[Interview] 'Tourism is the new oil’: Saudi Arabia's Journey to Economic Transformation

As Saudi Arabia, the world's largest oil exporter, looks to diversify its economy, a new beacon of opportunity emerges in the form of tourism. Aiming to reduce its dependence on oil, nurture domestic industries, and stimulate job growth, the kingdom is undergoing a rapid transformation. The impact is already visible, with international tourists injecting a staggering 27 billion riyals ($7.2 billion) into the economy during the first half of 2022, according to data from the Ministry of Investment. In a remarkable surge, the number of inbound tourists in the second quarter of 2022 soared by an impressive 575.4 percent, reaching 3.6 million visitors. Simultaneously, domestic tourism experienced a robust increase of 42.3 percent, captivating 21.4 million travelers. This influx of visitors translated into extraordinary spending figures, with inbound tourists' expenditure skyrocketing by 570 percent to 15.7 billion riyals. Domestic tourists also contributed significantly, with a 31.5 percent rise in spending, amounting to 22.7 billion riyals.?

Today, we have the honor of interviewing Mohanad Nada , the Managing Director at Saudi Trips DMC , a prominent figure in Saudi Arabia's travel and tourism industry. We will delve into the pivotal role that tourism plays in the nation's economic development, aligning with the visionary Vision 2030 plan. Furthermore, we will explore how Saudi Arabia's tourism industry measures up against its regional counterparts, the challenges it faces, and its long-term aspirations. Through this interview, we aim to provide our readers with a comprehensive understanding of Saudi Arabia's tourism industry and the exciting prospects that lie ahead.

What role do you see the tourism industry playing in the development of Saudi Arabia's economy in the coming years? as outlined in the Vision 2030 plan?

The tourism sector is poised to play a pivotal role in the economic advancement of Saudi Arabia in the upcoming years. Aligned with the objectives outlined in Vision 2030, the National Tourism Strategy of Saudi Arabia aims to attract 100 million tourists by the end of the current decade. Additionally, the strategy sets a target for the tourism industry to contribute 10% to the Kingdom's overall gross domestic product, as part of Saudi Arabia's broader efforts to diversify its economy away from oil dependency. Recognizing tourism as a vital sector for economic growth and diversification, the Saudi government has prioritized its development within the framework of Vision 2030. Some of the anticipated ways in which the tourism industry will foster the country's economic progress: Economic diversification, Historically, Saudi Arabia's economy has been heavily dependent on oil revenue. By developing the tourism industry, the government aims to diversify its economy, reducing its reliance on oil and creating new sources of income and employment. Foreign investment, Saudi Arabia has been actively seeking foreign investment. Major international companies and investors have shown interest in various tourism-related projects, including the Red Sea tourism project and other hospitality ventures. Foreign investment can contribute to infrastructure development, create employment opportunities, and transfer knowledge and expertise to the local workforce. Revenue generation, Tourism has the potential to generate significant revenue for Saudi Arabia. International visitors spend money on accommodation, transportation, dining, shopping, and various tourist activities, contributing to the local economy. Moreover, domestic tourism is also expected to grow, with Saudi residents exploring their own country's tourist destinations and contributing to local businesses. Cultural exchange and promotion, the development of the tourism industry allows Saudi Arabia to showcase its rich cultural heritage, historical sites, and natural beauty to the world. This can promote cultural exchange, foster a positive image of the country, and attract more visitors. In turn, increased tourism can lead to greater appreciation and preservation of Saudi Arabia's cultural and natural assets.

Saudi Arabia has recently unveiled some ambitious plans for its tourism industry. Can you tell us more about these plans, and what they might mean for travelers to the country?

