Saudi Round-Up: Tourism and E-Commerce at the Vanguard of Economic Excellence
Our Saudi Round-Up selects and summarizes the top business news across the Kingdom so you can be up-to-date with the latest industry developments. This week’s round-up is dominated by the tourism sector, with its flagship projects demonstrating the Kingdom’s leadership and commitment to delivering economic diversification and achieving the country’s sustainability objectives.
From the 5th of February to the 12 of February, 2024
General Business and Economy
Saudi Economy Minister Becomes Chairman of National Infrastructure Fund
Faisal Al-Ibrahim, Saudi Minister of Economy and Planning, has been appointed as chairman of the National Infrastructure Fund.
The fund, also known as INFRA, plays a pivotal role in achieving Vision 2030 objectives, not least of all increasing the private sector’s contribution to GDP to 65%, meeting the Kingdom’s sustainability goals, and enhancing the country’s ability to attract foreign investment and expertise.
Private Sector Forum: Saudi Private Sector to Drive Economic Growth and Diversification
Over 8000 people attended the Public Investment Fund’s Private Sector Forum in Riyadh, where ministers, CEOS, senior officials, and key decision-makers across the public and private sectors gathered to discuss strategic funding issues related to the Kingdom’s development and diversification.
The fund has emphasized localization, increasing spending on local content significantly since 2021 to bolster supply chains, create opportunities, and strengthen the economy. Increased collaboration between the public and private sectors has also helped the fund create an enhanced business environment, driving the Kingdom’s Vision 2030 plan and moving Saudi toward achieving a 65% contribution to GDP from the private sector.
PIF’s TASARU to Propel Saudi Mobility Sector
PIF-backed TASARU Mobility will launch automated vehicles in the Kingdom to improve the efficiency of the Saudi mobility sector. It aims to localize essential suppliers and develop the ecosystem.
CEO Michael Mueller expressed that robo-taxi technology is integral to Vision 2030. The firm aims to roll out a world-leading, integrated autonomous vehicle system to giga and mega cities, which is expected to create jobs, reduce carbon emissions, and enhance economic diversification.
Technology
Saudi Boosts Digital Economy Via Nvidia Partnership
Abdullah Al-Swaha, the Kingdom’s Minister of Communications and Information Technology, met with Nvidia CEO Jenson Huang to discuss the development and strengthening of the Saudi digital economy, regarded as the largest market for technical innovation in MENA.
During their meeting, they also discussed AI’s potential to support digital innovation and lead to societal and economic benefits. This follows Al-Swaha’s emphasis on the Kingdom’s leadership in AI, with the establishment of the region’s GenAI Accelerator and the deep technology business incubator The Garage last month.
Saudi POS and E-Commerce Payments Reach $206bn in 2023
According to the Kingdom’s Central bank, SAMA, the total value of point-of-sale transactions and e-commerce sales reached $206 billion in 2023, which equates to an annual growth of 13%.
These figures emphasize the importance of the digital economy and the growing role that innovative technology will play in transforming consumer transactions across the Kingdom.
Saudi E-Commerce to Expand by 13.5% Per Year Through 2027
A recent study from Agility Logistics revealed that Saudi e-commerce generated $10 billion in revenue in 2023 and that the Kingdom is poised to establish itself as the regional e-commerce leader through its advances in investment, logistics capacity, and shipping volumes, as well as regulatory reforms to simplify domestic deliveries.
The report emphasizes an expected annual growth in e-commerce revenue of 13.5% through 2027, which is faster than the global average growth of 11.2%. It added that approximately 80 major projects are expected to be developed in the Kingdom by 2030 and that most of them focus on logistics development and are funded by the Saudi PIF.
Tourism
Red Sea Global Seals $522m Deal for Luxury Four Seasons Hotel
One of the world’s most ambitious developers, Red Sea Global (RSG) has finalized a deal with Riyad Bank to further develop the Four Seasons Hotel project on Shura Island. The luxury property is expected to open in early 2025.
John Pagano, RSG CEO emphasized that tourism in the Kingdom is without limits and that RSG is at the forefront of putting Saudi on the global stage.
Shura Islands is expected to feature 50 resorts, as many as 8000 hotel rooms, and 1000 residential units across 22 islands and six inland sites.
AlUla’s Revolutionary, Sustainable Tramway Drives Green Initiative
The AlUla tramway is a sustainable transportation system that aligns with the Kingdom’s objectives to diversify its economy while meeting sustainability, carbon emission reduction, and renewable energy objectives.
The tramway spans 22.4km and has 17 stations, making it the longest battery-powered catenary-free tramway in the world. The tramway’s interior and exterior designs demonstrate the Kingdom’s vision for a futuristic, sustainable transport solution for a global business hub.
NEOM reveals Xaynor: Exclusive Beach Club
NEOM has announced Xaynor, a new members-only beach club on the Gulf of Aqaba, which seamlessly combines the natural landscape and innovative architectural design and interiors.
This new sustainable tourism destination follows the revelation of Zardun, a sanctuary resort that aims to boost luxury tourism in the Kingdom, also situated on the Gulf of Aqaba, and several recent flagship destination announcements, including Epicon, Siranna, and Utamo.
Diriyah Signs More Than $700m in Deals at PIF Forum
Diriyah Co. has signed two deals with the aim of breaking ground on 11 new assets by the end of the year, including the King Salman Boulevard, envisioned to be similar to Paris’ Champs-Elysees, a contemporary art museum, and the new King Salman Mosque.
The first deal, valued at $186 million, is regarding the development of the Ritz Carlton residences. The second deal, worth about $533 million, concerns infrastructural development with Al-Ayuni Investment and Contracting Co.
CEO of the Diriyah Gate Development Authority, Jerry Inzerillo, affirmed the importance of the private sector in completing projects like Diriyah and emphasized the substantial opportunities available through such projects around the Kingdom.
PIF signs $79.9m in Hospitality Deals
Several Saudi hotels and design and engineering firms have agreed $79.9 million in deals to bolster partnerships with PIF-backed companies and the private sector to grow the Kingdom’s local economy.
Through the establishment of restaurants, cafes, and hotel brand design, the deals should boost the attractiveness of Madinah as a tourist destination, highlighting its modern architecture, quality of life, and rich cultural experiences.
Saudi Poised to Reach 250k New Hotel Rooms by 2030
According to Minister of Tourism, Ahmed Al-Khateeb, the Kingdom plans to add 250,000 hotel rooms to the current figure of 280,000 by 2030. The private sector has signed contracts to construct 75,000 of these, which will help tourism reach a 10% contribution to GDP and 150 million tourists by the end of the decade.
Saudi continues to forge ahead towards its objectives for the end of the decade, positioning itself as a leader across sectors on the world stage, especially regarding its groundbreaking giga projects and iconic entertainment venues across the hospitality sector. Join us next week for another round-up of business news to stay up-to-date with Saudi’s geographic, economic, and cultural transformation.
