Tourism in Saudi Arabia: Growth Trends

Chapter 1: Introduction

1.1 Background of the study

As per the World Travel and Tourism Council (WTTC) in 2014, tourism earns more than 6.990 billion US dollars of economic transactions globally, wherein it employs 265.8 million people. It also stated that tourism had made more significant improvements in the figure, wherein from 1950 to 2013, the arrival of tourists had reached from 25.3 million to 1087 million and is expected to reach 1.8 billion by 2030( Abdurabb, K.T., 2012). Saudi Arabia, which is one of the leading players in the economic and political system, have always left itself into stereotypes such as hijackers, deserts, wells spurting oils, etc. Tourism was not highly appreciated in Saudi Arabia. However, over the past few years, Saudi Arabia has had more significant effects on diversifying its economy. Despite the political tensions prevailing in the middle east, the demands of tourism have increased. There is various tourism attraction point in Saudi Arabia, along with Hajj and Umrah, which can take the country to stand in a higher rank in global tourism (MEED, 2014). Saudi Arabia is one of the largest states of Arab in the western part of Asia, whereby 30 million people reside out of which 2/3 of the people are locals, and rests are foreigners. More than 8 million people of the kingdom are the labor forces who work for tourism sectors. As per Saudi Commission for Tourism and Antiquities (SCTA) and research branch tourism information and research Centre, the number of inbound visitors in the kingdom of Saudi Arabia has increased from 11 to 17 million by 2006-2017(MEI, 2019). Although most of the tourists are mostly due to religious pilgrimages, the growth in the leisure tourism sectors is increasing in a higher extends. World Travel and tourism council have stated that Saudi Arabia’s travel and tourism sectors have contributed to approximately $70.9 billion in the GDP of the country by the end of 2019(BBC, 2019). The increased tourism has made the government make further plans and decisions to attract a higher number of tourists and visitors. The choice of the kingdom to release e-visa has set positive impacts on its tourism market. This decision has made Saudi Arabia become a new tourism spot in the region. It has also done a vision 2030 project by which it can open itself to the world and have made a plan to make an investment of $64 billion upon culture, leisure, and also entertainment projects in one decade (GlobeNewswire, 2020). This strategy has started to enhance the beauty and attractiveness of the kingdom as one of the tourist spots. As per the World Travel and tourism council (WTTC), the Kingdom will attain more than 22.1 million in international arrivals by the end of 2025, which would be 40% greater than the present visits of Dubai (ZAWYA, 2019). Saudi Arabia has also made vast expansion upon hotels and resorts during 2019, and the first phase of the Red Sea project has also been calculated to enhance the kingdom of GDP by US$5.86 billion. It will possess an airport, marinas, and there will be more than 3,000 hotel rooms and availability of recreational actions, which is expected to get completed by the end of 2020(MEI, 2019). The Public Investment Fund of Saudi Arabia has even planned to develop Amaala, which is an ultra-luxury tourism mega project and will comprise 2,500 hotel rooms and will enhance the accommodation for visitors. Kingdom has also designed to improve its domestic visitors in its Kingdom Vision 2030 by doubling the UNESCO heritage sites and strengthening the household spending upon entertainment and cultural activities from 2.9 % to 6% (Castlereagh Associates, 2019).

KSA’s tourists have played a significant role in the enhancement of the UAE economy due to trade and tourism. The majority of the visitors of the Kingdom arrives in Dubai and other parts of UAE like Abu Dhabi and also Ras Al Khaimah. Saudi Arabia is one of the largest markets for Dubai when it comes to occupancy of the room (WTM, 2019). The STR Global has stated that Saudi Arabia has acted as the source market and topped with 1,128,757 visitors towards Dubai and 70,765 visitors towards Abu Dhabi. Moreover, according to Visa’s tourism outlook of UAE have reported that Saudi Arabian visitors have even spent more than $420.4 million upon the visa cards in the UAE by the end of 2019(Gulf Today, 2020). The visitors of Saudi have led to more than 5-6 % of the operators of the hotel guests in the UAE, which have contributed to 4% of the annual revenues. Accor, which is one of the leading hospitality industries, has witnessed 25% of growth in the guests through the Kingdom upon the last two years. The hoteliers of the UAE have also expressed significant growing demands due to Saudi Arabian tourists. Moreover, World Travel and Tourism Council (WTTC) have stated that although Dubai, which is situated in the United Arab Emirates is one of the leading tourism sport and destination in the Arabian Peninsula present figures show that Kingdom of Saudi Arabia is even a top sport for tourism(Middle east monitor, 2019).

1.2 Research Problem

Although, Saudi tourism is developing in a higher extends along with its infrastructure, which is attracting a more significant number of tourists. However, there are various problems associated with Saudi tourism, wherein the country is not able to provide quality services and standards to the firm in an effective manner. There is a lack of oil stations, retail markets, car parking, and other tourism linked business designs. Apart from that, there is a lack of workers who can provide quality services to their customers. In Saudi Arabia, there is a higher dependency upon the foreign workers, wherein attaining services through non-Saudi employees has declined the feeling of authenticity. The dominance of religious tourism and one-dimension tourism development has also resulted in significant issues. It is seen that country possesses a larger number of religious tourists due to Makka-Madina, which is a sacred place for Islam. However, the government is not able to attract non-religious tourists who have acts as significant problems for the country. Apart from this, the concern is also generated regarding how KSA’s new strategy would accomplish the tourism industry. There are several issues linked with KSA’s tourism, whereby matter is also associated with its impact upon the tourism of UAE. Since both UAE and KSA are boasting their tourism activities, these nations are concerned regarding the goals, profits, and propositions along with differences that would lead to attaining competitive advantages.

1.3 Research Rationale

Kingdom of Saudi Arabia is evolving and making different strategies to enhances its tourism. The prevalence of various religious and non-religious is eye-catching and has become the main reason for the increasing tourism in the country. Cheaper oil supply and decline in the costs of the owners have even helped Saudi’s citizens to make the usage of its vehicles for transport, which is also an emerging benefit for the tourism industry. However, there are plenty of problems linked with KSA’s tourism, such as lack of workforce; infrastructure, etc. have led to difficulties. Moreover, there are also concerns stating will the tourism strategy of KSA will either influence the UAE’s tourism or not. Thus, to resolve such issues and problems linked with it, this study has given significant concentration upon the tourism strategy of KSA and has also analyzed its impact upon UAE. This study is vital and essential for researchers who want to understand the tourism industry of KSA and UAE since tourism models and strategies of both the country are explained in depth. This study is also significant as it also explains different aspects and significant areas of Tourism in the UAE and KSA. The tourists who are planning to either visit KSA or UAE can also attain benefits from this study.

1.4 Research Aim

The aim of this research is to analyses the newly developed tourism strategy of KSA and its influence on the UAE.

1.5 Research Objective

The key objectives of the study are:

To understand the critical aspects of tourism in KSA

To review the tourism model of UAE and

1.6 Research Question

The question of this research is as follows:

Is KSA is going to become a tourism hub?

Will the KSA effect on UAE tourism?

1.7 Research Structure

This study is linked with six chapters, which has explained the research study in-depth. The introduction is termed as the first chapter, which evaluates the full research study and has background, rationale, problem, structure, aims as well as objectives of the research. The second chapter of this study is a literature review which makes the utilization of the secondary data to acknowledge the topic of research. The research methodology is the third chapter of the course, which explains research strategy, philosophy, designs, data collection methods, ethical consideration, etc. to achieve the solution of the research. Finding is the fourth chapter, which evaluates the collected data using findings and literature review. Conclusion and recommendation are the last chapters that sum up the whole information and provide advice to the study.

