latest news U A E and and Saudi Arabia

The pace of plans for new hotel development in Saudi Arabia is astounding. From upscale beach destinations on the Red Sea, through eco-cities like NEOM, to historic cultural sites like AlUla and Diriyah Gate, leaving aside Hajj tourism in the Holy Cities, the scale of projects is massive and the ambitions to create a global tourism market from scratch are truly impressive. To put this into numbers, STR figures recently showed a 67 percent increase in hotel room stock planned, with over 73,000 new rooms in the pipeline. At present, there is excitement throughout the region at the prospect of these new openings, not least from hotel brands which are falling over each other to plant new flags and increase their fee streams after the Covid-induced downturn. Why Saudi's tourism goals are ambitious, but realistic However, occasionally one starts to hear a slight nagging doubt being voiced, quietly, in other GCC and nearby destinations – “what will this do to us?” Are other destinations, notably the UAE, Oman and Egypt, right to be concerned? Will the Saudi boom draw tourists away, or will it simply entrench the region as the right place to come for a vacation from Europe and Asia? While it is, of course, way too early to formulate a conclusive answer to that question, a few thoughts may be worth developing: Almost 20,000 of Makkah’s new rooms are close to the Kaaba. Competition is competition and however much the hotel sector wants to deny it, new rooms inevitably need to take customers from somewhere. Will there be guests who might have sat on a beach on the Palm Jumeirah or Saadiyat Island or Salalah who will instead opt for a Red Sea vacation in Saudi Arabia? Undoubtedly so. Similarly, Saudi forts and desert wildernesses will inevitably compete with those further east. There is bound to be a degree of displacement. That said, there will be offsetting factors which should soften the blow: The first is “induced demand”. In other words, guests who would not have made a trip to the region at all, but are lured by the new Saudi locations (or perhaps their brand’s points redemption programme) when they might otherwise have gone to the Mediterranean, Caribbean or South-East Asia. This could be a considerable element of the guest mix in new Saudi destinations. The second factor is that a significant part of the new Saudi room stock will be in Makkah and Medina – indeed, almost 20,000 of Makkah’s new rooms are close to the Kaaba. Visitors here are unlikely to have considered Dubai or Ras Al Khaimah as an alternative. Alcohol. As long as Saudi Arabia remains a dry destination, it will find it harder to attract large numbers of tourists. True, there are markets which find dry hotels appealing – not only devout Muslims, but also conferences which want their delegates sober and families who want a holiday well away from drunken European revellers. However, at the top end of the market, where much of the new Saudi supply will be focused, the latter is not much of an issue, and if a European, Russian or South-East Asian visitor is unable to imbibe a glass of alcohol at the end of a long day on the beach, that may put off many potential visitors. Two-centre holidays. Moreover, if the kingdom does stay dry, there is significant potential for both tourism authorities and hotel companies to promote two-centre holidays – for example, a cultural or ecology-based stay in Saudi Arabia followed by a stint in the UAE or Oman. That way, both destinations benefit. Inertia. It is an interesting feature of resort destinations around the world that, once established, they are usually quite resilient. Phuket and Bali in South East Asia, the Costa del Sol, the Balearics, the Greek Islands and the Côte d’Azur in Europe, remain the go-to places. Attempts to establish new locations as major tourism hubs often find it difficult to make inroads – witness Sihanoukville in Cambodia or Phu Quoc in Vietnam.So, although Saudi Arabia may gradually build up a substantial client base, it may be a long time before it fully challenges the existing resorts. What the new competition will undoubtedly mean is that each destination needs to develop its own DNA, which is unique and distinct from the others. To date, that is clearly visible in successful markets – Abu Dhabi with the Louvre and Guggenheim; Dubai with the bustling malls and beaches and now the Museum of the Future and the Expo; RAK with adventure tourism; Oman with its wadis, mountains and largely expat-free environment. Just creating a desert camp, a mountain view or a pristine beach will no longer suffice, especially in attracting repeat tourism. Even today, however, there is some degree of overlap and the region will need to work hard to develop new concepts, whether in the hotels themselves or in the planned tourism attractions. Just creating a desert camp, a mountain view or a pristine beach will no longer suffice, especially in attracting repeat tourism. Hotel brands proliferate but many are hard to distinguish one from the other for the ordinary visitor, hence the rapid move to new styles of boutique resorts whether tented camp, eco village or wellness retreat. Meanwhile, both the new Saudi destinations and the existing tourism hubs in the GCC will need to keep creating new attractions to stay ahead of the game. That challenge will be discussed in detail at the Gulf and Indian Ocean Hotel Investors’ Summit session called “Growing Kids on the Block” on November 16. The comforting factor to consider is that the region has proven, decade after decade, that it can do just that.