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Ready to explore ‘Saudi Arabia this week’ by Analytix, with the latest weekly news updates and business insights from Saudi Arabia. Here we go!
From 8th November to 14th November 2024
Saudi Arabia climbs to 12th place from 15 positions in tourist spending: UN Tourism
RIYADH: Saudi Arabia jumps from 15 positions to rank 12th in tourist spending in 2023, making it a huge achievement for the country in global tourism, according to a report by UN Tourism. This is impressive as it is the largest leap among the top 50 countries. The report stated that among the G20 nations, Saudi Arabia was at the top at attracting international tourists with a rise of 73% and tourism revenue increasing up to 207% from January to July 2024 as compared to the same period in 2019.
These achievements indicate that the kingdom is one of the top tourism destinations, reflecting increasing confidence in its various attractions. Deputy Minister of Destination Enablement, Mahmoud Abdulhadi, announced that the Ministry of Tourism has raised its visitor target from 100 million to 150 million for 2030 and the numbers could go up further if the goals are achieved early. During the Future Hospitality Summit in Riyadh, he stressed ongoing assessments of sector performance.
The UN World Tourism Organisation (UNWTO) complimented Saudi Arabia’s tourism as a ‘significant milestone,’ as tourism related spending reached more than $ 37 billion in 2023. The amount of hotel capacity also increased considerably, supporting 27.4 million visitors in 203, up by 56% in 2019. The boom resulted in a record tourism surplus of SR 48 billion ($ 12.8 billion) in 2023, a 38% increase year-on-year.
The International Monetary Fund (IMF) recognised tourism can play a key role in diversifying Saudi Arabia’s economy under Vision 2030, contributing to the country’s service sector, creating jobs and contribution to GDP. Globally, tourism is coming back to its pre-pandemic form, with Middle East getting higher growth at 26% above 2019 levels, positioning Saudi Arabia as a prime tourist spot.
Saudi Arabia’s PMI reached six-month peak as non-oil growth surges in October
RIYADH: In October, Saudi Arabia saw the fastest business growth in the non-oil sector in six months as a result of increased sales. The surge in sales led expansions in business activity, employment, purchasing and inventory, reflecting continuous strong demand and economic momentum.
The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI), a measure of the performance of non-oil sector, grew from 56.9 to 56.3 with a continuous three-month upward trend. The PM counts in five factors: New Orders, Output, Employment, Suppliers’ Delivery Time, and Stocks of Purchases. Reading of above 50 implies expansion and October’s reading reflected a booming sector.
Riyad Bank’s Chief Economist Naif Al-Ghaith reported more than 40% of surveyed companies reported increased demand. Strong interest from domestic clients, innovative marketing and ongoing infrastructure investments all led to the demand surge. As the non-oil sector is expanding, the sector is predicted to contribute over 52% to Saudi Arabia’s GDP.
In October, costs surged with noticeable increases in materials and wage costs. Total input prices shot up at the sharpest rate since the beginning of the year and this was particularly driven by the Salary inflation. This price hike will present potential future challenges for companies in managing their costs while ongoing sector growth.
Saudi bank loans grow at fastest pace in 19 months, exceeding & 761 billion
RIYADH: Saudi Arabia’s bank loans grew by 12.16% annually to SR 2.85 trillion ($ 760.84 billion) by September, the highest in 19 months. The rise was led by corporate lending, accounting for 53.5% of total loans and went up by 15.75% with individual loans rising by 8.3%. This indicates a strong demand for business financing, especially in the field of real estate, made up 20.37% of corporate loans, up by 28.63% to SR 310.83 billion.
Real Estate, wholesale and retail trade sectors constituted 13.07% of corporate loans with manufacturing holding 11.78%. Electricity, gas, and water supply sectors saw a strong growth of 29.35%. Professional and technical services, even though they hold a small portion of 0.63%, showing the highest growth at 79.6%.
Saudi banks’ loans-to-deposits ratio slightly fell to 79.66% from 79.71% the previous year, within the regulatory limit of 90% set by the Saudi Central Bank (SAMA) to maintain liquidity stability. This cautious approach differs from other GCC countries with ratios exceeding 100%.
Corporate Real Estate Lending increased due to Saudi Arabia’s Vision 2030 which aims for economic diversification and urban expansion. Demand for commercial and residential infrastructure has risen due to the major projects like NEOM and the Red Sea, particularly in cities like Riyadh, where international companies are looking to set up their regional headquarters. Improved regulations including a structured land registry significantly boost investor confidence and support lending trends.
The scientific and technical sector also continued to grow with the support of the new Saudi Minds Platform, which encourages research and innovation, further boosting lending growth. This supports Vision 2030’s goal of developing an RDI based economy and improve the kingdom’s scientific and technical landscape.
Q3 sees 107% surge in hotel rooms in Saudi Arabia
RIYADH: Saudi’s tourism sector grew remarkably in Q3 2024 with the hotel rooms having an annual growth rate of 107%. Hotel rooms climbed to 443,200 from 214,600 in Q3 2023, with hotel room licenses more than doubled, reaching more than 3,950 to 2,000 previously. This growth is in line with Saudi Arabia’s Vision 2030’s goal of attracting 150 million visitors yearly and diversify the economy other than oil.
Over $ 1 trillion in investments have been promised by Saudi Arabia for infrastructure projects like Red Sea initiative and the NEOM mega-city. The kingdom has initiated an e-visa programme for easy access to promote global tourism. The kingdom aims to create more than 1 million jobs in the tourism sector by promoting cultural and tourism experiences to boost economic growth and global tourism profile.
In February, Ahmed Al-Khateeb, Tourism Minister announced plans to expand the number of hotel rooms to 250,000 by 2030 with 75,000 through private sectors. Saudi Arabia has already reached 280,000 hotel rooms and plans to develop more 550,000 by 2030. He mentioned that the sector adds 10% to the country’s GDP and 7% to the non-oil GDP, confirming that tourism is an important economic pillar.
The kingdom has already met its goal of attracting 100 million visitors by 2030, with 77 million domestic and 27 million international tourists. This reflects Saudi Arabia’s position as one of the main tourist destinations in the world.