Chapter 2: Literature review

2.1. Tourism Strategy of KSA

According to KSA has huge potential for tourism. This potential is supported by various aspects. For instance, it is regarded as religious heritage, which has developed a positive image, specifically for first time visitors. Furthermore, Saudi Arabian economy is regarded as a strong economy, which assists in tourism development. Since the year 2000s, the nation pays increased consideration to tourism industry. Large hospitality investments occur in key cities of the nation. International hospitality brands bring knowledge transfer with expats. Development of Low Cost Carriers (LCC) also assists Saudi Arabian tourism. The nation arranges one of the most eminent mega events of the globe. Its long run established global expatriate and pilgrim visitor background help to develop cultural ambassador. The UNWTO has also developed project with the national authorities on the role of tourism in economic improvement of local societies. The international demographic improvements also give opportunities for tourism in the nation (Karantzavelou, 2019). It has been noted by Mugbil (1997) that Saudi Arabia has expanded to embrace the changes for past decades. Though the monarchy tends to retain stance over the Islam and Sharia laws, the country is slowly being exposed to tourism. It is to be noted that Katara Hospitality possesses different openings that comprise of two new Qatar based projects such as Marina District of new Lusail City along with Merweb hotel City Center Doha developed in the year 2013. Britton (1991) opined the fact that taking into account the increasing tourism in the kingdom, different new hotels are set to open with 5598 rooms in various destinations in Saudi Arabia. This demonstrates the fact that Saudi Arabia has made massive progress in the context of tourism in the last ten years. Ten years before, there had been enormous hesitancy from the monarchy side to open up to tourism to the West. It has been revealed by Baretje (1982) that there had been two main factors that led to the absence of tourism. The government of the kingdom was mainly concerned regarding the impact of corruption of foreign tourists along with the effects of their dress over the local society. Along with it, s huge revenues that the Kingdom attains from the oil have led to little incentive to promote tourism activities. As revealed by Dew (2000), it has been identified that though the requirement to diversify the economy has been recognized since more than three decades, the kingdom has pursued this particular issue using the development of the export base, by way of the creation of petrochemicals and by stimulating the emergence of the manufacturing activities that have been pushed towards the local market. It has been noted that most of the Saudis tend to consider working for tourism as undignified. As revealed by Diamond (1977), there is a massive change in this attitude, and ten years later, the Kingdom tends to evidence that there is a vast scope for Saudi as tourism capital. It can be revealed by Duffield (1982) that the SCT tends to work hard for assisting in the tourism development of Saudi Arabia in a planned and controlled manner. It works in conformity to Saudi’s development plan. It is developed on a framework such as principles of sustainability, the concepts associated with social equity, and the Kingdom's Islamic values, traditional hospitality, and heritage. EIU (1993) reveals the fact that the creation of the tourism sector in Saudi Arabia tends to be private-sector driven. Under such cases, the private sector needs to play the role of active stakeholder in case of sustainable tourism development by offering high consideration to the social, cultural, economic, and environmental aspects that are linked with tourism development. As stated by Farver (1984), it has been identified that this role can be easily attained by investing funds into the tourism sector, thereby improving the tourism sub-sector and related services, application of quality standards, and training the workforce in the tourism field for guaranteeing quality and development of the services. It is to be mentioned that the public sector tends to make the infrastructure suitable, the needed data and information, and thus have required researches and studies for the development of tourism activities.

It can be stated by Greene & O’loughlin (1999) that the general tourism strategy for the Kingdom of Saudi Arabia tends to signify the outcome of phase I of the National Tourism Development Project, which can be considered as a planning project that tends to be executed by Supreme Commission for Tourism. It can be revealed that for determining the vision for tourism, different essential requirements need to be met. At the onset, optimization of the positive economic, environmental effects, socio-cultural impacts, and eradication of the adverse consequences is essential. As per the views of Jenkins (1980), there is a need for a planned, orderly, and controlled approach to developing the tourism industry. There is a need for transparent legislative enactments that tend to monitor the development and operation of tourism facilities as well as services. It has been stated by Macdonald (2000) that there is a need for integration of education as well as training capacity for supporting the labor market for the Arabians to facilitate employment in tourism along with the development of the tourism services. As per the views of Gardner (2020), to support the vision as well as mission statements, it can be revealed that different strategic objectives tend to be created. They are economic objectives, socio-cultural objectives, and environmental objectives.

Economic objectives

Attain diversification of the economy of the Kingdom

Escalate the revenues of the government

Develop employment opportunities for the citizens of the Saudis and also escalate their involvement in the sector’s workforce.

Encourage the creation of small and medium-sized enterprises such as arts, crafts as well as cottage industries

Creation of market opportunities and thus develop traditional Hajj and Umrah visitor base (The Supreme Commission for Tourism Kingdom of Saudi Arabia, 2020).

Socio-cultural objectives

Demonstrate Islamic values as well as the way of life in any Islamic society

Stimulate further development and thus improve the crafts and promote indigenous food as well as beverages.

Improve cross-cultural exchanges along with strong ties in GCC states, Arab as well as Islamic countries using high travel to and within Saudi Arabia (Hamdi, 2019).

Environmental objectives

Deter mine, utilize and preserve the build, natural as well as socio-cultural resources in a sustainable manner.

Create and implement adequate environmental management systems (Sadi & Henderson, 2015).

New E-visas explained

It can be revealed that to open Saudi Arabia to the world of tourist new tourist visa has been introduced. Previously there were no such things as a tourist visa, and permissions were available for pilgrimage, commercial purpose, or business. The historical changes have permitted non-Muslims to visit Saudi Arabia as tourists. The Muslims are capable of making use of their visa for Umrah that implies tourists can even go beyond Mecca and Medina to any places of their choice in the Kingdom (Henderson, 2010).

Prospects

As per the views of Jafari (2001), it can be stated that huge prospect prevails in expanding the Umrah market into the leisure sector. The different players who target the Asian market where the Muslim population is residing in various countries such as China, Malaysia, and Indonesia are studying this phenomenon carefully. The kingdom aims for near about 15 million Umrah visitors in the coming years, and by the end of the year 2030, it expects near about 30 million people. The country is also investing money in enhancing the booking effectiveness for Umrah pilgrims, in the present times, the ministry of Hajj and Umrah has created a global distribution system. Maqam tends to associate more than 32 Umrah business entities comprises of service providers like Mokhaa handling the Umrah application, different government ministries along with travel agencies.

2.2. Main aspects of tourism in KSA

It can be revealed by Porters (1998) that geographically the bulk of Saudi Arabia is desert. However, there are soaring, juniper clad high mountains of Asir in the southwest, the date palms oasis of Al-Hoff along with spice markets of Jeddah and winding backstreets. Some of the places that can be visited in Saudi Arabia are demonstrated below:

Asir Mountains

Tideswell, Mules & Faulkner (2001) reveals the fact that a considerable number of expatriates living in Saudi Arabia for more than a decade but have failed to visit the Asir Mountains, which lies in the southwest corner of Saudi Arabia. This particular landscape tends to be quite lush and verdant in the case of summers as well. The juniper forest is found to turn white after a hailstorm. More than 500000 wild Hamadryas baboons are living in the mountain, and some other animals are eagled blue agamid lizards and eagles. This area is dotted with basalt stone watchtowers, which can be described as the inheritance of the tribal fighting that used to take place many years ago. In the present times, this particular region has been visited by the domestic tourists where the tourists can board the cable car that descends from lofty heights to a hillside village known as Rijal al-Ma.

Mada’in Saleh

As identified by Sharpley (2002) Nabataean that lies in the far northwest of the country, tends to be remarkable for its preserved carvings suggestive of Petra in Jordan to the north and also is well known for its stark and beautiful desert settings. It is Hijaz, the olden western edge of the Arabian Peninsula, where the TE Lawrence was found to have fought with the Turkish army in the Arab revolt of 1917. Here the remains of old Hijaz railway are still viewed. For many years the authorities of Saudi Arabia did not speak regarding Mada’in Saleh because religious fundamentalists were not much keen on promoting something dating for a pre-Islamic civilization that was identified as Age of Ignorance. In the case of a new multi-billion dollar tourism promotion method, the place shall be viewed on the map.

Al-Hofuf

As opined by Zamani-Farahani & Henderson (2010), Al-Hofuf comprises of an oasis of date palms in a vast area of eastern Saudi Arabia, which can be considered as the largest of its kind in the globe which tends to create a lush green world of streams as well as gardens. The main point of attraction in this place has been the ghostly cave complex that lies within the al-Sarah mountain and has been registered as one of the cultural heritage suites in the year 2018. This particular natural cave has been carved by wind and water erosion that needs some climbing, but they would be worth the effort because it has a cooling effect than the heat that lies outside.

2.3. Arab and Islamic tradition

It can be revealed by Castlereagh & Associates (2020) that Saudi tradition has been deep-rooted in the Islamic teachings and the customs of Arabs. The Saudis learn about Islamic education and Arab customs at an early age from their families or their schools. The main highlight of the year tends to be the holy month of Ramadan along with the Hajj season. There are different national holidays held as well. During the Hajj season, millions of pilgrims from all over the globe tend to visit Makkah. Arab tradition also tends to play a significant role in the life of Saudi. Generosity and hospitality are two main aspects that the Saudi family tends to offer to strangers, friends, and families. The primary expression of hospitality is coffee, which is an intricate cultural tradition. It is provided to the guest in small cups, along with the dates and sweets. The guests are also welcome with the help of the burning of incense, which can be considered as another gesture of hospitality.

