Going places

Going places
The Burj Al Arab: the worldÕs tallest hotel, in Dubai, UAE

The GCC governments are taking an ever-increasing interest in tourism, realising that it can make an important contribution to gross domestic product (GDP), foreign exchange earnings and even local employment, as well as reducing reliance on oil revenues.

Saudi Arabia

Perhaps the key development over the past year was the creation of the Saudi Higher Tourism Commission (HCT). Under the leadership of its secretary general, Prince Sultan bin Salman, the HCT has already appointed a British consulting firm to conduct an 18-month feasibility study of the country's tourism sector, beginning with an index of its many attractions, which are still largely unknown to the outside world.

Saudi Arabia has long been the Gulf's leading tourist destination, if religious tourism (Haj and Umrah pilgrimages to Makkah and Madinah) is taken into account, with 3.5 million tourists recorded by the World Tourism Organisation in 1996. Latest estimates put the total for religious and secular visitors to the Kingdom at over 8 million. Leisure tourism was, until recently, confined to domestic markets, and foreign leisure visitors were simply not welcome. Even foreign pilgrims were strictly prevented from doing anything other than going to the Holy Cities and returning home.

However, the authorities realised that Saudis were spending huge sums on overseas holidays - amounting to an estimated $8.26 billion last year - and that if even a fraction of this were spent by the Kingdom's 21.4 million population domestically, the economy would gain significant benefits.

In the last decade, major investments have therefore been made in Saudi domestic tourism infrastructure. Many of these are in the grey areas between tourist, business and residential accommodation, and tourist and civic recreational provision. Notable achievements include the development of more than 50 theme parks nation-wide, the new world-class Al Faisaliah, and planned Four Seasons, tower hotels in Riyadh, and the multiple new mountain resorts of Prince Khaled Al-Faisal's Syahya company in the Asir. This verdant southern region alone attracts an estimated 2 million visitors a year and has just launched a nine-week summer festival.

The Jeddah 2000 Summer Festival took place in June and July. It is also claimed to have brought in 2 million visitors, on the strength of the city's multiple amusement parks, shopping malls, beach clubs in North Obhur, and the giant Durrat Al Arus and Buhairat City residential resorts. Smaller resorts of this type have also sprung up in Half Moon Bay near Al Khobar, where wealthy Saudis can buy or lease villas at exclusive beach compounds in which the Kingdom's typically rigid behavioural codes are temporarily relaxed. The trend is now being extended to the cool summer refuge of Taif, where the Thamir Group is planning three resort village projects.

1998 was a watershed year, when the UK specialist tour operator Bales Worldwide was allowed to bring the first escorted tourist groups to Saudi Arabia. Working in conjunction with Saudi Arabian Airlines, the company has now introduced the Kingdom's splendours to several hundred tourists. Its 10-day Saudi package features highlights such as staying at a hotel in Madinah, visiting the Nabatean rock tombs at nearby Medain Saleh, and riding a cable car to meet friendly villagers in Wadi Thama, Asir. The British Museum is also organising tours now.

These discrete pilot projects have been deemed an official success, as reflected by the most recent changes in the Saudi tourist sector. Umrah pilgrims were recently allowed to stay on in the Kingdom for leisure purposes, and this rule will soon be extended to create a tourist visa open to all foreign visitors. In all cases, foreign holiday-makers will be escorted by Saudi agents from start to finish.

There has been a lot of speculation about Saudi Arabia's new Foreign Investment Regulation, approved by Royal Decree and endorsed by the Council of Ministers in April this year. One of the main changes that the raft of new laws will introduce is 100 per cent foreign ownership of some businesses and types of property, instead of just a 49 per cent stake. The big question is which industrial sectors will be excluded from this free market strategy (as commercial agencies are now), and which will be actively encouraged by it.

With the government's new enthusiasm for tourism, this relatively young sector may well be opened up to full participation by foreign companies.

In tandem with the establishment of the HCT, Saudi businessmen have also been invited to participate in the tourism-focused Saudi Company for Trade and Resources, which has an initial paid-up capital of $2.66 million, and organised this year's Abha Shopping Festival.

In light of this rapid tourism development, it seems highly unlikely that the new Saudi investment laws will stand in the way of increased foreign investment in tourism. One of the key prizes will be Saudi Arabian Airlines, which is earmarked for privatisation at the same time as it re-equips with 61 new Boeing and McDonnell-Douglas aircraft. The Kingdom's thriving hotel sector, with 425 properties, is also likely to prove attractive to investors. The Kingdom's largely undeveloped inbound leisure tourism infrastructure perhaps offers perhaps the best opportunities. Since the new visa rules were introduced, 10 new travel and tourism companies worth more than $80 million have been established.


