Massive investments in tourism are ‘bearing fruit’
Kingdom’s aviation industry will have annual value of $100 billion by 2032, says World Travel and Tourism Council CEO
Saudi Arabia’s aviation industry is expected to experience significant growth and be worth $100 billion to the Saudi economy by 2032 as the Kingdom continues to increase its investments in tourism, an industry expert said on Wednesday.
Julia Simpson, president and CEO of the World Travel and Tourism Council, told Arab News that aviation in Saudi Arabia was valued at $77 billion in 2019, but is expected to reach $100 billion within 10 years.
“All the investment that the Saudi government is making in developing what is a really beautiful country and opening up for travel and tourism is bearing fruit,” Simpson said on the sidelines of the Future Investment Initiative in Riyadh.
The massive investment by Saudi authorities in mega projects, including AlUla and the $500 billion NEOM smart city, will help to position the Kingdom as a major travel and tourism destination, she added.
The Kingdom’s efforts are raising the profile of the “immense amounts of cultural heritage in locations like AlUla” and “places in Saudi Arabia that are rich with history and biodiversity,” Simpson said.
The global aviation forecast looks similarly positive, as rapid growth in travel is expected in the coming decade.
“While global (gross domestic product) is looking to rise at 2.7 percent annually, travel and tourism will be growing at double that rate,” said Simpson, noting that the aviation industry returned to normal this year following the pandemic slump.
The travel industry, which was worth $9.6 trillion before the COVID-19 pandemic, was devastated by the global health crisis. By next year, however, it is expected to rise in value to $10 trillion, Simpson said.
“In 2023, we are already seeing numbers that will exceed 2020,” she added.
Business travel, however, is expected to recover at a slower rate.
“It has already started coming back but if you look at places like China that are still closed, and Japan, that has only recently opened, we will see that business travel will come back fully more likely in 2024,” said Simpson.
She also questioned the accuracy of reports of an expected global downturn in the aviation industry.
“Currently, we aren’t seeing (a decline) in any of the travel and tourism numbers,” she said. “In fact, at the moment, the demand is outstripping supply, and also we have very high employment levels. Sometimes they are so high that we find it hard to recruit people.”
She highlighted the emergence of new post-pandemic travel trends that have been propelling the hospitality sector toward growth and adjustment to new models.
“We are seeing digital nomads, where people are combining home, work and traveling at the same time,” Simpson said.
“So, you are seeing the classical division between holiday and workplace blurring slightly. That’s a whole new model and a lot of hotels are adjusting to meet that new challenge.”
The three-day FII gathers more than 6,000 participants — including policymakers, investors, entrepreneurs and young leaders — to discuss a wide range of topics, from geoeconomics to gaming.
We are seeing digital nomads, people who combine home, work and travel.
Julia Simpson CEO, World Travel and Tourism Council