Architecture

It can be revealed by Saudiembassy (2020) that Saudi Arabia tends to possess a unique architectural heritage created for centuries. In the olden times, the building designs, as well as materials, were dictated through climate, resources, and geography. In the central areas, builders preferred using adobe for flexibility and insulating qualities. In the western part of Saudi Arabia, it was noted that stone and red bricks were utilized, and the builders of Jeddah made use of the coral from the Red Sea.

2.4. Tourism model of UAE

Harry St. John (2020) reveals the fact that after the unification process of UAE’s seven emirates took place 42 years back, it has been identified that UAE has made it's recognized as the leading tourism destination in the globe. There has been a massive development of airlines such as Emirates and Etihad Airways, a metro station, shopping malls, along with other major attraction in the last 42 years. It has been noted that there have been considerable developments in the tourism sectors with increasing occupancy rates in Dubai as well as Abu Dhabi over the back of the widening network of Etihad Airways as well as Emirates airlines. It has been expected that the UAE tourism sector is likely to flourish by 6.5 percent annually between 2011 and 2021. Previously the destination was merely a small trading hub and is now considered to be an international tourism destination for both businesses as well as leisure travelers using high-class infrastructure that has been created to meet the needs of the market. Dubai is considered to be an entertainment hub that has a vast number of shopping malls and different attraction sites. In the year 2020, Dubai introduced Vision 2020, whose main objective was to lure near about 20 million visitors to Dubai by the end of the year 2020. The aim has also been to triple the contribution that tourism has over the economy of the city. It can be revealed by Michael & Et. Al. (2019) that UAE tends to be a regional hub for exhibitions, meetings, conventions, and incentives. Different sporting events tend to contribute towards luring the tourist towards the city from other parts of the globe. It is noted that Dubai as envisaged different hotels to open in the coming years so that they can comfortably accommodate a considerable number of tourists. It is noted that Abu Dhabi is trying its best to become a capital city, thereby boasting the cultural sites. Abu Dhabi also has the Zayed National Museum for the tourists. It can be found that UAE is trying hard to place itself as a family destination where Yas Waterpark is likely to entertain the tourists all-round the year. India can be considered to be the biggest overseas market for Abu Dhabi, where more than 121763 Indians reside at the emirates hotel during the first no months of the year, which is also followed by the UK as well as Germany.

2.5. Role and characteristics of tourism and travel trade in-country

According to Poirier (1997), it is the travel agent that has a significant role to play in the tourism industry. It can be revealed that travelers in the UAE can be segregated into two types. The first type of travelers can be the ones who come predetermined with the country that they prefer to visit. These types of researchers can be quite challenging to convince because they come well prepared and researched regarding the place that they want to see. The other group of travelers can be the ones who visit the travel agents with some criteria regarding their intended destinations. It is then the responsibility of the travel agent to assist the traveler in choosing their destiny. It is quite often viewed that travelers tend to come predetermined regarding the destinations that they prefer to visit; they visit travel agents to make necessary arrangements in their respective goals. According to Prideaux (2000), it might comprise of advice regarding the choice of the airlines, accommodation, places to visit along with the activities that can be done in their area of visit. Because travelers tend to be relatively conscious regarding the budget of their travels, travel agents must incorporate different travel expenses along with the cost of stay and so on. They are then needed to offer the traveler with the ideal package that would conform to what is required by the traveler. Some travelers present a considerable challenge for travel agents because they have not yet decided where to go. As per the views of Richter & Waugh (1986), such types of travelers tend to visit the agents with a massive list of criteria that need to be confirmed. It is the Emiratis that tend to look for those countries that can offer them with relaxation from scorching heat in their country. Some of the criteria that travelers tend to watch are weather aspects, natural beauty, resorts, peace. According to the information from Seckings (1988), it is identified that the travel agent tends to possess; they are found to present travelers with different options that can be visited. It is also essential for the travel agent to evaluate the preferences of the people in a group of travelers. In some of the cases, it is noted that some individuals in a group prefer exciting nightlife. The destination does not have these criteria; then, the group would end up moving to place with nightlife, although it would meet their preferences.

2.6. Impact of Saudi Arabia tourism on UAE

The government of Saudi Arabia has revealed the fact that it is likely to issue tourist visas for the first time in the history of the nation. These types of activities can be identified to be a direct consequence of Saudi Vision 2030 that tends to determine tourism to be one of the main aspects of diversification efforts of the country. Some researchers wondered the ways in which a flourishing tourism industry could be easily attained in a nation that has been identified to be closed to foreign visitors. Some researchers contemplate how it would impact the equivalent sectors in neighboring countries. Few have been skeptical if Saudi Arabia could compete with the UAE along with its renowned tourism offerings. However, these arguments fail to take into consideration the long journey of the UAE to attain huge visitors figure that it has boasted in the present times. UAE is also not able to demonstrate the offerings of Saudi Arabia. One of the realities that need to be identified has been that UAE and Saudi Arabia are not much different in terms of objectives, proposition, and visitors profile. Such disparities tend to be quite beneficial. It can be revealed that instead of competing with one another, it is noted that UAE and Saudi Arabia are complementary in the case of tourism offerings. It can be shown that Saudi Arabia has been helpful that it is capable of calling on the lessons that have been learned by the UAE and whose journey has been quite remarkable.

2.7. UAE: a successful model

It has been revealed that UAE. (2003) the emergence of UAE from being a small trading port to modern metropolis can be considered as being synonymous with its development as being one of the leaders in the tourism destination. The success of UAE has been attributed directly to its long term vision to alter into one of the leading tourism hotspots in the globe. However, it is a well-known fact that the road to success can never be considered to be comfortable as it took more than four decades to develop the infrastructure that has endorsed UAE's development into a regional hub, entertainment, and adventure tourism. The success of UAE has been its capability to alter itself according to the changing demands in the industry. The nation possesses a tourism vision that meets the needs and requirements of the visitors, along with evolving global trends along with the rise of experiential travels. If the tourism strategy of KSA is successful, it will become a role model for other nations surrounded. KSA is home to many holiest locations of the world along with number of UNESCO global heritage spots. In recent times, it has also announced various changes to its regulations that will encourage international investment into the nation. Tourism is already popular in KSA as international organizations identify the significance of involving with GCC’s biggest economy. In the UAE, cultural tourism is field, which is possibly to grow owing to the opening of Louvre Abu Dhabi, Zayed National Museum and Guggenheim Abu Dhabi, which will signify world’s biggest single concentration premier cultural assets. This segment can give a vital field of cooperation for UAE and KSA. KSA is already a home to holiest locations on the world. Furthermore, it also has the infrastructure, necessary to host millions of individuals, which will prove extremely beneficial in the nation’s pursuit of tourism objectives (Maclean, 2018). The combined offerings of both, the UAE and KSA can positively boost the value proposition of the countries surrounded as important tourism hub. Improvements, for example mega tourism hub in Souq Okaz City, which is presently under construction additionally, bolster the nation’s tourism ambitions. The project comprises interactive museums, a demonstration and convention center and poetry academy that organize festivals and drama productions and handicraft center. It is important for KSA and neighboring nations to cooperate and to provide travelers to the regions with the prospect to experience exclusive history and culture of the region and tourism. It is not just KSA that is the driver, other changes and projects also certifies that the tourism grows, providing additional leisure tourism opportunities for such high population. Improvements like entertainment district, along with opening cinemas and other leisure activities add dynamics to the development of localized tourism within KSA. As a portion of KSA’s fledging tourism strategy, the major tourism development project of developing islands, beaches and other attractions and increased the experiences of travelers (Ekiz & et. Al., 2017). The tourism project also comprises development of association with various hotel groups. The KSA tourism development project provides another dimension to the region’s tourism offerings, specifically for travelers of KSA and beyond. KSA has been highly effective in motivating tourists to visit the nation by performing closely with the key stakeholders to create diverse hospitality segment that supplements the infrastructure to provide an exclusive travel destination. KSA has lot to teach its neighboring nations regarding creation of tourism segment that appeals to crowds. This is where opportunity for growth in KSA and its neighboring nations tourism industries depends, in the capability to identify every country’s individual strength and perform cooperatively to additionally attract travelers to the region.

