Saudis envision future beyond oil with 50-island Red Sea tourism plan

Saudi Arabia wants to turn hundreds of miles of its Red Sea coastline into a global tourism destination governed by laws “on par with international standards” as part of its plan to transform the economy and reduce its reliance on oil.

The project will cover 50 islands and 16,600 square miles — an area bigger than Belgium — between the cities of Umluj and Al Wajh to attract “luxury travelers from around the globe,” according to an official statement sent to Bloomberg last week. It will be developed by the kingdom’s sovereign wealth fund, with the first work expected in two years.

Bringing sun-seekers to Saudi beaches could transform a tourism industry that relies almost solely on Muslim pilgrims visiting holy shrines in Mecca and Medina. But while the announcement emphasized the economic benefits, past mega-projects to diversify the economy have struggled to get off the ground, and questions are likely to be raised over how acceptable the plan is to the kingdom’s influential religious establishment.

“If you can’t change restrictions on alcohol and dress, that market disappears,” said Crispin Hawes, London-based managing director at Teneo Intelligence, referring to foreign tourists.

Tourists will either not require a visa or will be able to obtain one online. One of the documents referred to the project as a “semiautonomous” area governed “by independent laws and a regulatory framework developed and managed by a private committee,” a sign that it could ease strict rules applied elsewhere in Saudi Arabia. The kingdom’s austere interpretation of Sunni Islam bans alcohol, imposes a dress code, limits gender mixing and prevents women from driving cars.

The proposal is part of Crown Prince Mohammed bin Salman’s blueprint to prepare the biggest Arab economy for the post-oil era. Authorities are already relaxing rules on entertainment, and by 2030, they aim to double household spending on recreation to 6 percent. Concerts, dance shows and even film screenings have drawn thousands of people over the past year.

The idea of creating separate areas for foreigners with looser rules also isn’t entirely new to Saudi Arabia. The most famous, the Saudi Aramco compound in Dhahran, is designed like an American suburb. On the gender-mixed campus of King Abdullah University of Science and Technology, attended by Saudis, women can drive and wear what they want.

And while alcohol is illegal, with authorities often busting homemade distilleries and distributors, it’s quietly consumed in many private homes and compounds dominated by wealthy expatriates.

Saeed Al Wahhabi, a Saudi political commentator based in Abu Dhabi, said the long lead time between the date of the announcement and the initial groundbreaking could be designed to test how the public reacts to the plan.

“We are waiting for social change within the upcoming two years before we start the project. Let the people talk about it, discuss it,” he said by phone.

Concerns about Western influences seeping into Saudi society might be assuaged by the promise to develop a rural area far from major cities. The project will create as many as 35,000 jobs “once it’s up and running” and contribute $4 billion to Saudi Arabia’s gross domestic product, according to the statement.

The Public Investment Fund, headed by Prince Mohammed, will inject initial investments into the project and start partnerships with international companies.

The initial groundbreaking is expected in the third quarter of 2019. The first phase will be completed by the fourth quarter of 2022, including “the development of hotels and luxury residential units, as well as all logistical infrastructure — including

air, land, and sea transport hubs,” according to the statement.

Visitors will have access to the ancient ruins at Mada’in Saleh, a relic of the same ancient civilization that built the better-known city of Petra in Jordan and a UNESCO world heritage site. A promotional video for the project with dramatic music showcases white sand beaches and flocks of

birds soaring over turquoise waves.

“It’s unique,” Al Wahhabi said. “He picked the most pure area in the country,” he added, referring to the crown prince. “It’s kind of far away from everything.”