Tourism Investment

The Updated Regulation for Disposal of Municipal Real Estate​​​​​

Why Do We in the Kingdom Focus on Investment in the Tourism Sector?

Investment in the tourism sector is one of the pillars of the Saudi Vision 2030 and a proof for persistence to move forwards to realise its aspirations and goals:
  • Investment in the sector contributes to creating investment opportunities that are profitable for local and foreign investors.
  • We do not consider tourism as only a driver for the economic growth, but also as a bridge for cultural communication with the world, which can enhance the level of understanding and joint respect.
  • Tourism is one of the fastest growing sectors in the world. Over the past eight years, the tourism sector expanded in an average that exceeds the global average.
  • According to statistics by the World Travel and Tourism Council, the sector contributes to some 10 per cent of the global gross domestic product (GDP).
  • Last year, the tourist growth rate stood at 3.9 per cent, while the global economy achieved 3.2 per cent.
  • It is expected for the tourism sector to grow by 3.7 per cent by 2029, which will contribute to more than $13 billion in the global economy that equals 11.5 per cent of the global GDP. 
  • The tourism sector supports 319 million jobs worldwide – which is around one of every 10 jobs around the world – and is responsible for creating one job from each five jobs that were provided over the past five years.
  • At the international level, the tourism sector is considered the most comprehensive through the participation of the biggest proportion of the youth and women compared to the total workforce. 

Developing the Tourism Sector and Providing a Distinguished Tourist Experience for Tourists

Work is under way to develop the main infrastructure and services in the Kingdom with the aim of meeting the increasing demand in a way that accords with the tourism strategy in the Kingdom:
- A total of 150,000 hotel rooms will be built over the coming three years. 70 per cent of these hotels will be implemented by the private sector.
- The Kingdom, in cooperation with local and foreign investors and local investment funds, including the Tourist Development Fund, seeks to establish 500,000 hotel rooms across the Kingdom by 2030.
- Several memoranda of understanding with a total value exceeding 115 billion Saudi riyals have been signed to improve the infrastructure and increase the number of available hotel rooms.
- We in the Kingdom seek to increase the absorptive capacity of the Kingdom’s airports by more than 100 million passengers annually.

COVID-19 Pandemic Impact on the Tourism Sector

  • The economic recession caused by the pandemic greatly affected the tourism sector, mainly the aviation and hotel sectors.
  • The decline of passengers by 26 million.
  • There are 200,000 jobs that were affected in the sector.
  • The Kingdom has offered initiatives to support the economy with 120 billion Saudi riyals.
  • Saudis in the sector have benefited from the initiative to support the salaries by the government. 
  • The Kingdom has launched an initiative to support the Saudis’ salaries at the private sectors with a total value of 9 billion Saudi riyals. This support has also targeted the tourism sector.
  • An opportunity has been offered through the Ajeer programme to exchange benefits among facilities to limit damage.
  • Fees related to the tourism and municipalities have been dropped.
  • Hotels have welcomed more than 50,000 citizens who came back to the Kingdom through the initiative “the return of the citizen”, where they have been hosted in more than 13,000 hotel rooms for periods extending between one to two weeks.
  • With the purpose of stimulating local tourism, the Kingdom has launched the Saudi Summer Season that covers 10 tourist destinations nationwide.

The Tourism Strategy in the Kingdom

The Kingdom has accredited the national strategy for tourism, which highlighted the main lines for the aspiration of the sector that accord with the Saudi Vision goals:
  • We aim to increase the contribution of the tourism sector in the GDP from its current rate of 3 per cent to more than 10 per cent by 2030.
  • The tourism sector targets creating additional one million jobs to reach 1.6 million jobs in the tourism sector by 2030.
  • We target attracting 100 million local and international visits annually by 2030.

The Tourist Visa

  • The Kingdom launched the tourist visa in September 2019, where citizens of 49 countries can receive the visa electronically, while holders of US, UK and Schengen visas can receive the visa upon arrival, and subjects of other countries can apply to attain the visa through visiting representatives of the Kingdom in their countries.
  • The 49 countries amount for some 80 per cent of the tourist expenditure worldwide and host around 75 per cent of seekers of luxurious tourist trips in the world. 

The Tourist Investment Fud

What are the goals for establishing the Tourist Investment Fund?
- Establishing the Tourist Investment Fund aims at stimulating tourist investments in the Kingdom, diversifying income resources, increasing the contribution of the tourism sector in the GDP and creating more jobs for Saudi males and females in the tourism sector, as well as contributing to welcoming more tourists into the Kingdom according to goals of the national strategy for tourism and the Saudi Vision 2030.

What are the tools that the fund will use to finance and attract tourist investments?
- The Tourist Investment Fund has been established with a capital of 15 billion Saudi riyals. The fund has also signed memoranda of understanding with local banks to finance tourist projects with at least 150 billion Saudi riyals. The fund, in cooperation with investment banks, has founded funds to invest in various tourist sectors. 

What are the investment opportunities offered by the fund? 
- One of the most important goals of the fund is to support and encourage tourist investments in the Kingdom. In this sense, the fund opens cooperation aspects with investors directly through providing support to them in anything related to tourist projects that can lead to developing the tourism sector in various areas of the Kingdom, including various fields, such as: hotels, restaurants and developing the tourist destinations, hospitality in general and trip organisers. The fund also seeks to make the investment environment more attractive for the private sector and offering it support to receive more profitable schemes, which creates bigger investment opportunities in the Kingdom through renovating the tourist destination in a way that accords with the national strategy for tourism. Moreover, the funds enjoys a main role in developing the tourism industry in general and stimulating more Saudi males and females to get engaged in this sector with the aim of providing one million new jobs by 2030, in addition to increasing the contribution of the tourism sector in the Kingdom to 10 per cent by 2030 up from its current rate of 3 per cent, and planning to receive 100 million tourist visits. 

What are the finance solutions offered by the fund?
- The fund supports the private sectors through offering investment loans, as well as investing in projects through owning shares in these schemes. The fund also provides guarantees on some projects.
- Support is also offered in some cases for distinguished and pioneer projects through providing all the aforementioned solutions. The fund, in coordination with relevant government agencies, contributes to providing plots of land for some important and essential projects.