2.8. Changing times in Saudi Arabia

As per the views of WTO (2005) alike UAE, it can be noted that Saudi Arabia has announced considerable changes in its law that shall promote foreign investment into the country. MICE tourism proves to be quite popular in Saudi Arabia because global organizations tend to determine the significance of involving with GCCs colossal economy. Nonetheless, the process of visa, along with different problems related to foreign ownership that has led to various challenges, has deterred international companies from setting up a permanent presence in Kingdom. It can be revealed that the Saudi and UAE government both have simplified the impact of rising energy bills over low-income Saudi citizens using a payment that takes place under the Citizen account in different ways. It can be revealed by Middle East Economic Digest (1995) that the UAE tends to be successful in luring travelers to visit the place by working closely with the stakeholders to create a diverse hospitality sector, thereby complementing the infrastructure to provide a unique travel destination. It is the government of UAE that has made a move in implementing secure visa methods and in introducing world-class sites to the country so that it can boost the footfall of tourists and spend per person. The UAE can offer huge lessons to its neighbors regarding the ways to develop the tourism sector, thereby appealing to the mass. It can be revealed that the Kingdom of Saudi Arabia doesn’t want to compete with the UAE in this particular respect. Porters (1998) states the fact that the prospect for growth in UAE and Saudi Arabia tourism industries prevails in its capability to determine the nation's strength and also work together to attract the tourists in the region. Saudi Arabia is found to be clear regarding the desire to move forward and thus lure setlists from abroad. It has set its goal of facilitating foreign tourism to the kingdom and thus expanding its entertainment industry.

Chapter 3: Research Methodology

3.1 Introduction

Chapter of research methodology has a more significant role to play in any type of research work. It is because it tends to permit the reader to comprehend the assumptions that are made by the scholar while conducting the research work. This particular chapter in the present research work tends to pay attention to the methodology as well as actions that have been taken to complete the study. It is a research methodology that is quite significant to develop credibility to the research and tries to depict the central ideology and different courses of actions that have been considered in the case of the research work. It is for this particular reason. The chapter tends to offer information related to philosophy, research model, approaches as well as data collection, and many others.

3.2 Research philosophy

This particular research method tends to assist scholars in creating beliefs through which the researchers are capable of constructing plans to execute the work effectively. This research work tends to offer the opportunity for the research scholar to improve their theoretical knowledge that assists in preparing a basic plan for this particular study to attain the desired outcomes. There are different branches of the research philosophy, and among such units, there are four distinct research philosophies that are utilized in the day to day field. These four types of offices are positivism, realism, pragmatism, and interpretivism. To comprehend whether KSA is going to become a tourism hub or not and its impact over UAE, the qualitative secondary approach is found to be suitable. Therefore, it can be revealed that interpretivism research philosophy is found to be ideal for this work. To analyze the gathered information, the scholar made use of this particular philosophy to attain the research aims and objectives. In addition to it, by utilizing the epistemological approach, the research fieldwork is also capable of developing a plan to answer the research question. It can be revealed that the selection of this particular philosophy has enhanced the credibility of the outcomes through which the researcher is capable of attaining more quality.

3.3. Research approach

Soon after the research philosophy section, the scholar tends to be responsible for choosing the right kinds of research approach for this particular research work. By making use of the correct research approach, the researcher is capable of generating authentic outcomes to answer the research questions. There are three particular segments in the research approach, such as the inductive research approach, the deductive research approach, and the abductive research approach. In the context of the deductive research, approach the researcher is capable of developing the hypothesis from plain prevailing research papers. Nonetheless, it is the inductive research approach that tries to create new theories from practical information that has been gathered from primary sources such as surveys and interviews. In the context of this particular study, the inductive research approach has been taken into consideration. This specific research approach tends to assist this research study in effectively carrying future research. The utilization of the inductive research approach has brought credibility and reliability factor for this particular study. Through this research, a new theory about tourism in KSA will be developed. It can be revealed that in this specific study, research questions are utilized to narrow down the scope of the course. It tries to explore any particular phenomenon that takes place in KSA.

3.4 Research design

It becomes imperative for the researcher to ensure the fact that the research that has been conducted leads to common knowledge, and the inferences that have been attained from the study is reliable. The researcher must try to make use of the best research design. There are three kinds of research design, such as exploratory, descriptive, and explanatory. A research study is considered to be illustrative when it comprises of relationship taking place between two or more than two variables that prevail in the course. On the other hand, research is considered to be exploratory when it is linked with discovering the distinct theories that have not been determined in the literature. It can be revealed that descriptive research is dependent on offering detailed understanding as well as knowledge about a particular event. It can be shown that this specific study makes use of the experimental research design. This design is best for the researchers who try to attain vision and insights about a particular subject. Similarly, the study intends to attain ideas about the tourism industry in KSA and UAE. It tries to achieve a proper understanding regarding the situation of KSA and UAE. This particular study is not intended to resolve any issues in the industry. Hence, it can be revealed that experimental design is adequate for this specific study.

3.5 Research strategy

The research strategy can be considered as the basic plan that tends to help The scholars in designing the data gathering methods to collect the factual data and information to offer adequate answers to the research questions. This unavoidable section of the research methodology assists the research scholars to select the research methods to conduct the research work effectively. Quantitative and qualitative research strategies are considered to be one of the main branches of these research methods. To understand the tourism strategy of UAE, this particular study is mainly prepared to select a qualitative research strategy. After the choice of the qualitative research strategy, it is time for the scholar to choose the data collection method for this work to collect the information over the research topic.

3.6 Data collection methods

The data collection method has a more significant role to play in affecting the outcomes of any study. When suitable means of data collection are taken into consideration, it can lead to the attainment of the relevant information, which is likely to improve the overall quality of the research work to a greater extend. There are two types of data collection methods, such as primary data collection methods and secondary data collection methods. To accomplish the research work on KSA becoming a tourism hub and its impact on UAE, qualitative data has been collected. For this purpose, secondary data collection sources have been taken into account. With the advent of the internet, the gathering of the data has been quite easily accessible. There are different reasons for making use of secondary data in this particular research study. Because of Covid 19 pandemic, it becomes quite harassing for the researcher to gather the primary data. Although interviews and surveys can be conducted through the Zoom app or other relevant app, it still fails to offer accurate data for the study. Hence, taking into consideration the present environmental conditions, secondary data seems to be the best to collect the data. The other reason for making use of the secondary data has been that such data is easy to attain, and a vast amount of information about the tourism strategy of the KSA and tourism industry in UAE can be achieved through internet sources. It also proves to be cost-effective and less time-consuming. Online journals, articles, websites, and books shall be used for collecting the data.

3.7 Data analysis methods and techniques

Affecting collecting the secondary qualitative data, it is time to select the data analysis methods. As this particular study tries to understand the tourism strategy of the KSA and tourism model of UAE, the education mainly preferred to analyze the survey through grounded theory. It is considered to be a systematic method that contains the development of philosophy by methodical collection and assessment of the data. In the context of grounded theory, data tends to be analyzed to detailed interpretation. The method is started with the research question, according to the research question, the data is collected, and the concepts about the subject appear to be precise. The ideas tend to assist in the development of new theories. The research process starts with collecting information which is relevant to the subject. Once sufficient data is collected, a pattern for the subject is understood. The thoughts obtained from literatures and secondary data is repeated. This has helped to make the research concepts and research components clear. As more data is collected and reviewed, the subject becomes much apparent. This becomes are basis for creation of new theory regarding tourism in KSA. The following figure demonstrates the steps of evaluating the research subject.

3.8 Accessibility issues

Research related to tourism strategy in UAE and KSA possess specific accessibility issues. One of the main challenges that were faced by this particular study was associated with accessing information about KSA and UAE. Because information was abundant over the internet, it became quite difficult for the researchers to determine the most relevant data. Some of the data were outdated in terms of the date on which it has been published, while some of the websites were not accessible because they did not have a preview. Most of the journals that had data about this research study were paid journals. There were issues with the attainment of in-depth information regarding the tourism strategy of the KSA and tourism model of UAE. Hence, it is because of this reason accessibility issue related to present research work has affected the kinds of data to be mentioned.

3.9 Research limitation

While executing the research paper, the researcher tends to face distinct types of issues that are likely to impact the overall outcomes of the research study. Hence, it becomes imperative for the researcher to take different measures into account to address the research barriers. Each researcher is bounded to complete a particular study within a specified period. However, provided time boundary, it becomes quite difficult for the researcher to perform their analytical work as per their expectations. In the same manner, it has been noted that scholars faced the same types of complexities when completing this research study in time. However, the researcher has tried their best to complete the survey on time. The other issue has been related to the fact that every research paper needs to be completed over a specific budget; researchers do not have adequate funds with them. Hence, to achieve this research on time and budget, the researchers have taken some strategic measures. The study concentrates on secondary data, so sometimes, the scholar faced issues in collecting the data. Certain websites were not authentic, while others did not offer useful data at all. Some sites demanded online payment before precise information, and specific online papers required authentication before collecting the data. These are considered to be the major limitation for this research study that needs to be taken into consideration when conducting investigations of similar types shortly.

