Saudi Round-Up: Aviation, Real Estate, and Tourism Driving Transformation
This week’s round-up features highlights from the Future Aviation Forum, held in Riyadh last week, Industry and Manufacturing, Real Estate, and Tourism.
From 21 - 27 May, 2024
General Business and Economy
Moody’s Affirms Kingdom’s A1 Credit Rating
Global credit rating agency Moody’s has given Saudi Arabia a positive outlook, affirming its A1 credit rating. The decision takes into account the contribution of reforms and investments in non-oil sectors, which are set to reduce Saudi Arabia’s reliance on hydrocarbons.
The agency considered the Kingdom’s robust economy, strong policymaking, and successful track record supporting its economic diversification.
Saudi Point-of-Sale Spending Reaches an Unprecedented $16 Billion
According to figures from the Saudi Central Bank, there has been an 8% annual increase in point-of-sale spending across sectors, driven largely by food and beverages. Flexible payment options have contributed to the $15.91 billion spent in March.
Personal care supplies, cleaning products, and clothing and footwear were also significant drivers of this growth. Ongoing digital transformation is reshaping both retail and consumer behavior.
Goldman Sachs to Set Up Riyadh Headquarters
The Goldman Sachs Group is poised to be the first Wall Street bank to set up regional headquarters in Riyadh. It will do so in addition to its existing offices in Doha, Riyadh, and Dubai.
The Kingdom has surpassed its initial target of attracting 160 HQs by the close of 2023, with more than 180 companies having established regional headquarters in the Kingdom.
Aviation: Focus on The Future Aviation Forum
Business Aviation Sector to Grow Almost 9% Per Year Until 2029
Economic stimulation, government investment, and incoming high-net-worth visitors are fueling the growth of the business aviation sector. Worth an estimated $1.2 billion in 2023, the sector is set to grow 8.88% per year between 2025 and 2029.
The General Authority of Civil Aviation’s roadmap, outlined at the Future Aviation Forum (FAF), aims for a tenfold increase ($2 billion) in contribution to GDP from general aviation by the end of the decade.
Also in attendance at FAF, Abdulaziz Al-Duailej, President of the Kingdom’s General Authority of Civil Aviation, showed strong support for Saudi aviation, while Salvatore Sciacchitano, president of the International Civil Aviation Organization, underscored Saudi’s global leadership in sustainable practices
Top-Level Discussions at the Future Aviation Forum
Saudi Arabia’s industry minister Bandar bin Ibrahim Alkhorayef discussed investments and technology with global aviation leaders at the Future Aviation Forum.
On the back of the Kingdom’s largest-ever aircraft deal with Airbus, Alkhorayef emphasized the importance of cooperation throughout the sector. He pointed to the significant opportunities in the Saudi aviation market as it aims to make Saudi Arabia a logistics hub, in line with Vision 2030.
Deals Worth $20 Billion Signed at the Future Aviation Forum
The $20 billion worth of deals signed at the Future Aviation Forum spanned 102 agreements including aircraft procurement, logistics services, and advanced air mobility.
The range of partnerships underscores international confidence in the Kingdom’s leading role in the aviation sector.
Industry and Manufacturing
Kingdom Issues 54 Industrial Licenses in March
Saudi Arabia’s issuance of 54 industrial licenses in March is consistent with figures for the previous year. According to a report from the Kingdom’s Ministry of Industry and Mineral Resources, permits were distributed across several sectors, including formed metal goods, chemicals, paper, and non-metallic mineral and food products.
This consistent growth reflects the Kingdom’s commitment to making mining a pillar of the Saudi economy in line with Vision 2030.
Real Estate
Saudi Proptech Investments Grow 35% to $9 Million
Venture data platform MAGNiTT noted an annual increase of 35% in property technology venture capital investments in the Kingdom in 2023, bringing the total to $9 million and outpacing neighbors, including Africa and the Middle East.
The Kingdom saw six proptech deals in 2023 with total funding reaching $157 million.
Tourism
Saudi Minister Emphasizes Kingdom’s Contribution to Global Tourism
On the sidelines of the 50th UN Tourism Regional Commission for the Middle East (from May 22 to 24 in Muscat), Saudi Tourism Minister Ahmed Al-Khateeb affirmed that the Kingdom’s ongoing tourism industry development is on track with the National Tourism Strategy. The strategy aims to attract 150 million visitors by 2030, increase the private sector’s contribution, and attract direct foreign investments.
Saudi tourism’s contribution to the local economy already increased from 3% to 4.5% by the close of 2023, as per Vision 2030. Al-Khateeb noted that Saudi tourism is changing the face of global tourism, as well as that of the local economy.
Kingdom Climbs Global Tourism Index
Saudi Arabia is now 41st on the World Economic Forum’s Travel & Tourism Development Index report, marking a rise of nine places. This is the most significant improvement in the region.
The report emphasized the regional advantages of high-quality infrastructure, major aviation hubs, and large corporations and business centers contributing to an attractive business ecosystem.
Saudi Summer Program 2024 to Boost Tourism
The Saudi Summer Program 2024 is set to grow tourism during the four months to the end of September across seven destinations, including Riyadh, Jeddah, AlUla, and the Red Sea.
Saudi Arabia’s Tourism Minister Ahmed Al-Khateeb noted the Kingdom’s rapid growth in the hospitality sector and the unprecedented numbers of visitors received—2023’s 106 million visitors marks an increase of 156% compared to 2019. The National Tourism Strategy aims to welcome 150 million visitors by 2030.
Kingdom to Reveal New Tourism Strategy
Chief Special Advisor at the Ministry of Tourism Gloria Guevara Manzo spoke of a new tourism strategy to be announced later this year. The plan will integrate AI and other technologies to grow tourism while ensuring the sustainable use of resources.
The current strategy achieved the goal of attracting 100 million tourists seven years ahead of schedule.
The Kingdom continues to bolster the rapidly diversifying economy and garner a positive reputation on the global stage. Bookmark us to join us for the next round-up of the Kingdom’s movers and shakers driving economic transformation and inspiring the world’s leaders toward positive change.
