Saudi Arabia to develop 200km of Red Sea coast
▶ PIF-backed project will attract tourists, create 35,000 jobs and add Dh14.7bn to economy
Saudi Arabia’s sovereign wealth fund plans to transform a 200-kilometre stretch of Red Sea coastline into a luxury resort featuring hotels, residences and transport hubs.
The Public Investment Fund of Saudi Arabia (PIF) will provide initial investment to The Red Sea Project which will create 35,000 jobs and add 15 billion Saudi riyals (Dh14.7 bn) to the kingdom’s economy, according to a prospectus of the project.
The project is part of the kingdom’s comprehensive Vision 2030 economic development plan that seeks to reduce the reliance on oil and diversify the economy. The plan considers tourism as a key area to develop.
“The project will attract the world’s leading names in the tourism and hospitality sectors to harness its expertise, competencies and financial investments to enrich the experiences of this destination, provide more value to its visitors and maximise the economic gains of the kingdom,” according to the state-run Saudi Press Agency (Spa).
The development will stretch across more than 50 natural islands between the cities of Umluj and Al Wajh, just a few kilometres from one of the kingdom’s protected reserves and extinct volcanoes in Harrat Al Rahat area.
Foundations will be laid in the third quarter of 2019, with the first phase completed in the final quarter of 2022.
At this stage the development will include “…the airport, the port, the development of hotels and luxury residences, the completion of facilities and infrastructure, and transport services (boats, water jets, etc),” according to the agency.
While the PIF will fund the initial stages of the project, it then plans to partner with leading international companies.
This “… will bring new and direct investments while seeking to attract and redirect Saudi tourism expenses into the kingdom”, Spa said.
The project aims to attract tourists to historic and natural landmarks in the kingdom such as the ruins of Madain Saleh and a nature reserve where visitors can explore the area’s flora and fauna.
“Adventure enthusiasts will be able to navigate between the inactive volcanoes located next to the project area and dive enthusiasts explore the abundant coral reefs in the surrounding waters,” the agency said.
It also added that natural resources will be conserved in line with international standards.
Saudi Arabia’s tourism sector (luxury and domestic tourism) are both set to increase over the medium and long term, bolstered by the Vision 2030 investments, according to BMI Research.
“The government hopes to establish a strong luxury tourism sector to support dwindling hydrocarbon revenues,” BMI Research’s report said, adding that Saudi Arabia is likely to compete with the UAE for luxury tourism over the long term.
The research firm forecasts the country’s growth in tourism arrivals of 12.8 per cent in 2017 to reach a total of 22.6 million.
“Medium-term growth to 2021 will remain robust at over 15.6 per cent annually with an estimated 41.4 million tourists expected by 2021,” it added.
This will bring new and direct investments while attracting and redirecting Saudi tourism expenses into the kingdom