Chapter 4: Findings

4.1 Tourism strategy of KSA

International tourism has become one of the significant industries whereby Saudi Arabia have devoted lesser attention to international leisure tourism due to social, economic, and political reason. Tourism in the Kingdom of Saudi Arabia is not new. Still, domestic tourism was projected at 14.5 million trips worth SR 22.4 billion, whereby 44% of the trips were made for leisure purposes (The Business Year, 2015). 19% for visiting relatives and 27.5% to take the activities of Umrah. In the same year, 6.3 million foreign tourists have visited the Kingdom to perform religious activities in Umrah and Hajj. As a framework for Islam religion, the Kingdom of Saudi Arabia has aimed to develop sustainable tourism for socio-cultural, economic, and environmental benefits, which have reflected on Islamic values and traditional hospitality (Nagy, 2012). The Tourism General strategy for the Kingdom of Saudi Arabia has been planned by the Supreme Commission for Tourism to realize tourism development is planned and controlled manner along with national development plans of the kingdom. The policy framework has been made with a focus on principles of sustainability. The concept of social equity has also been made in terms of socio-cultural, economic, and environmental benefits, along with Islamic values, traditions, and heritage of the Kingdom (Malek & Costa, 2015). The National tourism development strategy is one of the strategic projects of tourism development in the Kingdom of Saudi, which is made by the Supreme Commission for Tourism. The system has taken into consideration regarding the vision and mission of tourism and to assess tourism resources, target market along with future activities for tourists (Nagy, 2012). The strategy is linked with ethics and values like Islamic values and principles like Islamic values and codes which are compatible with Saudi society. The system has also planned to become social, cultural, environmental feasible, and sustainable, which helps in the national economy (Gulf Today, 2020). The national tourism development strategy, which was prepared by SCTA, possesses three-phase wherein the first phase got completed in May 2002 and had led to the preparation of general policy to develop tourism sectors in Saudi for the upcoming twenty years up to 1441H. The National Tourism development strategy was termed as a concept for the strategic framework and essential policies for the development of tourism (The Business Year, 2015). Within the national tourism development project, general strategy was also accomplished by phase II, which was an action plan for the five years of usage of available design and stage III, which leads to provincial tourism plans and tourism development areas programs. The SCTA started the development of the new organization to develop tourism and institutional support. It also established Provincial Tourism Development Councils (PTOs) in various provinces of the Kingdom of Saudi Arabia, such as Baha, Qaseem, Najran, Makkah, Madinah, etc. Each of the PTO is assigned with data to support the tourists and organize the meetings and duties.

4.2 Critical aspects of tourism in KSA

Saudi Arabia island of two of the main holy pilgrimage sites that are attaining tourists for 1400 years. Apart from that, the development of oil, commercial, and urban development, along with substantial industries, have also led to significant growth in the modern tourist industry (WTTC, 2017). It is stated that Saudi Arabia is not a new place for the sub-sector of tourism but is only new to modern tourism. It is found that Saudi Arabia uses to possess 6.4 million trips in 1421 H(2000G) traditionally were a primary focus was the Red Sea, which is present in western coasts mainly Jeddah and mountains near Asir and Taif. It was also seen that Arabian Gulf has also attracted various domestic tourists, mostly from Riyadh and the eastern region of the Kingdom (Malek & Costa, 2015). The Asir region, which possesses mild climate, moderate rainfall, and green countryside, is also a significant aspect of tourism in Saudi Arabia. Abha is also the main town of Asir and the main point of tourism. In addition to that, it is also found that the resort city of Taif, which is 150 kilometers southeast of Jeddah. It is 2000 meters above the level of the sea in the Hejaz mountains, which attracts local customers and offers cool summer retreats, which is a short drive from Jeddah. Apart from this, the main sites of attraction are Makkah Al Mukaramah, and Al Madinah Al Munawarah is one of the primary areas of interest for the majority of domestic and international visitors to perform Hajj and perform Umrah(Pervan, Al-Ansaari & Xu, 2015). During the time of Hajj, millions of pilgrims visit Makkah. KSA also possess business tourists wherein Riyadh and Jeddah keep Riyadh Exhibition Centre and Jeddah international exhibition Centre for conferences and meetings. Apart from that, the ancient building designs, along with materials used, are also significant sources of attraction. There are also other sources of interest in different places of KSA, such as caves, climbing, and cultural heritage (Gulf Today, 2020). It is seen that there are various sites and locations apart from religious areas in KSA, which promotes tourism. Thus, it is stated that KSA should promote other places apart from sacred sites to increase both domestic, business, and international tourists apart from religious tourists.

4.3 Tourism model of UAE

UAE possesses interesting ideas and policies regarding tourism since its independence. It has established a model that was based on the cultural heritage and hospitality of people in the 1980’s. These states have made tourism infrastructure development and different tourism marketing strategies to attain useful outputs (Malek & Costa, 2015). In the initial stage, the UAE has developed and made a balance between government policies and tourism. To enhance tourism, the government has also invested a tremendous amount of money on physical development and upon sports and shopping festivals. Abu Dhabi is also offering a more comprehensive range of options like green parks, beaches, marine, and sports, along with delights for shopping (Xiang, Schwartz & Gerdes, 2015). UAE government has also made a more significant investment in smart cities, whereby technology development has kept into considerable consideration. ICT has provided a solution by focusing on improvement in tourists’ experiences by enhancing efficiencies and improving automation (WTTC, 2017). The UAE government also focused on smart tourism destinations by comparing cloud services, the internet of things, and end user’s internet services system. The intelligent tourism system effectively utilized the knowledge and configured solutions to meet the needs of users. The collaborative approach has thus helped in making an interface for better coordination, communication, and reciprocity (Department of Economic Development, 2013). The UAE Vision 2021 has also given the focus on UAE to become the touristic, economic and commercial capital for billions of people by the transition to a knowledge-based economy, promotion of innovation, promotion of innovation and R&D along with the strengthening of the regulatory framework. The UAE government has also shown interest in the expansion of its tourism sectors. The Dubai Tourism strategy 2020, which was launched in 2013, was a strategic roadmap for the attraction of 20 million visitors per year by the end of 2020. The government has given the primary focus on events, infrastructures, services, and packages for Dubai to increase the number of visitors (Xiang, Schwartz & Gerdes, 2015). This has helped in enhancing the share of the market with higher growth. The government of UAE also made Sharjah tourism Vision 2021 plan to attract more than 10 million tourists by the end of 2021. The government has adopted innovative tourism approaches to enhance the experience of tourists using a creative solution. It has also partnered and made collaborative actions to provide tourism facilities and capabilities and made effective promotion by delivering world-class tourism facilities and capabilities. The Ajman strategic plan for tourism 2015-2021 has also applied development and sustainability in tourism sectors to become the choice of destination by effective strategic partnership and innovation (Henderson, 2014). It creatively has empowered the workforce and enhances sustainability and growth. Lastly, the Abu Dhabi Economic vision 2030 has acknowledged the long-term diversification, which is one of the essential milestones for Emirate of Abu Dhabi. UAE is also giving a significant focus on hospitality services wherein lifestyle hotels are highly preferred. Thus, it had been analyzed that innovation has played a substantial role in the tourism model in UAE, wherein its involvement is higher in planning and decision making to enhance responsiveness, responsibility, and participation(Department of Economic Development, 2013).

