The National Transformation Programme (NTP), a key component of Vision 2030, details support for a series of initiatives and programmes developed by the Saudi Commission for Tourism and National Heritage (SCTH) that aim to position the wider, non-religious tourism segment as a key generator of non-oil based growth. It hopes to achieve this by leveraging the Kingdom’s position as a major pilgrim destination, spreading the benefits of religious-based travel more equally throughout the Kingdom via the introduction of a Post-Umrah programme. In addition, several other SCTH initiatives are in line to receive NTP support as the Kingdom’s authorities set their sights on achieving the goals laid out in Vision 2030.
Religious pilgrimage to the holy cities of Makkah and Medina has long under-pinned the Kingdom’s tourism industry, with between 8.5m and 10m people performing the Hajj and Umrah pilgrimages each year. Government initiatives to accommodate even greater numbers have seen rapid hotel development in the two cities in recent years, while expansions to the Grand Mosque in Makkah are now complete, and an increase in pilgrim quota numbers for Muslim countries expected as a result. A target set by Vision 2030 for the sector is for the Kingdom to host 30m Umrah pilgrims by 2030.
While the lesser Umrah pilgrimage can be undertaken at any time of the year, the bulk of religious visitors come for the five-day Hajj pilgrimage. As such, seasonality presents a challenge, with the industry witnessing a significant spike during that period. To help spread the economic benefits of tourism more evenly throughout the year, and indeed throughout the country, authorities have been working to increase Umrah visits, while also exploring options that will allow the tourist industry to leverage the Kingdom’s wealth of natural attractions.
The number of people performing the Umrah pilgrimage has seen robust growth in recent years, boosting the number of annual religious visits from around 6m in 2005 to roughly 10m in 2014, according to consultancy McKinsey. The Umrah market holds enormous potential for the Kingdom’s tourism industry, and McKinsey analysis predicts that a combination of measures, including an easing of visa regulations and a global campaign aimed at the world’s 1.6bn Muslims, could see a five-fold increase in the number of Umrah visits by 2030.
The SCTH has been exploring various options to increase traffic. Between 2006 and 2010, for example, Saudi Arabia ran a pilot tourist visa programme, which welcomed 25,000 visitors to the Kingdom. More recently, authorities have focused on Umrah visitors, and in April 2016 the Post-Umrah programme was officially launched in Riyadh by Prince Sultan bin Salman bin Abdulaziz Al Saud, chairman and president of the SCTH. The programme, which falls under the commission’s “Saudi Arabia: Destination of all Muslims” initiative, seeks to spread the economic benefits of those who come to perform the Umrah more evenly throughout the year and around the Kingdom. According to Prince Sultan, the programme, which has been in the works for some time, aims to provide Umrah pilgrims with the opportunity to visit Saudi Arabia’s many heritage and cultural offerings, Islamic historical sites, and tourist destinations and resorts.
To facilitate this, the SCTH has been working in cooperation with partners in the public and private sectors, including the Ministry of Interior, Ministry of Foreign Affairs, Ministry of Hajj, airlines, national land transport and the professional tourism association.
The development of the Post-Umrah initiative will be carried out in three stages, according to the SCTH. The programme will initially target Umrah pilgrims from countries that are already approved for inbound tourism, such as other GCC countries. Following this, the SCTH will seek to encourage those performing the Umrah from all over the world to extend their stays in the Kingdom via the Post-Umrah visa. The third stage will target those visitors entering the country for non-religious purposes, such as business travellers attending exhibitions or conferences or those attending sporting events, giving them the chance to extend their stay without changing their visas.
“The Umrah visit is very flexible when compared with Hajj, and this makes it very compatible with tourism,” Salah K Al Bukhayyet, vice-president for the General Supervisor for Tourism and Investment, told OBG. “Thanks to the programme, people can tie their cultural or natural interests into the Umrah. Likewise, for people who have commercial interests in the Kingdom, these could also be tied in with the Post-Umrah programme.”
Speaking at the 40th meeting of the SCTH’s board of directors, Prince Sultan said that since its inception the SCTH “has made a transformative shift in the public work and created an appropriate environment for the integrated tourism industry that is capable of becoming a major tributary for the national economy and for creating jobs for citizens.” In July 2016 the SCTH announced that SR26bn ($6.9bn) will allocated to the tourism sector under the auspices of the NTP to underpin 13 specifically selected programmes and initiatives developed by the SCTH over the past decade as part of the agenda for the National Strategy for Tourism Development.
One of the 13 initiatives selected for NTP support is the Custodian of the Two Holy Mosques Programme for the Care of the Kingdom’s Cultural Heritage, which will be provided with the financial support to develop 17 handicraft centres, 18 heritage sites and 80 archaeological sites. Six archaeological sites will also be added to the four already listed as UNESCO world heritage sites in the Kingdom.
Additionally, three companies operating under the supervision of the SCTH are to be established. These organisations will be responsible for the operation and maintenance of heritage buildings, their registration, upkeep and rehabilitation, as well as the development of handicraft products.
Another major SCTH initiative set to benefit from NTP sponsorship is the development of specific tourism destinations. In 2014 the state approved the development of four destinations across the Kingdom – Fursan Islands, Souk Okaz City in Taif, A Ula and Al Raas beach in Al Rais, located in Medina Province. Each of these initiatives is built on the same development model: the government, via the SCTH, contributes land, infrastructure and distinctive locations while the private sector develops the necessary hospitality, residential, leisure and entertainment facilities. By supporting this initiative, the NTP is building on the SCTH’s goal of integrating the private sector into its schemes. The NTP has allocated SR861m ($229.5m) to the first phase of the Souk Okaz development. Meanwhile, private sector investment in the site is estimated to reach SR1.3bn ($346.6m), bringing the size of the expected investment in the first phase of the development to around SR2bn ($533.2m).
While the easing of travel restrictions for religious visitors and the introduction of the Post-Umrah visa will undoubtedly boost international stays in the Kingdom, there is also potential to increase the number of Saudis holidaying at home. Indeed, another SCTH initiative set to receive NTP backing aims to enhance performance along these lines. The Live Saudi Arabia Programme is carried out by the SCTH in collaboration with the Saudi Sports Commission and the Ministry of Education and organises trips for the Kingdom’s youth to sites of historical and cultural interest across the country. The programme hopes to emphasise the domestic alternatives that exist to the types of attractions Saudis often seek out abroad. Since its launch in 2014 the programme has put together over 400 trips, with some 16,000 students having benefitted as a result.
According to the World Tourism Organisation, 5m Saudi tourists travel abroad each year for a total of approximately 30m nights, with spending on international tourism-related activities reaching SR60bn ($16bn) a year. The most appealing destinations for these travellers during the mid-year school break include Dubai, Turkey and Sharm El Sheikh in Egypt.
The development of resorts along the Kingdom’s Red Sea coast could capture a share of the Sharm El Sheikh-bound traffic by offering similarly high-quality facilities closer to home. Family tourism is another promising segment; in July 2015 KidzMondo signed a franchise agreement with Abdul Rahman Saad Al Rashid and Sons to build seven “edutainment” theme parks across the Kingdom by 2025. The development will cost $133m, with the first branch expected to open in Riyadh in 2017. Deals have also recently been signed with US company Six Flags to create a number of theme parks across the Kingdom. Tapping into this market, Vision 2030 has outlined plans to build cultural and entertainment projects in a bid to double household spending in these areas to 6% by 2030.