Saudi Commission for Tourism and Antiquities (SCTA) vice president investment, Dr Salah K Al Bukkayet, tells Monika Grzesik why KSA tourism focuses on the domestic market.
What plans and strategies has SCTA implemented for developing tourism in Saudi Arabia?
We started a plan to develop tourism destinations and sights, and we realised that in order to develop the destination it needs to be supported by infrastructure. So that’s why now our government has a very ambitious programme to develop the infrastructure across the whole country, with highways, improving the airport, developing new railways, all these access vehicles that need to be in place before we can start to develop the destination as a tourist attraction.
We are working in parallel to develop the new sights, and new economic cities, as well as the infrastructure programme that the country has undertaken right now in terms of increasing the production of electricity and water, because this kind of development will definitely need to consume a lot of electricity and water.
So it’s a comprehensive integrated kind of development plan. It has a time frame, it’s a five-year programme - although it has been delayed a bit by the economic crisis it is going on the right path and it is in the implementation mood.
How far into the development programme are you now?
We started two or three years ago, so I would say that over the course of three to five years from now we are hoping to see a lot of investment in hotels and theme parks in areas where the infrastructure is not an issue. But if the infrastructure is an issue then we will have to wait. Private developers will have to wait until they see that the infrastructure has been done seriously before they part with their money and inject it into the project.
Are you looking to attract international tourists to Saudi Arabia?
Right now our focus is domestic tourism and religious tourism. And the reason we are focusing on domestic tourism is because of the fact that we are exporting a lot of tourists with a lot of money. The reason Saudi tourists are travelling abroad is because the tourism offering in the country is not acceptable to them both from a quality and a price point of view. So for us it’s not logical to invite somebody to come when the tourism offering is not satisfactory to your own. They have to travel abroad to get this kind of experience so our focus right now over the next three to five years is product development, product development and product development. We need to develop our tourism facilities from a quantity and a quality point of view to the level that we think is satisfactory to our own tourists, because international tourists are by definition very experienced and they know what to expect when they come to another area.
So we better have our country ready for them before they come, otherwise they come and they get disappointed, and then you know the marketing literature tells us that when you get a disappointed customer on average he tells nine to 11 of his friends, relatives or colleagues about his bad experience and this will even increase.
So we would like to focus right now on improving our tourism offering as a country and once we reach that level of conviction that we are now ready to attract international tourists, we will have no problems. We have an expat community of more than six million living within the country and they travel within Saudi Arabia and we have no issues with them.
But are there plans to target the international market too?
For the international market we will not target the same markets as Dubai that’s for sure. Historically, international tourists that usually come to Saudi Arabia come with a specific kind of quality. They are older people coming for cultural reasons, nature reasons, they are not the young, the wild, and we will never target in our plans this kind of tourism. We take a great deal of pride in hosting the two holiest sites in Islam, Mecca and Medina, and what they mean and the implications of that is that we are a Muslim country and a conservative society. But I think we have shown a great deal of respect to people who have come, for example, for MICE reasons — meetings and conferences, or exhibitions, for serious reasons. I think they have been dealt with in a very respectful manner and they have no issues. But don’t expect Saudi Arabia to host wild travellers any time soon.
Do you plan to loosen up the visa regulations to help bring in more international visitors?
Yes, we plan on that once we are confident that the tourism project in the Kingdom is of an acceptable level, we will definitely study this issue. But currently our focus is to look at what we have — the people in Saudi Arabia travelling overseas and spending billions every year outside of Saudi Arabia. The logic here would say to focus on them before you focus on somebody else.
How many hotels are in the pipeline?
Currently we have an undersupply of hotel rooms in Saudi Arabia and we have had this situation for a while. And that’s why a lot of mega projects are being developed as we speak. For example, in Riyadh there are 35 permits to build hotels and currently about 22 are being built. We have a great shortage in hotel investment in Saudi Arabia and people are recognising this, and building new hotels. That’s why we are targeting over a 10-year period to introduce 85,000 rooms into the hotel sector. And 80,000 rooms in the furnished apartment sector.
What are the biggest challenges ahead to developing the tourism sector in Saudi Arabia?
I think improving the legal and administrative framework in the country. To unlock certain bottlenecks that usually prevent investment from taking place. [One of these bottlenecks] is favourable regulations. Usually private investors don’t like the lease terms for example. And the dominant offering from the government agency that owns land is that they offer them lease terms. Usually investors would like to hold some kind of a deed in order to feel encouraged to inject a serious amount of investment. And from the tourism development point of view I see this area as being one that if it were loosened up, we could see a lot more investment coming in to the pipeline.
Are you trying to make the country more attractive for investors?
Yes we are. We have already identified it in a systematic and professional manner and we are working with government entities who control the land - the Municipality and the Ministry of Agriculture that own prime lands on coastal areas and also in the cities - to give this kind of option to partner with the private sector. If you are not willing to sell then at least become a partner in a company for that location or for that project.
Are you trying to attract foreign investors into Saudi Arabia?
There are government incentives for all investors. Saudi Arabia has no issue with money so it’s not really logical to go and attract somebody from outside when you have a lot of money to invest outside. If you have incentives, incentivise everybody. We have national investors with a lot of money that they are investing in Dubai, Egypt, and Lebanon, so why not as well start with them? I think that the international regulative framework that has been worked on by Saudi Arabia General Investment Authority (SAGIA), which is our sister commission, is a logical approach. We want to loosen up the investment environment for both, but we think that if it’s attractive enough, the Saudi Arabian investors will jump first because if it’s their own country, they know it and they live there. So it’s easier than attracting people from far away places.