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Saudi Arabia eyes aviation expansion to get in on crucial tourism market

Making up for lost time, the kingdom is moving to challenge regional players, attract travellers and boost its income.

Saudi Arabia has concluded a successful Hajj season, an annual event that, along with year-round Umrah pilgrimages, makes the kingdom an estimated $12bn.

So far, religious pilgrimages and going there for work are the main reasons people think of when travelling to Saudi Arabia is mentioned.

Even for those trips, visas were hard to get, and the kingdom did not have a reputation as a tourist destination. Saudi Arabia has been known instead for being a deeply conservative country that has been criticised on human rights grounds.

But as travel continues to pick up in a post-pandemic world, the kingdom is working to increase its income from tourism as well as transporting people and goods.

To do that, it is showcasing a more relaxed side to the world, promoting its tourist destinations, and simplifying entry requirements.

It is also planning to replace one of its busiest airports, the capital Riyadh’s King Khalid Airport, with the massive King Salman International.

Quadrupling capacity, fast

These developments are part of Vision 2030, Crown Prince Mohammed bin Salman’s (MBS) signature project to get his country away from a reliance on oil revenues and diversify its economy.

Billions are going into developing ancient sites like Hegra (Madain Salih) and al-Ula, as well as coastal and desert destinations, to attract luxury-seeking tourists and those who want to explore lesser-known locations, according to Charles Phillips, an Oxford-based researcher and consultant.

“The government is highly committed to the sector’s development – and it knows that with Saudi Arabia’s incredible and diverse landscapes, tourism could be big,” Phillips told Al Jazeera.

But, in the past, visiting sites like Hegra – built by the Nabateans and reminiscent of their more famous capital Petra – was discouraged because of associations with idolatry in this conservative nation.

In addition, “so far, the Saudi infrastructure, especially airports, [does] not have the capacity to entertain the amount of traffic Saudi needs to be a real diversified economy,” said Alghashian Aziz Alghasian, a fellow at the Arab Gulf States Institute in Washington.

But Saudi Arabia’s plans to build over King Khalid International, which has a capacity of about 25 million passengers a year, and replace it with the massive King Salman International will mean that Riyadh city will be able to accommodate 120 million passengers a year by 2030.

While King Salman International will be smaller in size than Saudi Arabia’s own King Fahad International in Dammam, it will be among the biggest in the world and will be far busier than King Fahad, and is expected to bring in an additional $7.18bn annually to the kingdom’s non-oil GDP.

“[The airport is] one of several projects designed to propel the country into rapidly globalising markets,” said Joseph A Kechichian, a senior fellow at the King Faisal Centre for Research and Islamic Studies in Riyadh.

“For a country that has long been seen as a closed-off society and unknown destination, expanding connectivity with the rest of the world and increasing the ability to bring people to Saudi Arabia will be very important,” explained Phillips.

Competing regionally, but differently

To date, the busiest airports in the Gulf Cooperation Council (GCC) are in Qatar and the United Arab Emirates (UAE), and the vision for King Salman International is to not only compete with Doha’s Hamad International and Dubai International but surpass them.

“In order for many flights to reach both Doha [and] Dubai, they need to travel over Saudi airspace,” said Alghashian. “The reason why Saudi cities were never real hubs was that the infrastructure and opportunities were not there, and that is what the crown prince is doing – generating the opportunities.”

Qatar and the UAE – followed by Bahrain and Oman – have created top-tier air facilities that serve Qatar Airways, Emirates Airlines, Etihad, Gulf Air and Oman Air.

Qatar and the UAE have greatly benefitted from being hubs for international travel, with their airlines earning Doha, Abu Dhabi and Dubai global recognition in the aviation sector.

Earlier this year, the kingdom announced that it would be launching a second national airline as well, Riyadh Air, which will be based at King Salman International and will be reportedly headed by the former CEO of Etihad, Abu Dhabi’s airline.

King Salman International and Riyadh Air will potentially bring Saudi Arabia the same benefits being enjoyed by its smaller neighbours. Given the kingdom’s significantly larger population and size, it would not be mostly transit traffic, rather it would “chiefly accommodate the burgeoning population and, secondarily, all the expected tourists”, explained Kechichian.

Saudi officials stress that the new airport’s design incorporates green initiatives while the Saudi Press Agency reports that renewable energy will power the airport’s facilities too.

“As planned, this massive project ticks all the boxes in terms of the kingdom’s efforts to diversify the economy, contribute to a ‘green future’, and expand employment opportunities for the country’s burgeoning youth population,” John Calabrese, director of the Middle East-Asia Project at the Middle East Institute, told Al Jazeera.

“It can also serve to complement and support other sectors,” Calabrese added. “Presumably, the new airport will be equipped with a large cargo capacity, which would dovetail with the kingdom’s aim of localising production, some of whose output could theoretically be exported via air cargo.”

There is no doubt that the Saudis are highly ambitious, planning to have the airport up and running within seven years, with all the financial outlay that entails.

Yet, Calabrese warns: “While the successful execution of the airport project might succeed in carving a slice out of their neighbours’ market share, it could trigger a race to the bottom in terms of pricing and profitability.”

As such, it remains to be seen how these mega-investments will impact Saudi Arabia’s non-oil income.
SOURCE: AL JAZEERA
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