Saudi travel, tourism sector shuns regional hiccups; keeps growing JEDDAH – Despite fears of political unrest across the Middle East region, travel and tourism continued to grow in the Kingdom of Saudi Arabia benefiting from the stable and growing economy during the past years, Euromonitor International said in a report "Travel and Tourism in Saudi Arabia". The Kingdom posted real GDP growth of 3 percent in 2011. Equally, travel and tourism saw hefty investments in 2011 from the public and private sectors in the attempt to promote the Kingdom's tourism industry and divert the economy's dependence on oil. In another report, Business Monitor International said in the "Saudi Arabia Tourism Report Q2 2012" study that the Kingdom's tourism industry is unique in that despite the limitations of entrance visa regulations, the industry has strong growth potential. BMI holds to their growth forecast for the Kingdom. Tourist arrivals are forecast to increase by 8 percent year-on-year (y-o-y) to 14.87mn in 2012. It forecast the number of tourist arrivals to grow by an average of 6 percent y-o-y through to the end of the forecast period in 2016. One of the main drivers for the tourism industry is religious tourism. Business travel is also a growing area, given Saudi Arabia's status as the world's largest oil exporter and moves to diversify the economy. The hospitality sector looks set to grow in tandem with tourist arrivals. BMI forecast that there will be about 424,000 hotel rooms in Saudi Arabia by 2016, up from a projected 317,000 in 2012. In 2009, a number of international chains opened their first hotels in the market, including Rotana, Hyatt Hotels & Resorts, Accor and Raffles Hotels & Resorts. Those already present in the market are expanding, with InterContinental Hotels Group (IHG), al-Hokair Group, Starwood Hotels & Resorts, Rezidor Hotel Group and Wyndham Hotel Group opening new hotels in 2010 and 2011. The Saudi authorities have said they want to diversify away from dependence on oil, with the tourism industry one of the focal points. Government expenditure has focused on developing the religious tourism and business travel sectors in particular, and for this reason we forecast an increase in collective government expenditure (expenditure that cannot be assigned to a particular group of tourists) and individual government expenditure (which refers to investment in services with an identifiable individual customer) over the forecast period. The government is also keen to develop its domestic tourism market in an effort to capture some of the capital spent by the millions of Saudi citizens that travel abroad each year. Saudi tourists mainly travel to other countries in the Middle East. International tourism expenditure is also forecast to increase, reaching $10.8 billion by the end of the forecast period. Saudi Arabia has been boosting its international presence and tourism marketing. In January 2011, the Saudi Commission for Tourism and Antiquities (SCTA) set up pages and accounts on tourism in the country on a number of social networking sites, including Facebook, Twitter and YouTube. In 2010, the tourism board hosted 18 festivals targeting all age groups. The festivals were held throughout the country and included sports events, entertainment and Saudi culture and heritage. Four new provincial museums, in Baha, Tabuk, Hail and Dammam, are scheduled to be open by the end of 2012, while the tourism authorities have also licensed 40 private museums to be established using the new technology to showcase Saudi Arabia's heritage and antiquities. – SG