Saudi Arabia launched a tourism development strategy known as Vision 2030, which aimed to diversify the country's economy and reduce its dependence on oil. As Saudi Arabia continues its tourism initiatives, the Kingdom advanced 10 positions to rank 33 in the latest travel and tourism development index. This comprehensive plan encompasses a range of initiatives and projects designed to attract both domestic and international tourists. 1) One prominent initiative is the NEOM Project, a visionary megacity with a projected investment of $500 billion. Spanning several islands along the Red Sea, NEOM will showcase a nature reserve, coral reefs, and heritage sites, setting the stage for a truly remarkable destination. During the WTTC Summit, Nadhmi Al-Nasr, CEO of NEOM, emphasized the geographical advantages that position the megacity to become a thriving global tourism hub. 2) Opening up to international tourists, Saudi Arabia has taken significant steps to ease visa restrictions for international visitors. In 2019, the country introduced a new electronic visa system, allowing visitors from eligible countries to apply for an e-visa and explore Saudi Arabia's tourist destinations. 3) The Saudi government announced plans to develop a tourism mega-project along the Red Sea coastline Project, called The Red Sea Project. This ambitious project aimed to create a luxury resort destination across a vast stretch of islands, beaches, and reefs. It was expected to offer various recreational activities, including diving, snorkeling, and other water sports. 4)Saudi Arabia sought to host international Business, Cultural and entertainment events to attract renowned entertainment acts and promote tourism. 5) The country planned to build entertainment venues and develop a thriving entertainment industry, including concerts, festivals, and sporting events. Significant investments were planned to enhance tourism infrastructure, including the construction of hotels, resorts, and transportation networks to facilitate travel within the country.?

How does Saudi Arabia's tourism industry compare to other countries in the region?

Saudi Arabia's tourism industry has been rapidly evolving and expanding in recent years, positioning the country as a competitive player in the region. While each country in the region has its unique attractions and strengths, Saudi Arabia offers distinct advantages and has made significant strides in developing its tourism sector. comparison of Saudi Arabia's tourism industry with other countries in the region, like the UAE, particularly Dubai and Abu Dhabi, have been leaders in tourism development in the region for many years. The UAE's tourism sector is well-established, known for its iconic landmarks like the Burj Khalifa, Palm Jumeirah, and luxury shopping experiences. Saudi Arabia is working to catch up and compete by investing in major tourism projects like The Red Sea Project and Al-Ula. Egypt is home to iconic attractions such as the Pyramids of Giza, Luxor's ancient sites, and the Nile River. Saudi Arabia's tourism industry is in its early stages compared to Egypt's well-established sector, but the development of Al-Ula and other historical sites can position Saudi Arabia as an alternative destination for history enthusiasts in the region. Oman is known for its stunning landscapes, cultural heritage, and historical sites like Muscat and Nizwa. Saudi Arabia's focus on developing historical and cultural sites, such as Al-Ula and Madain Saleh, positions it as a destination with unique offerings that can complement Oman's tourism industry. Jordan is renowned for its archaeological treasures, including the ancient city of Petra, the Dead Sea, and Wadi Rum's desert landscapes. Saudi Arabia's Al-Ula and Madain Saleh share similarities in terms of historical and archaeological significance, providing another compelling reason for tourists interested in the region's rich history. Bahrain is known for its rich cultural heritage, ancient burial mounds, and the Formula 1 Bahrain Grand Prix. Saudi Arabia's proximity and expanding tourism infrastructure may create opportunities for visitors to explore both countries during their trips to the region.

What role do you see technology playing in the future of the tourism industry in Saudi Arabia, and how is the country working to integrate technology into the traveler experience?

Technology is expected to play a significant role in the future of the tourism industry in Saudi Arabia. The country recognizes the importance of leveraging technology to enhance the traveler experience, improve efficiency, and provide innovative services. Here are some ways in which Saudi Arabia is working to integrate technology into the traveler experience: Smart tourism destinations, Saudi Arabia aims to develop smart tourism destinations that utilize advanced technologies. These destinations would feature smart infrastructure, including efficient transportation systems, smart buildings, and digital connectivity. Such integration of technology can enhance convenience, accessibility, and sustainability for visitors. Digital visas and e-services, Saudi Arabia has already introduced an electronic visa system to simplify the process for international visitors. This allows travelers to apply for and obtain visas online, streamlining the entry process. Additionally, the country is likely to continue developing e-services for visitors, such as online booking systems, digital guides, and information portals. Mobile apps and digital platforms, The Saudi government and private entities are investing in mobile apps and digital platforms to provide information, services, and personalized experiences to tourists. These platforms can offer features like interactive maps, virtual tours, language translation, cultural information, and real-time updates on attractions, events, and promotions. Artificial Intelligence (AI) and chatbots: AI-powered chatbots can be employed to assist travelers with queries, provide recommendations, and offer personalized itineraries. These chatbots can operate through websites, messaging platforms, or mobile apps, enabling quick and automated responses to visitor inquiries. Sustainable and smart tourism practices, Technology can support sustainable practices in the tourism industry. Saudi Arabia can implement smart energy management systems, waste management solutions, and monitoring systems to conserve resources and minimize environmental impact.

