Saudi Arabia’s Tourism Development Fund signed an agreement with the country’s two major lenders Riyad Bank and Banque Saudi Fransi to finance tourism projects worth up to 160 billion Saudi riyals ($43bn) in the kingdom.
As part of the deal, the fund and the banks will set up a mechanism to support the financing of tourism projects in various regions of the kingdom, according to a statement on state news agency SPA on Monday.
The new initiative “is part of the fund’s efforts to encourage and stimulate investments in the tourism sector and support the private sector, including the small and medium enterprises”, SPA said.
Saudi Arabia set up the fund with an initial investment of $4bn in June this year to boost the tourism sector and develop 38 sites across seven destinations by 2022.
“The commitment of the fund to support and develop the tourism sector continues by stimulating investment and building a solid relationship with banks and financial institutions, which would create distinct investment opportunities in the kingdom,” Qusay bin Abdullah Al-Fakhri, chief executive of the Tourism Development Fund, said.
Tourism is a key pillar of Saudi Arabia’s Crown Prince Mohammed bin Salman’s ambitious reform strategy to reduce the economy’s dependence on oil.
The kingdom, which opened its doors to foreign tourists in September 2019 by launching a new visa scheme for 49 countries, wants the sector to contribute 10 per cent of gross domestic product by 2030, up from 3 per cent currently.
It is developing a number of projects including Qiddiya, a mega entertainment and sports project in Riyadh, and a Red Sea project, which includes a natural reserve, diving in coral reefs and heritage sites on about 50 islands.
However, the coronavirus outbreak led to a temporary halt in tourism. The kingdom closed its borders to foreign visitors from at least 25 countries in late February, followed by a complete ban on travel in and out of the country in March to contain the spread of the pandemic.
But as new cases reduce and movement restrictions ease worldwide, Saudi Arabia is planning to re-open to leisure visitors and issue visas by early 2021, the country’s tourism minister told Reuters earlier this week.
“For tourist visas, until now we are talking about early next year. If things get better or if any positive developments happen with regards to the vaccine, we might accelerate and have it earlier,” Ahmed Al Khateeb said.
The kingdom, which has eased movement restrictions locally, has also benefited from growing domestic tourism over the summer season, the minister said.
“This pandemic is a systematic risk that has hit everyone; however, we have seen a very strong summer after the January-May … period,” Mr Al Khateeb said.
“We have noticed a growth of 30 per cent year on year in domestic tourism which is beyond our expectations.”
A local campaign that promoted various tourism destinations to attract domestic tourists also helped in improving occupancy rates across Saudi Arabia’s hotels.
Source: The National, Pixabay