The World Bank and Saudi Arabia have formed the first-ever $100 million global fund solely dedicated to sustainable tourism. Here are some insights on the fund and how it might impact international tourism.
Travel and tourism worst hit by the pandemic
The travel and tourism sector was the worst hit after the pandemic struck. The restricted movement to curb the spread of the virus brought the industry to a grinding and painful halt, rendering millions of workers jobless and many companies bankrupt.
International travel within the country dropped by 74% due to the pandemic while global tourism GDP nearly halved in 2020. This translated to nearly $5.5 trillion in losses in the industry globally, according to Princess Haifa bint Mohammed Al-Saud, the assistant tourism minister for executive affairs and strategy.
Steps are now being taken to revive the industry and modify it to live around the virus. Major stakeholders and industry leaders are trying to navigate around this health crisis and bring the tourism industry back on its feet.
The journey to recovery
According to Ahmed Al-Khateeb, Saudi Arabia’s Minister of Tourism, this will be the first and the only global fund dedicated solely to sustainable international tourism growth, and a significant step towards a more inclusive, resilient, and sustainable future for the sector. It will also be an opportunity to create a more responsible approach to tourism that uplifts communities and drives economies while preserving the environment and respecting local cultures.
He said this during the Tourism Recovery Summit 2021 in Riyadh. He further states that the Kingdom of Saudi Arabia is acting on sustainability, inclusivity, and collaborations. These, he says, are the core principles that will be responsible for the recovery of the tourism industry globally.
The minister added that as a new destination, the priority is to protect the country’s rich nature and cultural heritage and to set new standards in sustainability. The Giga projects will combine nature-adventure and cultural attractions in a way that adheres to the highest environmental standards.
Speaking at the same summit, Zurab Pololikashvili, secretary-general of the UN World Tourism Organization (UNWTO) said it has opened a regional office in Riyadh, and it is “a sign of hope for many people.” He noted that Riyadh and the kingdom are among the few countries still investing in tourism in these pandemic days.
Travel is slowly being restored as the vaccine is being rolled out. Governments have started easing up on travel restrictions and setting up precautions such as pre and post-travel testing for tourists. All this is in an effort to contain the spread of the virus while keeping the tourism industry alive. Saudi Arabia, which is the world’s largest oil exporter, is one of the many countries opening up its borders to tourists.
A street-less and car-less city
Neom, a city located in the North of Saudi Arabia, is developing as the first-ever modern city with no streets, cars, and zero carbon emissions. It will solely rely on natural transportation modes. This is an effort by the Kingdom to create a global destination that is powered by clean energy. The project has been dubbed “The Red Sea Project.”
In addition, Neom is set to be a $500 billion modern city with a nature reserve, coral reefs, and heritage spots. It is planned to contain a huge entertainment and sports center named Qiddya, in the capital. Also, the Red Sea Development Project will feature islands off the city’s west coast.
Saudi Arabia opened up to international tourism in September 2019 and has since announced a number of projects to attract visitors. These include a $530 million fund to develop key destinations across the Kingdom. Riyadh aims to raise the contribution of its tourism sector to its GDP from 3 percent to 10 percent, in a bid to modernize its economy and steer it away from oil dependence.
Tree planting initiative
The country also aims to plant 10 billion trees, as a green initiative to protect more than 30% of the Kingdom’s land and enhance its natural resources. During Saudi Arabia’s G20 presidency, the country hosted the first-of-its-kind private sector tourism event in conjunction with major stakeholders of the sector. This was an effort to come up with policies and strategies that will dictate the future of tourism during the pandemic.
Princess Haifa reported that they have changed the language in Saudi Arabia, revealing that they had switched from “jobs in tourism” to “careers in tourism”. During the pandemic, 35,000 jobs were created in the Kingdom at a time when the world was losing jobs in tourism”. Saudi Arabia also saw a 33% increase in money spent in the industry because of focusing on domestic tourism.
The Princess further added that a total of $3.71 billion was spent during the summer of 2020 alone. Saudi Arabia exceeded expectations regarding domestic tourism, despite the United Nations World Tourism Organization, or UNTWO, describing 2020 as the worst year in the history of tourism.
The kingdom restarted international travel on May 17th. At the annual Arabian Travel Market, Fahd Hamidaddin, the CEO of the Saudi Tourism Authority said that this year could be a turning point for the Kingdom’s tourism industry. He said that the fourth quarter of this year is bound to be profitable to them as the countries they are targeting reach a 70% vaccination rate.
Recovery from the pandemic in sight
According to Euromonitor International, a market research firm, Saudi Arabia will have recovered from the impact of the pandemic by 2025. This is due to inbound tourism spending, predicted to reach $25.3 billion by 2025. This impressive prediction is a sure-fire way to increase tourism GDP worldwide and Saudi Arabia has offered to chip in to bail out the tourism industry from the heavy losses suffered in 2020.
Saudi Arabia has pledged to give $100 million to boost sustainable and inclusive tourism all around the globe. This unique project looks like an extension of the strides taken by the kingdom to boost local and international tourism within itself and outside.
Take advantage of this opportunity
If you plan to take advantage of this enormous potential created by the fund, you will need to work with professional and experienced lawyers who are extremely conversant with Saudi law and international occurrences. If you are looking for such lawyers, please contact HMCO today, and get the ball rolling.