What challenges do you anticipate in the coming years as Saudi Arabia works to establish itself as a major player in the global tourism industry, and how is the government preparing to meet these challenges?

As Saudi Arabia works to establish itself as a major player in the global tourism industry, it is likely to face several challenges. Here are some anticipated challenges and how the government may be preparing to meet them: One of the challenges Saudi Arabia may face is the perception and image of the country among potential tourists. The government has been actively working to promote a positive image of the country through marketing campaigns, hosting international events, and highlighting its cultural heritage. By showcasing the country's unique attractions, historical sites, and commitment to tourism development, Saudi Arabia aims to reshape its image and attract visitors. Expanding and developing tourism infrastructure is crucial to accommodate growing numbers of tourists. Saudi Arabia has embarked on infrastructure development projects, including the construction of hotels, resorts, transportation networks, and entertainment venues. The government is also attracting foreign investment to support these projects and ensure the availability of world-class infrastructure. Meeting the demands of a growing tourism industry requires a skilled workforce. The government is investing in training programs, vocational education, and partnerships with international institutions to develop the necessary skills and expertise. By focusing on human resource development, Saudi Arabia aims to provide quality services and experiences for tourists. As the tourism industry expands, sustainability becomes a critical concern. Balancing tourism growth with environmental preservation and cultural conservation is essential. Saudi Arabia has expressed a commitment to sustainable tourism practices. The country aims to implement environmental regulations, promote eco-friendly initiatives, and ensure responsible tourism development. This includes initiatives such as smart energy management, waste reduction, and conservation efforts. Saudi Arabia has a unique cultural and social fabric that may differ from the expectations and norms of international visitors. Striking a balance between cultural preservation and visitor satisfaction requires careful planning and consideration. The government is taking steps to ensure cultural sensitivity in tourism offerings while adapting to the evolving needs and expectations of tourists. The global tourism industry is highly competitive, and Saudi Arabia will need to differentiate itself to attract visitors. The government is investing in the development of unique tourist destinations, such as The Red Sea Project and Al-Ula, to offer distinct experiences. Saudi Arabia is also strategically promoting itself as a destination for culture, heritage, and adventure tourism to stand out in the market.

the Saudi government has implemented its Vision 2030 plan, which outlines a comprehensive roadmap for tourism development and economic diversification. The plan involves collaboration with international partners, strategic marketing campaigns, investment attraction, and the development of supportive policies and regulations. Additionally, the government has established dedicated tourism entities, such as the Saudi Tourism Authority, to oversee and coordinate the development of the tourism industry. By focusing on these preparations, Saudi Arabia aims to overcome challenges, capitalize on its unique assets, and establish itself as a major player in the global tourism industry.

Can you speak to any recent innovations or developments in the Saudi Arabian tourism industry that you find particularly exciting or promising?

There were several recent innovations and developments in the Saudi Arabian tourism industry that were exciting and promising. However, please note that there may have been further advancements since then. a few notable examples like: The Red Sea Project: The Red Sea Project is a major tourism mega-project that aims to create a luxury resort destination along the Red Sea coastline. The project encompasses a vast area of islands, beaches, and reefs, and is being developed with a focus on sustainability and environmental conservation. The project aims to offer high-end accommodations, recreational activities, and immersive experiences in a pristine natural setting. Al-Ula and Madain Saleh: Al-Ula, located in northwestern Saudi Arabia, is an ancient region with significant historical and cultural sites. It is home to the well-preserved Nabatean city of Madain Saleh (Al-Hijr), a UNESCO World Heritage Site. The government has been investing in the preservation, restoration, and development of Al-Ula, aiming to transform it into a major tourist destination. The opening of Al-Ula to international visitors and the unveiling of its historical sites for exploration are exciting prospects for cultural tourism enthusiasts. Entertainment Sector Development: Saudi Arabia has been making strides in developing its entertainment industry to attract both domestic and international tourists. The country has hosted international music concerts, sporting events, and entertainment festivals, featuring renowned artists and performers. The government has been actively investing in the development of entertainment venues, such as theaters and event arenas, to provide diverse entertainment options for visitors. Technology Integration: Saudi Arabia recognizes the importance of technology in enhancing the traveler experience. The country has been investing in digital platforms, mobile apps, and online services to provide convenient and personalized experiences for tourists. The integration of technologies like augmented reality (AR), virtual reality (VR), and artificial intelligence (AI) can offer immersive experiences, virtual tours, and intelligent assistance to visitors. Eco-tourism and Adventure Tourism: Saudi Arabia's diverse landscapes, including mountains, deserts, and coastal areas, offer immense potential for eco-tourism and adventure tourism. The government has been promoting activities like hiking, rock climbing, desert camping, and wildlife exploration. The development of eco-lodges, adventure sports facilities, and nature reserves showcases the country's commitment to sustainable tourism and nature preservation.

