Saudi Arabia Tourism Report Q4 2009

Saudi Arabia Tourism Report Q4 2009

Saudi Arabia’s tourism industry is unique in that despite the limitations of strict entrance visa regulations,
the industry has strong growth potential. BMI forecasts tourist arrivals to the Kingdom to remain constant
in 2009, at just over 12mn, and to grow by an average of 6.5% year-on-year (y-o-y) to the end of our
forecast period in 2013. One of the main drivers for the tourism industry is religious tourism. Saudi
Arabia is home to two of Islam’s holiest cities, Mecca and Medina, and every year millions of Muslims
come to Mecca for hajj, the largest annual pilgrimage in the world. In 2009, we expect concern about the
spread of the H1N1 virus (swine flu) to cause a slight decline in pilgrimage numbers. Business travel is
also a growing area, given the country’s position as the world’s largest oil exporter, not to mention its
other large industries such as defence.
The hospitality sector looks set to grow in tandem with tourist arrivals. BMI forecasts that there will be
321,000 hotel rooms in Saudi Arabia by the end of our forecast period in 2013, up from an estimated
230,000 in 2008. In 2009 alone, a plethora of international chains have opened up their first hotel in the
market, including Rotana, Hyatt Hotels & Resorts, Accor Group and Raffles Hotels & Resorts; while
those already present in the market are expanding. These include InterContinental Hotels Group (IHG),
Al Hokair Group, Starwood Hotels & Resorts and Rezidor Group.
Saudi authorities have said they want to diversify away from their dependence on oil, and the tourism
industry has been a focal point. Government expenditure has focused on developing the religious tourism
and business travel sectors in particular, which accounts for the decline in collective government
expenditure (expenditure that cannot be assigned to a particular group of tourists) and the increase in
individual government expenditure, which refers to investment in services with an identifiable individual
customer.
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
elsewhere the Middle East. Despite efforts to keep more Saudis at home, we see the number of citizens
travelling abroad increasing from an estimated 6.30mn in 2008 to a forecast 8.53mn in 2013. International
tourism expenditure is also forecast to increase, reaching US$10.74mn by the end of our forecast period.

Executive Summary ....5
SWOT Analysis............6
Saudi Arabia Tourism SWOT.......... 6
Saudi Arabia Political SWOT.......... 6
Saudi Arabia Economic SWOT....... 7
Saudi Arabia Business Environment SWOT....... 7
Industry Forecast ........8
Arrivals ........... 8
Table: Arrivals Data, 2005-2013 (‘000) 8
Accommodation. 10
Table: Accommodation Data, 2005-2013 (‘000, unless otherwise stated) ........ 10
Expenditure... 10
Table: Expenditure Date, 2005-2013 .. 11
Inbound Tourism ............. 11
Table: Arrival Of Tourists At National Borders By Region, 2005-2013 (‘000) 12
Table: Arrival Of Tourists At National Borders By Country, 2005-2013 (‘000).... 12
Outbound Tourism........... 13
Table: Outbound Tourism Data, 2005-2013 ..... 13
Table: Resident Departures By Destination Country, 2005-2013 (‘000)........... 14
Market Overview – Travel .............15
Global Oil Products Market Review... 16
Table Global Oil Prices, 2003-2013 (US$ per barrel) ..... 20
Market Overview – Hospitality .....21
Regional Case Study: Accor .......... 22
Table: Accor Hotel Business In Selected Middle East And Africa Countries, June 2009 .... 22
Business Environment ..24
BMI’s Security Ratings.... 24
Table: Middle East And Africa Defence And Security Ratings .......... 24
Table: Middle East And North Africa State Terrorism Vulnerability Index...... 25
Middle East And North Africa Security Overview ......... 25
Global Assumptions .30
Table: BMI’s Global Assumptions, 2007-2013 30
Table: Global And Regional Real GDP Growth, 2008-2011 31
Table: Developed Market Exchange Rates, 2008-2011 (average)...... 32
Table: Key Emerging Market Exchange Rates, 2008-2011 (average against US$) 32
Company Profiles......33
Saudi Arabian Airlines..... 33
Nas Air ......... 33
The Elaf Group .. 33
Methodology 34
How We Generate Our Industry Forecasts........ 34
Tourism Industry ............. 34
Tourism Ratings – Methodology ... 35
Table: Tourism Business Environment Indicators .......... 36
Table: Weighting of Components .. 37
Sources ......... 37