4.4 Impact of KSA as a tourism hub on UAE

The increase in the growth of KSA has not only increased the economy of the country but has also assisted in enhancing the economy of the UAE. The development in the Saudi vision 2030 from religious pilgrimage sites to modern tourism has also improved the tourism industry of the UAE. There are a majority of visitors of the kingdom are found visiting UAE during their trip to Makkah, Madinah (Arabian Business, 2019). The excellent relationship and agreement have further increased tourism wherein joint visas for Saudi Arabia, and the UAE has also influenced tourism. However, in 2019, the visit of Saudi tourists in UAE has declined by 20% as compared to 2018 as per the Dubai department of tourism and commerce marketing. It is found that the number of Saudi tourists that visited Dubai has amounted to be 1.6 million visitors during 2019, which reveals that Saudi visitors have led to 9.6 percent of the total visitors. However, visitors number visiting UAE from Saudi Arabia have grown in the fourth quarter of 2019. The multi-dimensional market and campaigns of the UAE have also attracted a larger number of KSA tourists. The Expedia group has stated that Saudi Arabia is the highest traffic volume generates 1.25 million visitors. Dubai is also emphasized to focus on families of Saudi, tourists’ campaigns, and promotion for KSA is relevant and accessible for segments (Henderson, 2014). In addition to that, the stability in the attractiveness of Dubai has also attracted Saudi millennials. Saudi Arabia’s tourists visit Dubai due to premium accommodation and infrastructures. The travelers are also willing to pay increased prices for the personalized luxury provided by UAE at higher-end hotels (Invest Saudi, 2019). The higher luxury hotels, residences, and service apartments, along with innovative infrastructures, have also attracted a larger number of visitors. As per Arabian Travel Market 2018, the UAE has more than 73% of the luxury properties of the region, which will continue to enhance. The report has also stated that Dubai gave 717 hotels and hotel apartment buildings for accommodation with the availability of 118,039 rooms. The coincidence between the Dubai shopping festival and holidays in Saudi has also increased the tourism of Dubai. The Saudi tourists are the critical feeder market for the UAE and have enhanced the targeted by the tourism authority in UAE (Arabian Business, 2019). The more robust relationship between the UAE and KSA has also helped in improving tourism. It is found that On Saudi national Day, Dubai projects the Flag of Saudi on Burj Khalifa skyscraper, wherein Abu Dhabi organizes the Roads of Arabia exhibition at Louvre. This also motivates Saudi travelers to visit UAE, which further leads to tourism growth. The different visions and plans of the UAE to make innovation change have additionally attracted a larger number of people from all over the world, along with Saudi Arabia. Moreover, the government is also taking further sustainable and strategic steps to bring smart tourism, which has further acted as the primary source of attraction for tourists (Invest Saudi, 2019). The increased standards of people of Saudi along with advanced in spending capacity, have also further motivated the travelers to visit places like Dubai, which is one of the most preferred tourist spots in the world. Thus, it had been analyzed that the tourism growth of the Kingdom of Saudi Arabia has enhanced the tourism sector of the united Arab emirates and has helped in increasing economic growth.

Current Tourism Industry Growth Trend in KSA and its Key Aspects: A Case Study

Overview

A rapid pace of transformation has been undergoing in the business sectors in KSA to accomplish the Saudi Vision 2030. The country’s travel and tourism sector can be considered as one of the most critical components of the KSA’s long-term growth and development plan (Ekiz et al., 2017). The country is well-known for its primary site for pilgrimage. The religious tourism sites such as holy mosques in Mecca and Medina remain key tourism attractions for millions of global visitors each year. Also, the recovery outlook is grounded on the increasing revenues in major religious tourism source markets are a few significant factors that are driving transformation in the KSA’s tourism sector. Nevertheless, steady focus and increasing investment in economic diversification efforts have also been identified as a critical part of KSA’s Vision 2030 strategy (Yusuf, 2014).

Current Market Size of Tourism Industry in KSA

Tourism has been recognized as one of the most critical components of KSA’s economy, as well as it is also considered as a significant source of foreign exchange revenue. According to the recent evaluation, it has been identified that the tourism sector of KSA is accounted for contributing 9.3% of the country’s annual GDP growth rate (Mordor Intelligence, 2020). The current market trend of the tourism industry in KSA has been undergoing a significant transformation with the anticipation of a substantial increase in the country’s revenue. As per the recent observation, it has been estimated that the projected revenue of the travel and tourism market of KSA is to reach US$ 2,238 million during the year 2020. Moreover, the payment is also anticipated to represent annual growth rate, i.e., CAGR 20.3% from 2020 to 2023 and which will be a project market volume of US$ 3,895 in the year 2023 (Statista, 2020). Therefore, it is evident that the market size of the KSA’s travel and tourism industry is all set to achieve a massive increase in its annual revenue growth rate. Moreover, about the anticipated volume of revenue, it is also evident that the current tourism industry of the country is strongly driven by the increasing trend of investment as well as development strategies. The role of the hospitality service segment is also paramount when talking about the spectacular revenue growth in KSA’s travel and tourism industry. According to the estimated projection of different parts of the sector, the travel and tourism industry of Saudi Arabia is also strongly driven by the contrition of its hotel business industry. The hotel industry of the market is projected to reach a market volume of US$ 1,473 million in the financial year 2020 (Statista, 2020). The figure significantly represents that the current market size of the KSA’s tourism industry has been evolving across its all aspect of operational units. The key elements, such as hospitality sectors and online booking and reservation, are also crucial factors that lead the tourism industry of KSA to achieve evolving revenue growth.

Revenue Growth Statistics of KSA’s Travel and Tourism Industry

In the context of annual revenue generation, the travel and tourism industry of Saudi Arabia has been recorded US$ 3,834 million in the year 2019. The figure is significantly higher than US$ 3,638 million in 2018 and US$ 3,524 million in the year 2017, respectively (Statista, 2020). However, the revenue figure has been anticipated to fall sharply with a model of US$ 2,238 million in the year 2020 due to the outbreak of COVID-19 pandemic globally. According to the following illustration (Fig.1), the sector is expected to find its actual growth rate from the year 2021. The annual anticipation in the revenue growth rate has been expected to reach US$ 3,023 million in 2021, US$ 3,522 million in 2022, and US$ 3,895 million in the year 2023 (Statista, 2020).

COVID-19 and its Impact on the KSA Strategy

The economic shock resulted from the outbreak of COVID-19 crippled the global tourism industry throughout 2020. However, the tourism sector of the KSA remains hopeful due to its vital strategic directions and performance towards achieving its Vision 2030. The industry is expected to re-emerge with increasing investment as well as strengthening the capacity of the range of tourism sector components in the country. Nevertheless, the tourism industry in KSA also seeks to increase collaboration with local and international tour operators. Therefore, it can be stated that the industry can establish its strong financial performance following the impacts of the COVID-19 pandemic (Statista, 2020). Nevertheless, the sector can also accomplish its Vision 2030 strategy with its long-standing objectives. The COVID-19 pandemic has forces KSA to reduce the budget of about $8 million from its Vision 2030 project of tourism modernisation program. COVID has also resulted in reduction of oil prices to about $11.57 per barrel, which leads to contraction of GDP for about 3.2%. Although the oil segment prices have started growing, the reduction is likely to have certain influence on tourism. The investment reductions for tourism development project, which are portion of the country’s extensive severity measures announced by the KSA government, are expected to have some negative influence on tourism development strategy to a certain extent (Weatherley, 2020).

Critical Potentials in KSA’s Tourism Sector

Despite its religious pilgrims such as Mecca and Medina that garner a large volume of global visitors, the tourism industry of KSA also has different other potential factors that play a critical role in the country’s travel and tourism business. KSA has a geographical advantage as the country intersects continents such as Europe, Africa, and Asia. Moreover, the government also has abundant historical and natural resources along with its vast and rich history that attracts the attention of a large number of visitors each year. Simultaneously, the authenticity is another critical potential of KSA’s tourism sector. The nation upholds diversity in its cultural heritage in respect to the food habits, cultural attires as well as range of entertainment areas (Ekiz et al., 2017). Therefore, the rich cultural heritage, along with unique cultural diversity, is also a significant attraction of KSA’s tourism sector. Also, KSA is considered a stable tourism destination within an uncertain global region, and this is also a critical indicator that brings continuous growth and development of the entire travel and tourism sector at large. KSA has long been recognized as the leading producer of oil, which facilitates the country to build a harmonious and sustainable geopolitical relationship with other global countries. The government has been further identified as one of the most ideal tourism destinations for visitors from different geographical regions despite the existing Islamic countries around the globe. The tourism sector is also equipped with a historical and advanced infrastructural setting that gradually meet the tourism desires of the global visitors irrespective of different global regions. Alongside the strong geopolitical relations with the other international nations, the KSA is also advanced in the context of urbanization with highly integrated advanced technological tools and equipment (STR Global Data, 2013). Therefore, the demographic factors such as the increasing rate of youths with high enthusiasm in advanced information and technology as well as higher educational level are few other vital potentials that have been flourishing the pace of growth in the KSA’s tourism business sector. The robust economy is another key strength of KSA, which has been enabling the tourism sector of the country to achieve a new benchmark of growth and development. The country’s economic viability is facilitated by its proximity to a range of emerging global markets mainly, India, Turkey, China, and GCC member states. Additionally, increasing focus on fostering its FDI policies and eliminating laws that prohibit the independent operation of multinational organizations can also be considered as a significant strategic move of KSA. It is eventually facilitating its travel and tourism business (Yusuf, 2014). Additionally, the competitive tax regulation, extended energy, and fuel supply network for a range of foreign investors are also a few major critical factors behind the growth of the travel and tourism sector of the KSA.