What is the long-term vision for the Saudi Arabian tourism industry, and how is the industry working to ensure its sustainability and growth over the coming decades?

?The long-term vision for the Saudi Arabian tourism industry is outlined in the Saudi Vision 2030 plan. The plan envisions a vibrant and sustainable tourism sector that contributes to economic diversification, job creation, and the preservation of Saudi Arabia's cultural and natural heritage. Some key elements of the long-term vision and the efforts being made to ensure sustainability and growth:?Diversification and Economic Growth, The vision aims to diversify Saudi Arabia's economy by reducing its dependency on oil revenue. Tourism is seen as a key sector for economic growth and job creation. The government is investing in tourism infrastructure, promoting investment opportunities, and attracting international visitors to stimulate economic development. Destination Development, The plan focuses on developing unique tourist destinations within Saudi Arabia. Projects like The Red Sea Project, Qiddiya, and NEOM aim to create world-class leisure and entertainment destinations that offer diverse attractions and experiences. These destinations emphasize sustainability, cultural preservation, and environmental conservation to ensure long-term viability. Cultural Preservation, Saudi Arabia's rich cultural heritage is a significant asset for tourism. The vision emphasizes the preservation and promotion of cultural sites, archaeological treasures, and traditional practices. Efforts are being made to restore and open historical sites like Al-Ula and Madain Saleh to visitors while ensuring their protection and sustainable management. Environmental Sustainability, The Saudi government recognizes the importance of environmental sustainability in tourism development. It aims to implement sustainable practices, including energy-efficient infrastructure, waste management systems, and conservation efforts. Protecting natural landscapes, marine ecosystems, and wildlife habitats is a priority to maintain the attractiveness and ecological balance of tourism destinations. Skilled Workforce and Education, to ensure the industry's sustainability and growth, investments are being made in human resource development and education. Training programs, vocational initiatives, and partnerships with international institutions are being established to enhance the skills and knowledge of the tourism workforce. This ensures quality service delivery and the availability of competent professionals across various tourism-related sectors. Public-Private Partnerships, The Saudi government recognizes the importance of collaboration between the public and private sectors to drive tourism development. Partnerships with international companies and investors are being fostered to attract expertise, technology, and investments in the industry. Public-private collaborations help leverage resources, enhance competitiveness, and promote innovation. Marketing and Promotion, Effective marketing and promotion strategies are crucial for attracting domestic and international visitors. The Saudi Tourism Authority and other entities are actively promoting Saudi Arabia's tourism offerings through digital campaigns, participation in international events, and collaboration with travel industry stakeholders. The goal is to showcase the country's unique attractions, cultural heritage, and hospitality to a global audience. By implementing these measures, the Saudi Arabian tourism industry aims to achieve sustainable growth, position itself as a global tourism destination, and contribute to the country's economic diversification goals over the coming decades.

Mohanad Nada, Managing Director of Saudi Trip DMC

Mohanad Nada is Director of Saudi Trips DMC (part of almatar | ?????? Travel Group) and an Advisory Board Member at Headline Bulletin . He has over 17 years of experience leveraging startups with entrepreneurial DNA, B2C, B2B, corporate, digital business, transforming corporates and travel agencies digitally, sales planning, analytics, digital marketing strategy, brand management, and alliance-building talents to capture large-scale, multimillion-dollar global contracts in senior-level strategic roles in the online and offline travel industries. Recently, he graduated from Misk Entrepreneurship, and he was one of the founding team members at the first OTA in MENA, Flyin.com , and he was co-founder of FareFocus . He has led global teams at FareFocus , Cleartrip , Flyin.com, GTS Aramco, Altayyar Travel Group, and Travco Group.