Saudi Arabia’s Ministry of Tourism has launched a $4 billion Tourism Development Fund to promote growth across the sector.The fund will initiate several equity and debt investment vehicles, with an initial $4 billion capital and $45 billion in memoranda of understanding (MoU) already endorsed with private banks.
The Tourism Development Fund, which has been approved by Saudi Arabia’s Council of Ministers, will cooperate with private and investment banks to encourage private-sector developments and incentivize additional investment across the industry.
Ahmed Al-Khateeb, Minister of Tourism Saudi Arabia
“The Tourism Development Fund will play a critical role in developing outstanding tourism experiences and unlocking the full potential of Saudi Arabia as a destination. The launch of the fund at this time, as the tourism sector faces unprecedented global challenges, is a testament to the investor and private-sector confidence in the long-term outlook for tourism in Saudi Arabia. The social and economic importance of the sector cannot be understated: it drives growth and diversification, attracts international investment, creates job opportunities and enhances the quality of life for millions of Saudis.”
The National Development Fund, chaired by His Royal Highness, Crown Prince Mohammed Bin Salman, has accepted the assignment of five board members, who will bring a wealth of experience and investment expertise to the Tourism Development Fund.
Board members are:
Her Highness Princess Haifa Mohammed Al Saud, Vice Minister of Strategy and Investment at the Saudi Ministry of Tourism
Ihsan Bafakih, Governor of the Real Estate General Authority
Stephen Groff, Governor of the National Development Fund
Mohammed Omran AlOmran, Member of the Board of Directors at Saudi British Bank and
Mohammed Al-Hokal, Member of the Board of Directors at the National Commercial bank (NCB).
The Tourism Development Fund’s launch is part of the initial phase of the National Tourism Strategy, which concentrates on developing and improving 38 sites across seven destinations by 2022.
Funding will be extended to encourage mixed-use destinations, to manage gaps in the tourism value chain, and to facilitate technologically-enhanced tourism. Projects backed by the fund will comprise flagship mixed-use and hospitality developments by leading international operators and investors with the purpose of improving Saudi Arabia’s tourism offering, supporting growth across domestic and international tourism, drawing foreign direct investment and encouraging job creation.
Following the opening of Saudi Arabia to international tourism in 2019, tourism has become one of the country’s highest growth potential sectors. It is anticipated to provide for more than 10 percent of annual GDP, as opposed to 3 percent today, and to generate more than one million new jobs by 2030.
The revelation of the fund follows confirmation earlier this year of the Ministry of Tourism as a different ministry with overarching strategic and regulatory control of tourism in Saudi Arabia, and the Saudi Tourism Authority, which is responsible for destination promotion and tourist experience. Together, the three entities will cooperate to develop and improve Saudi Arabia’s tourism eco-system.
