The Saudi government is investing heavily in its tourism sector, principally to provide employment opportunities for Saudi graduates. According to a 2013 MENA tourism and hospitality report by research consultancy aranca, investment in the travel and tourism sector is expected to increase at a CAGR (Compound Annual Growth Rate) of 4% to SR30.9bn over a ten year period from 2013 to 23.
“The travel and tourism sector’s direct contribution to Saudi Arabian GDP is projected to increase at a CAGR of 4% to SR83.7bn by 2023. Put that into perspective it is equivalent to about 9% of current Saudi GDP, which is a great achievement, as the Kingdom looks to diversify its economy away from hydrocarbon receipts,” said Mark Walsh, Portfolio Director, Reed Travel Exhibitions.
The number of tourists visiting KSA is estimated to increase at a CAGR of 2% to 21.3 million over the period 2013 – 2023. Revenues will total SR60.9bn by 2023 – due to an increase in the number of Hajj and Umrah tourists and growth of international shopping centres.To cope with the increasing number of visitors, the Saudi government has outlined a plan to invest more than $30bn in its airports by 2020, including $10bn in private investment for the sector. More than $12.5bn has already been earmarked for the country’s four main international airports in Jeddah, Riyadh, Dammam and Madinah.
“These four airports handle 91.5% of total air travel throughout the country, including 72.5% of domestic travel. Spending from leisure tourists is expected to rise at a CAGR of 4.4% to SR79bn by 2023,” added Walsh.