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With its ambition Saudi Arabia can become a global hospitality player

Simon Allison

Published: Updated:

In the 1980s the Maldives was essentially a midscale package tourism destination, perceived as being dominated by Italian tour groups. Today, it is one of the leading luxury destinations in the world, with stunning resorts at eye-popping prices.

The Maldives is a perfect example of how a new destination can be created from little more than sand and water and in some ways can be seen as a role model for the highly ambitious projects springing up across Saudi Arabia. This involves over 70,000 new hotel rooms through government-led mega-projects and large private hotels.

One interesting feature of the hierarchy of resort markets is its stability. Over 100 years ago, wealthy guests from Northern Europe would winter in the Côte d’Azur or Tuscany, or perhaps make the crossing to the Greek and Turkish islands. Over 50 years ago, the first package tours began flying to the Balearics and the Costa del Sol. And in the last 25 years, markets like Dubai, Phuket, Bali and the Maldives have established themselves as favourite destinations for regional and long-haul travellers.

Most of these destinations have similar things in common. The European ones combine good summer weather with plenty of history and excellent cuisine. The Asian usually have amazing beaches, top-quality hotels, a relaxed atmosphere and year-round warmth. In other words, they offer multiple reasons for going there.

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Moreover, they have all built up a considerable tourism infrastructure to support demand – plentiful restaurants and bars, mountain, desert or jungle adventures, well-served airports and guest transfer facilities and ease of access in terms of visas and the like.

Once a destination has that, it is very hard for it to fail. Even disasters like the Indian Ocean Tsunami of 2004 have not deterred guests for more than a few years.

A seagull flies pass the view of city skyline and the world tallest tower, Burj Khalifa, in Dubai, United Arab Emirates. (File photo: AP)
A seagull flies pass the view of city skyline and the world tallest tower, Burj Khalifa, in Dubai, United Arab Emirates. (File photo: AP)

As a result of these factors, barriers to entry are high. A new destination needs to build its hinterland of things to do, beyond the hotels themselves.

As an example, Sri Lanka has great beaches and wonderful resort hotels, but most of them sit alone, with little in the way of shopping or eating alternatives around them. Sri Lanka has done well to recover from its long and brutal civil war, but despite its friendly people, low prices and amazing range of scenery, it is still not really a challenger and I suspect lack of local hinterlands is a factor. Bintan Island, part of Indonesia but run as though part of Singapore, also has good hotels and beautiful beaches – but it retains a super-cleanliness which is perhaps too spartan.

Other markets in SE Asia like Mui Ne in Vietnam, Sihanoukville in Cambodia, or Langkawi in Malaysia, are all decent but arguably all lack a unique selling point and have never quite succeeded in breaking through to the big time.

On the other hand, it is possible to see markets which have put themselves on the map from a standing start, like Mayakoba in Mexico, Ras al Khaimah in the UAE or the Egyptian Red Sea Coast, all developed from virtually nothing to, if not regionally dominant markets, then nonetheless strong ones.

Nowhere epitomises the breakthrough quite like Dubai, offering a combination of city and beach living, desert experiences, shopping and eating unlike anywhere in the Middle East, proving it can happen.

Can the Saudis achieve success? What they will need is a combination of factors all coming together at the same time.

Some of course is in its own hands – building the right infrastructure – hotels, airports and attractions – to make people want to come. But there are other factors too. Airlift is vital and, as the Maldives found to its cost, persuading major airlines to add new routes can be difficult until a destination has proved itself. The “hinterland” factor matters here too. There should be locally-based attractions – shisha bars and restaurants, small independent shops, quirky activities – which make people feel they are in a “real place” and not just a newly-manufactured paradise.

There will need to be enough variety of product. So far, Saudi projects have focused on upscale and luxury offerings which may limit the country’s appeal to a wider and especially a younger cross-section of travellers. They seem to be signing most deals with big US and European hospitality brands which often replicate very similar experiences from Mexico to Malaysia and from Norway to Namibia. And a change in perception by the global tourist market about the Kingdom, and some updating to the types of experiences it offers well-travelled visitors, is also going to be needed to ensure success.

Breaking into the big time is not a given and many new destinations have failed to do so. However, the Kingdom has attracted some of the best and brightest people from across the hospitality industry to bring success. It is displaying a can-do attitude, and in recent years has demonstrated its capacity to do things differently. It has the will and it certainly has the money for investment in what is a long-term objective.

This commitment, which is expected to result in the creation of novel experiences, at the cutting edge of sustainability and wellness, means that it has an excellent chance of success.

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Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.