Saudi Arabia’s flagship tourism project, The Red Sea Development Co (TRSDC), plans to have 16 hotels ready by the end of 2023, two more than initially planned in the first phase, as it expects a V-shape recovery in global tourism once the pandemic abates, Chief Executive John Pagano told Reuters.
Owned by a Saudi sovereign fund, and backed by Crown Prince Mohammed bin Salman, the multi-billion dollar project entails developing luxury resorts on 50 islands off the coral-fringed Red Sea coast, where tourists can go diving, and visit a nature reserve and heritage sites.
During the first phase, the project aims to attract 300,000 visitors annually, Pagano said, expecting demand to soar in the aftermath of the COVID-19 pandemic.
“There will be a lot of pent up demand to go and travel as soon as the restrictions are lifted, so I see a V-shape recovery certainly, in so far as tourism is concerned,” he said from Riyadh in a telephone interview.
TRSDC plans to finalize a 15-year loan from banks worth 14 billion riyals ($3.73 billion) by the end of the year to partly fund its 30 billion-riyal capital spending by 2023, as it expects to end 2020 with around 15 billion riyals worth of committed contracts, Pagano added.
Remaining funding needed for the first phase will come from the Public Investment Fund - the project’s owner.
“Nothing has changed, our commitments are in place, our capital is secured and fully committed... we are extremely excited about how we’re going to transform the role of tourism in Saudi Arabia as it exists today,” he said.
The kingdom wants tourism to contribute 10 percent of gross domestic product by 2030, as part of a strategy to diversify the Arab world’s biggest economy away from oil.
Other major projects backed by PIF include the $500 billion NEOM economic zone and the Qiddiya entertainment zone.
Pagano, a former managing director at London’s Canary Wharf Group, sought to allay fears that the Red Sea environment could suffer once the project is completed in 2030, saying it was not aimed at catering for a “mass market”.
“Even in the full build-up by 2030 - when we built the entire development - we will be 800,000 to 1 million visitors per year max,” he said.