Limitations and Recommendations

KSA has been attaining the significant popularity of being an ideal travel and tourism destination. Annually, the country witnesses a steady increase in its revenue generated from the KSA’s travel and tourism sector. The government’s effort towards renewing marketing and promotional strategies that have been enabling KSA to render various types of tourism services to a large group of foreign nationals from different global regions. However, there are some critical factors associated with the political, economic, and environmental challenges that have been creating barriers in the growth and development of the tourism sector to some extent. In this context, legal factors such as strict visa procedures are one of the significant barriers that can reduce the flow of visitors in the country. KSA includes less or minimum consideration in delivering tourist visas for people from different regions unless visiting the Holy pilgrims of Mecca and Medina during Hajj. However, the country barely allows visitors to mainstream tourism attraction that the country persists as its cultural heritage. Therefore, a significant focus on mitigating possible obstacles for foreign visitors can enable the government to cater to a large number of tourists each year. Also, Vision 2030 is one of the holistic strategic approaches that the government has taken in the recent past year. However, the strategy for vision 2030 includes central prohibition for international hospitality and leisure service providers. The government of KSA should provide equal opportunities for foreign marketers as well if it seeks to gain sustainable growth in its travel and tourism business. A similar focus on FDI in the travel and tourism sector can empower the potential of KSA’s tourism sector, and it can further lead the country to become the most desired tourism destination.

Chapter 5: Discussion

5.1 Identification of Tourism Market of KSA

The tourism market in KSA has been rising and growing like never before, in the last couple of years. Various Governmental policies have to remove the tag of “conservatism” that was generally linked with the country. It has been found through the literature review that, being the origin of Islam, KSA has been attracting Muslim pilgrims from all over the world for 1400 years. Visiting the places of great religious significance like Mecca, Madina, Ha’il, etc. is a dream for millions of Muslims living in diverse parts of the world. Besides the religiously significant sites, Porters (1998) mentions that KSA offers a beautiful opportunity to enjoy the immense natural beauty of juniper clad Asir mountains in the southwestern part of the country, the date palm oasis of Al-Hoff and the coasts of the famous Red Sea. Even historically and culturally, the richness of KSA merely is undeniable. It must be noted that KSA is still primarily considered a religious, historical, and cultural hub, and Muslims from the central portion of the tourists who visit the country. In 2018, KSA decided to grant visas to non-Muslims to attract more and more tourists from the world over, although they had restricted the entry of any non-Muslims to the religious places of Mecca and Madina. It is clear from the study that the KSA Government wants to add tourism in the list of the major financial contributors to the country, but further enhancement of its tourism market would require a systematic removal of the persisting issues in the areas of language and communication, infrastructure (both in terms of physical framework and human capital) and productive human resources.

5.2 Key Market Indicator

Looking at the market indicators that have been found in the course of this study, it is understandable that since the last decade, there has been a massive boom in the tourism industry of KSA; this has significantly contributed to the national economy and provided a lot of career opportunities for the population. The Business Year (2015), states that albeit tourism in KSA is new, the domestic tourism IN 2015 was projected at 14.5 million trips worth SR 22.4 billion, in which 44% of the trips were made for leisure, 19% for visiting the relatives, and 27.5% for taking the Umrah activities. 6.3 million foreign tourists had visited KSA for religious purposes. As per the report of UNWTWO (2014a), The number of international tourist arrivals in the year 2013 was 52 million, and it generated 47 billion dollars. In the year 2013, the net contribution of the travel and tourism industry to the GDP of KSA was 167.6 billion USD, which is 6.5% of the total GDP. 6.5% of the employment was provided by this sector, which created job opportunities for 4.5 million people. It was expected that the travel and tourism sector would contribute 70.9 billion USD to the country’s GDP in 2019. The stark increase in the amount as compared to 2013 is a sure sign of the rapid and gigantesque development of this sector. According to Colliers, the number of international arrivals to the kingdom is expected to increase at 5.6% per year rate. 23.3 million visitors are expected in 2023. Moreover, with radical initiatives like Saudi Vision 2030, the nation has made an elaborate plan to reduce its dependence on oil, to diversify its economy. Public service sectors like health, education, infrastructure, recreation, and tourism are to be developed phenomenally. Thus, it is clear from the research study that the travel and tourism industry in KSA is going to evolve into a goliath in a short while.

5.3 Review of the Tourism Market of UAE

As mentioned by Harry St. John (2020), since the unification of the 7 emirates that took place 42 years ago, the travel and tourism sector of UAE has skyrocketed in terms of the number of visitors it attracts from the world over, the income generated and the number of job opportunities created. From a small trading center, the country has become a significant tourist destination, which was visited by 16.73 million people in 2019. The chief attractions include the world’s tallest building Burj Khalifa, Sheikh Zayed Mosque in Abu Dhabi which is a splendid fusion of contemporary design and ancient craftsmanship, the Hajar mountains which offers opportunities of hiking, trekking, and bird-watching, the highest peak of UAE, Jebel Jais, the Dubai beaches and many more. As per WTTC (2017), the UAE government has made a considerable investment to create smart cities, to enhance the tourism experience by improving the efficiency of automation. In 2017, visitor exports helped UAE to generate AED 123.5 billion, and it was expected that in the following year, it would grow by 5.3% by attracting 21.27 million international tourist arrivals. An 8.6% per annum increase is expected in the tourism sector of UAE till 2028, which would increase the contribution of this sector on the national investment from 8.25 to 11.2%. Michael and et al. (2019) in their work The UAE's Tourism Competitiveness: A Business Perspective, have mentioned that with plans like UAE Vision 2020, the country has decided to take progressive leaps in the direction of expanding the tourism market big time; the target of this plan is to attract 20 million tourists by the end of 2020. Despite the ambitious strategies of UAE, some challenges remain on the way. According to the report of the Dubai Department of Tourism and Commerce Marketing, the visit of Saudi tourists in UAE has reduced by 20% as compared to 2018. With the development projects and its decision to release non-touristic visas, KSA tourism has taken steps to transform itself into a prominent player in the market of the Middle East, thus posing a massive threat to the neighboring countries like UAE. The data gathered from this study reveals that, with each passing year, the KSA tourism sector is developing progressively, and in turn, challenging the stronghold of UAE tourism to a great extent.

