00:00 [Music]
00:04 Saudi Arabia is on a massive building spree, creating private islands, luxury hotels,
00:09 theme parks, cruise ports, and even a desert ski resort.
00:13 The question remains, if they build it, who will come?
00:16 [Music]
00:24 Whatever your preconceived notion of Saudi Arabia as a travel destination is,
00:28 it's about to get a major renovation.
00:31 Imagine Sindala, a seven-star private island resort with three ultra-lux hotels,
00:36 38 high-end restaurants, and multiple superyacht marinas.
00:40 Or Qadiyah, a futuristic city of 600,000 people rising from the desert floor,
00:45 dedicated to eSports and gaming.
00:48 How about Trojana, a space-age ski resort built above the high desert?
00:53 Or the Red Sea, a vast waterscape of 50 luxury resorts and 8,000 hotel rooms
00:59 spread across 22 islands in a Maldives-style archipelago
01:02 powered entirely by wind and solar energy.
01:05 Also in the works is The Rig, a $5 billion adventure theme park
01:10 built on an offshore oil platform.
01:12 In addition, Saudi Arabia is positioning itself as a major cruise destination,
01:17 with Cruise Saudi having recently bought a $300 million ship.
01:21 Across the kingdom, new roads, airports, golf courses,
01:25 and cruise terminals are rising from the sand.
01:27 The map is literally being redrawn in real time.
01:30 Then there are all the new hotels, with their thousands of freshly built rooms.
01:36 The world's most iconic hospitality companies, Ritz-Carlton, Four Seasons,
01:42 St. Regis, Fairmont, Marriott, Hilton, Hyatt, and Intercontinental,
01:48 are falling over themselves to jump into a construction pipeline
01:52 that's churning faster than anywhere else in the world.
01:54 Any one of these projects might momentarily pierce the travel industry's
01:59 fleeting attention span, but together, what's going on in Saudi Arabia
02:04 simply cannot be ignored.
02:05 It can be difficult to visualize the vastness of Saudi Arabia's physical transformation.
02:10 Some of the most notable ongoing projects fall within NEOM,
02:15 a $500 billion built-from-scratch region in northwest Saudi Arabia
02:19 where the kingdom is creating new cities, resorts, and other developments.
02:22 At 10,200 square miles and bounded by the Red Sea to the south
02:28 and the Gulf of Aqaba to the west, it's roughly the size of Albania.
02:32 Bankrolled by the kingdom's $700 billion public investment fund,
02:36 the idea for NEOM was born out of Vision 2030,
02:40 Saudi Arabia's grand plan to shake off its historic reliance on oil
02:44 and diversify its economy.
02:46 One of the scheme's pillars involves reinventing the country
02:50 as a global tourism juggernaut.
02:51 When first announced in 2016, the kingdom's tourism goals seemed fanciful.
02:57 Attract 100 million foreign and domestic visitors to the country every year
03:01 and grow tourism's share of the economy from about 3% to 10%
03:05 and do it all in just 14 years.
03:08 Then in 2019, Saudi Arabia announced it would provide e-visas and visas on arrival
03:14 to visitors from 49 countries, including the United States.
03:17 Among other changes announced at the time,
03:20 female visitors would be exempted from wearing an abaya,
03:23 the traditional and otherwise obligatory head-to-toe robe in public places,
03:28 and would be allowed to travel without a male companion.
03:30 Since Saudi Arabia opened to the international travel market,
03:34 the speed and spare-no-expense approach to its transformation
03:38 has stunned even the most seasoned tourism analysts.
03:42 The World Travel and Tourism Council estimates the kingdom has already spent $800 billion,
03:46 and that doesn't include the massive amounts of foreign investments pouring in.
03:51 Saudi Arabia had over 24 million foreign arrivals in 2023
03:56 and will welcome nearly 37 million in 2030, according to Euromonitor projections.
04:01 A more meaningful measure of success is how much foreigners are expected to spend
04:07 while in Saudi Arabia.
04:09 Euromonitor predicts that international tourists will spend $38 billion in 2030.
04:15 But the total economic impact for Saudi Arabia will be far greater after adding
04:19 in domestic travelers' expenditures and the ripple effect of 1 million new tourism jobs.
04:25 The WTTC projects that by 2032,
04:28 Saudi Arabia's tourism sector could contribute nearly $169 billion to its GDP,
04:34 representing 17.1% of the total Saudi economy.
04:39 Preparing for the future also means recognizing the seismic shift in what
04:42 the next generations of global travelers will want.
04:45 Roughly 90% of young Chinese travelers and 70% of Gen Z travelers in the UK, Australia, and India
04:52 say they are looking to discover new destinations, according to data from Scyth Research.
04:57 In that sense, being the new kid on the tourism block is an enormous plus.
05:02 There are, of course, many ways for the Saudi Grand Vision to go sideways.
05:06 First, there are enormous financial risks inherent in tackling so many gigaprojects all at once,
05:12 even for a country with bottomless pockets.
05:14 The kingdom's debt-to-GDP ratio is nearly double what it was a decade ago,
05:20 though still quite low compared to other countries.
05:22 Another concern is hotel overcapacity.
05:26 Euromonitor International's latest forecast model predicts that the average traveler's
05:30 spend will have already dropped by 2030.
05:33 Too many hotel rooms that aren't being filled would drive prices down.
05:36 In addition, Saudi Arabia has a persistent PR problem among many would-be travelers,
05:42 especially those from the West.
05:44 The kingdom still has strict laws about drinking and severe restrictions for women,
05:49 not to mention allegations of human rights abuses and attacks against journalists.
05:53 In 2021, the US officially blamed Saudi Crown Prince Mohammed bin Salman
05:59 for the 2018 murder of Washington Post journalist Jamal Khashoggi.
06:03 But any concerns about human rights haven't stopped multinational corporations
06:07 from investing in the kingdom's Grand Vision.
06:09 The majority of luxury hotel brands have already shifted from China and the UAE into Saudi Arabia.
06:15 After all, the international travel market loves nothing more than a shiny new destination
06:20 in an emerging market, and right now the Middle East is having a moment.
06:30 [BLANK_AUDIO]
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