Saudi Arabia and banks sign deal on $43bn worth tourism projects

26th October 2020 (Last Updated October 27th, 2020 05:12)

Saudi Arabia and banks sign deal on $43bn worth tourism projects

Saudi Arabia and banks sign deal on $43bn worth tourism projects
Saudi Arabia’s Tourism Development Fund, Riyadh Bank and Banque Sandi Fransi have signed a deal to finance up to SAR160bn ($43bn) on tourism projects. Credit: smarko from Pixabay.

Saudi Arabia’s hospitality firms are expected to benefit from huge investments into hotel rooms, infrastructure as well as construction.

Late last month, Saudi Arabia’s Tourism Development Fund, Riyadh Bank and Banque Sandi Fransi have signed a deal to finance about SAR160bn ($43bn) worth of tourism projects within the country.

The fund has been started with an initial investment of $4bn. It is part of plans to diversify the country’s economy that align with Saudi Crown Prince and Chairman of the Council of Economic and Development Affairs Mohammad bin Salman’s ambitious ‘Vision 2030’.

It is intended to generate investment across tourism in collaboration with private and investment banks.

Hospitality companies are ‘riding high on the tourism fund pack’ already, said news agency Arabian Industry citing a report from JLL published last week.

JLL stated: “While the hospitality industry remains challenged in the short term, in the long-term, however, and in light of the Tourism Development Fund agreement, construction activity in the sector will speed up as the kingdom strives to boost infrastructure, and increase the number of hotel rooms in line with Vision 2030.”

According to JLL, Riyadh saw the delivery of 400 keys, bringing the total hotel stock to 16,000 during the Q3-2020.

Meanwhile, Jeddah’s occupancy rates dropped to 38%, while average daily room rates (ADR) and revenue per available room’s (RevPar) were down by 33% and 62%, to register $181 and $61 respectively.