5.4 Evaluation of the Impact of KSA Tourism Hub on UAE Tourism Businesses

KSA tourism has been contributing to the economic growth of the UAE since its inception period. Saudi Arabia has been increasing in the tourism sector, with numerous hospitality organizations and destinations (WTTC, 2017). During the last decade, KSA has made massive progress regarding the tourism industry. Based on location, KSA has proved to be a valuable nation. The geographical advantage has benefitted the country to a great extent as it is located at the intersected place of Asia, Europe, and Africa. Moreover, the country has an abundance of historical as well as natural resources (The Business Year, 2015). The most potential indicator of tourism attraction in KSA is that it is uncertain regarding the region. Additionally, the robust economy of this country has also proved to be one of the main strengths of KSA. UAE has tended to be a regional hub for the meetings, exhibitions, incentives, and conventions. The travel agents play an integral role in the growth of the tourism industry in the UAE. They help the tourists in reaching their desired destinations with comfort and ease. The inbound section of the KSA has remained substantial and poised to develop significantly as tourism has drawn travelers across the world. The extent of domestic tourism has also encompassed the residents of the KSA who are more likely to travel in the destinations outside their domestic areas for traveling (Gulf Today, 2020). However, KSA and UAE are not potentially distinguished in terms of objectives, visitors' profiles, and propositions. Both of them are not in competitiveness with each other. Instead, they are complementary regarding the offerings of tourism. Being emerged as a small trading port, UAE has transformed into the gigantic metropolis in the present times attracting innumerable tourists from all over the world. Among all the long-term visions, UAE is aspiring to become one of the leading tourist attractions of the world (Malek & Costa, 2015). For this purpose, the KSA has been proved as a significant lead to the growth of the tourism industry in the UAE. UAE has implemented various changes in the tourism policies to facilitate foreign tourism. The Supreme Commission has planned the general tourism strategies for KSA to realize and tracking the development of tourism growth in the kingdom. These strategies are contributing to the sustainability of the tourism industry in the UAE. These strategies have considered working on the vision and mission of the tourism sector of UAE for assessing the tourism resources, prospect of tourism, and its target market (Nagy, 2012). Furthermore, it is found that the UAE has possessed distinct policies and ideas regarding tourism since it got independence. Based on cultural heritage and the hospitality of people, the UAE has developed a tourism model that implements various tourism marketing strategies for attaining the best possible output. UAE has adopted a vision named UAE Vision 2021 with a particular focus on the economic, touristic, and commercial production of the people by transiting knowledge regarding innovation, progress, economy, development in R&D and strengthen the regulatory framework of the entire nation (Department of Economic Development, 2013). The rapid growth in KSA has also contributed to the whole of change in the economy of the UAE. The luxury hospitality sectors, service apartments, residences in KSA have attracted more and more tourists from across the world who are willing to pay any rate for enjoying the coziness. Along with these, the government of UAE is also implementing various strategic and sustainable measures for bringing smarter tourism to entice more tourists in KSA (Arabian Business, 2019). From the case study of KSA, it has been found that KSA has adopted various transformational strategies to support the accomplishment of the Saudi Vision 2030. Till now KSA tourism industry is contributing to more than 9% in the annual GDP growth rate of UAE. In the last year, the tourism industry of KSA has earned a revenue of nearly US$ 3,834 million that is significantly praiseworthy. However, it has been found that the recent outbreak of the global pandemic COVID 19 has initiated a sharp decline in the GDP of KSA. Yet, it can be said that with the utilization of strategic measures and the spontaneity and determination to achieve the vision of 2030, KSA is combatting against the significant loss in the tourism industry (Statista, 2020).

Chapter 6: Conclusion and Recommendations

The key aim of this research study was to examine the newly developed tourism strategy of KSA and its impact on the UAE. In order to achieve this aim, the study involved the use of qualitative method and conducted systematic review of the secondary data collected from articles, journals, and books. Besides, reliable reports and documents published by the relevant authorities were also considered in this study. This chapter presents the summary of the key study findings in the light of the aim of the study formulated in the chapter one of the study. This chapter further provides practical recommendations that the KSA can implement in order to become a vibrant tourist hub in the Middle East.

6.1 Conclusion

Oil rich KSA is identified to be rapidly diversifying its economy and has embarked on tourism journey for the last few years. Currently, the tourism market of the KSA is estimated to be US$ 2238 million but it has been estimated that the tourism market of the KSA will grow at CAGR of 20.3% for the next three years. Moreover, the value of the tourism market of KSA is anticipated to reach US$3895 by 2023. However, attaining the growth of 20.3% annually is challenging and to achieve this growth rate it is essential for the KSA to develop concrete roadmap and policies. In the wake of the on-going global health crisis caused by the outbreak of COVID 19 pandemic, it has become more challenging for the KSA to achieve the steady growth in its tourism sector as the outbreak of this pandemic has severely influenced the global tourism industry. Nonetheless, the study finding suggests that despite the several challenges faced by the KSA, it has been continuously engaged in improving its tourism attraction and has demonstrated its strong commitment towards becoming one of the major tourist hubs in the Middle East. In this regard, the Supreme Commission for Tourism, which is a nodal agency for tourism related policies and strategies in the KSA has come up with a concrete policy framework for transforming the KSA into a popular tourist hub in the next few years. In this regard, the Commission has developed and launched the national tourism development strategy with a vision to assess the tourism resources, the target market and prospects for tourists’ activities in the country. Moreover, this tourism policy framework focuses on two important aspects including sustainability and social equity that lays considerable attention on Islamic values, tradition and heritage. At the same time, this tourism strategy adopted by the KSA not only aims at exploring the tourism opportunities present in the country, but it is also an attempt to diversify from its oil based economy. It has been found that this national tourism development strategy involves three key phases. The first phase of the strategy was to develop a strategic framework and policy for the tourism development in the next 20 years was already completed in 2002 while the second phase involved developing a five year action plan for implementing the recommendations and policies included in the first phase. On the other hand, the third phase involves implementation of the strategies and action plans identified in the first and second phases. The study finding also suggests that compared to the KSA, the tourism development activities in UAE started much earlier. In fact, the UAE has laid considerable attention on the developing itself as a popular tourist destination since its independence. The UAE introduced its tourism model back in 1980s, which was focussed on hospitality sector and cultural heritage. Over the decades, the UAE has made considerable investment on developing and improving its tourism infrastructure and has also undertaken aggressive tourism marketing strategy. In this regard, it has laid considerable importance not only promoting cultural heritage but has also invested heavily on developing world class cities like Dubai, which is a major business and tourist hub not only in UAE but across the world. Visitors to the UAE not only experience the rich Islamic culture and heritage but it also allows them to experience the modernity on the other side. The UAE has been continuously striving to expand its tourism sector and has launched several strategies to attract and appeal tourists across the world to visit the country. In this regard, The Dubai Tourism strategy 2020, which was launched in 2013 aimed at attracting 20 million visitors annually by 2020 has led to a dramatic rise in the numbers of visitors to the country. Today, the UAE has emerged as one of the most popular tourist destinations as well as the most competitive in the Middle East region.

The study finding suggests that the KSA has ignored its tourism prospects for a long time while UAE has embarked on the tourism journey much earlier. Today, the UAE is recognised as a tourism and business hub in the Middle East region. However, the KSA is a home for some of the holiest places in the world and has rapidly developed a good religious tourism infrastructure. Each year millions of pilgrims visit the holy city of Makkah for haj. In addition, the KSA has been making considerable investment on the several other areas of tourism and hospitality sector. It is anticipated that in the next few years the KSA will become another popular tourist destination in the Middle East region and it could possibly emerge as another tourism hub in the region. Nonetheless, the emergence of the KSA as a tourist hub in future may have significant implications on the tourism economy of its neighbouring countries, particularly the UAE. In this regard, it has been anticipated that emergence of the KSA as a tourist hub might result in the decline in the foreign investment to the UAE as the foreign investors as well as expatriates from different countries that are currently in the UAE may shift to the KSA for better opportunities. Moreover, the UAE currently holds a significant proportion of the tourism market in the Middle East. However, with the emergence of the KSA as a tourist hub in the region, it might also result in redistribution of the travel and tourism market share. In other words, the tourism market share of the UAE may witness decline in the future. Additionally, the KSA, which has had a strict visa rules and regulations, is now considering some relaxation in its visa norms to attract more international tourists to the country. It can further intensify the competition between the two friendly Islamic neighbours including the KSA and the UAE in the near future.

6.2 Recommendations

Even though KSA is ready to become a vibrant tourist hub in the Middle East, there are certain important challenges that it is currently facing. It is important the KSA recognises these challenges and addresses them effectively. It is therefore, following recommendations are made that would help the KSA in realising its goal of becoming a tourist hub in the Middle East Regions and compete effectively with its neighbours. Accordingly, it has been observed that the KSA has made significant efforts and investment in improving the perception of the international tourists to the country. However, there still are some hurdles, which it needs to overcome in order to win the confidence of the international tourists. In this regard, international tourists usually have negative perceptions with regard to the security matter, human rights and rigid legal system, which often demotivate them from visiting the KSA. Hence, it is recommended to the KSA to focus on improving human rights and security as well as introduce reform in its legal system so that the international tourists feel confident in visiting the KSA. Moreover, it has been noted that the historical and cultural heritage of the KSA is well known around the world but there are several other tourist attractions such as rich biodiversity in and around the Red Sea, which is not known by the international tourists. Thus, it is recommended to the KSA to engage in aggressive marketing of such tourist destinations and regularly launch tourism campaigns to attract tourists to explore these lesser known tourist attractions. Since both, the KSA and the UAE have similar profiles and prepositions, both countries can be complementary in their tourism offerings. At present, the UAE is much ahead of the KSA with respect to the tourism offerings. Therefore, it is suggested to the KSA to learn lessons from the past experience and success of the UAE to shape its future path and journey of transforming itself from an oil based economy to tourism based economy. In addition, both the KSA and the UAE can collaborate with one another to provide travellers to the region with a unique opportunity to experience the rich history and culture of the region through the cities of Jeddah, Dubai and Abu Dhabi. The UAE and the KSA’s combined offerings will positively reinforce the value proposition of the region as an important cultural and tourism hub.

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