A recently published research report by Riyadh-based Jadwa Investment finds a ripe landscape for investment and job growth potential in Saudi Arabia’s budding tourism sector, set for gains as the Kingdom continues to open up.
“Despite high local demand and consumer spending, the sector has not been a strong performer yet, offering sizeable growth opportunities for small and medium enterprises, foreign investments and public-private partnership projects,” Jadwa writes, noting that globally, tourism accounts for 10 percent of the world’s GDP, 7 percent of global trade and one in ten jobs around the world.
Millions of religious visitors from around the world visit Makkah and Madinah every year, but the sector still shows a great opportunity for development.
Even though Saudi Arabia is host to millions of religious visitors from around the world to holy cities Mecca and Madina every year, the sector nevertheless still shows “a great opportunity for development.”
Saudis’ spending on entertainment abroad reached $26 billion in 2016.
Tourism should also create new jobs for citizens of a Kingdom intent on bringing more into the workforce. Jobs in tourism are mostly labor-intensive, Jadwa notes, with high variety in skills and expertise, the sector shows a substantial opportunity in helping reach labor market goals in the Kingdom.
“Tourism and entertainment will be challenged with rising costs related to expat levies, higher commercial electricity prices, VAT and rising cost of funding,” writes Jadwa, but also notes, “the sizeable government support to the sector is significant.”
