month of January, where all regions show a considerable number of trips to KSA, with the exception of the Americas.

Statistics reveal that outside the Hajj period, the vast majority of visits are business tourism related, followed by travellers visiting friends and relatives (VFR).

More people selected ‘other’ in February and March than ‘leisure’ on their immigration forms, indicating the huge task ahead for the companies in the kingdom that want to promote the KSA as a leisure tourism destination.

While 60% of all arrivals came by air, 35% arrived via land borders, indicating the huge importance of the regional markets and neighbouring countries for tourism.

KSA’s hotels are accustomed to year-round traffic from business travellers, which keeps occupancies high, and more than 968,000 people stayed in hotels in January alone, but leisure travellers from outside the kingdom are rare.

But while plans are in place to develop the inbound sector, many tour operators, including Etihad Holidays and Emirates Holidays in the UAE, still only offer packages to the kingdom based on request.

Religious tourism

It appears that for the time being at least, religious tourism will remain Saudi Arabia’s biggest tourism import. In Q1, 2006, 1.63 million international visitors came to the KSA for religious pilgrimages, accounting for 61% of all visits during that three-month period, followed by business and conference trips (18%), and the VFR trips (10%). Leisure trips represented just 5% of all visits for the period.

For hotels in Medina and Mecca, religious tourism accounts for nearly all guest visits. According to Adel Bibars, general manager of the Anwar Al Madinah Mövenpick Hotel, around 97% of guests staying in the hotel every year are there for religious tourism. “During Hajj season they will stay for eight nights normally, and locals will stay at weekends for two nights,” he explains.

“I should say that the room rates increase by 50 to 100 % during the season.”

During Hajj, all the guests tend to leave and return to the hotel at the same time of day to attend prayer, creating huge logistical issues when it comes to feeding all of them at the same time, he says.

Visitors come from the GCC, Egypt, Indonesia, Malaysia, Morocco, Turkey, South Africa, UK, USA, and Pakistan, he adds.

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