The UAE has also been changing its rules regarding property investment, with Dubai's Emaar Properties offering villas and apartments on 99-year leases, and several other companies in Sharjah and Ras Al Khaimah now following suit. The introduction of a 10-year visa for property investors has been widely rumoured. Industry observers believe that such opportunities for

residential investors at developments like the Dubai Marina and Emirates Hills will have a beneficial effect on the tourism sector as a whole.

In terms of tourism promotion, the marked success of the Dubai Department of Tourism and Commerce Marketing (DTCM) has spawned similar bodies in Sharjah (Sharjah Commerce and Tourism Development Authority - SCTDA) and Fujairah (the Fujairah Tourism Bureau - FTB), which are now giving significant impetus to tourism development in these two emirates.

However, Dubai's lead is such that this one city is far better known in international tourism circles than the country of which it forms a part. It is significant that the government of Oman recently established a joint Oman-UAE tourist visa with its counterpart in Dubai, rather than with any UAE federal tourism body - because there is none.

In tacit recognition of such problems, Abu Dhabi recently issued a decree establishing a Dh300 million ($81.6 million) National Tourism Board or Authority with the ability to set up branches throughout the country and outside. Shares will be offered in the company to UAE nationals, and the additional capital raised will be used to promote tourism through the creation of shopping, leisure and other tourist facilities. It remains to be seen whether the focus will be only on Abu Dhabi, or, as many hope, fostering the shared tourism ambitions of all seven emirates.

The UAE is also the Gulf leader in terms of tourism festivals, with shopping or cultural festivals now taking place in Dubai, Sharjah, Ajman and Al Ain.

In Dubai, the Department of Tourism and Commerce Marketing (DTCM) has finally implemented its new hotel classification system. Based on international best practice and strict specification criteria, the new star ratings have caused a quiet revolution in the local industry. Year-end 1999 hotel listings contained 254 hotels with 18,638 rooms. The August 2000 data refer to 165 hotels with 17,290 rooms. The remaining 89 properties - guest houses and pensions averaging 15 rooms a piece - are euphemistically referred to as being 'listed'. The split of the erstwhile Group 1 category into five- and four-star categories has seen some of the mighty falling. One of Dubai's best-loved luxury hotels is hotly contesting its downgrade to three stars, while the city has become the first in the Gulf to possess a tier of three-star branded hotels - the Howard Johnson, Comfort Inn and Quality Inn Horizon.

Many admire the DTCM's courage in applying these more stringent standards to Dubai's hotels and 59 'hotel apartment' buildings (with 4,646 letting units), despite an apparent drop in total accommodation capacity - especially given the regional obsession with superlative, ever-increasing statistics.

On the UAE's picturesque but little-known east coast, the local Fujairah Tourism Bureau has been pushing since 1995 to establish a riviera of resort hotels on its exotic beachline - and spent a claimed $136 million on new infrastructure in the process. There are now three new hotels under construction in the diminutive emirate, by Emirates airline, which is building a 200-room high-rise Le Meridien luxury property to open this year, Rotana (200 rooms, 2002), and Abu Dhabi National Hotels, to be operated by the Belgian company Three Corners (152 rooms in traditional style, 2001). Germany's TUI Group of Hotels is planning to build three at Al Aqqah, 35 km north of Fujairah, with the first, four-star property opening in 2003.

Fujairah has been a traditional weekend getaway for local expatriates, but hotel companies have now recognised its similarity with Egypt's Sinai coast. Industry observers speculate whether Fujairah's new resorts can aim directly and solely at the mass tourism markets to which Egypt appeals, which would be a first for the Gulf region.

Cruising is a growing niche tourism market in the Gulf, with Mediterranean-based cruise ships finding it an increasingly attractive location for the winter season, as an exotic alternative to the Caribbean. Dubai, predictably, has set itself up as the embarkation/disembarkation hub for the region.

The city's new cruise line terminal has opened, the official opening marked by a visit from the QEII. However, industry observers point out that Dubai's promotion of the cruise ship industry will benefit all ports in the region, as most cruises are by definition, multi-destination tours.

The greater region of Red Sea, East and Southeast Africa, Indian Ocean islands, Arabian Peninsula/Gulf and West Coast India hosted 221 cruises on 39 vessels with nearly 77,600 passengers in 1999 - less than 1 per cent of the world passenger total. The growth in Gulf cruise tourism has been one of the key factors behind recent calls for a single GCC visa.

Other GCC countries

In Oman, cruise ships already pay regular calls to the ports of Muscat, Salalah and Khasab (where a cruise terminal is now planned), and according to press reports, the Sultanate received more than 70 calls in 2000, making it the leading cruise destination in the GCC.

Following the growing success of both its Muscat and Salalah (Khareef) festivals, (the former attracted more than 1.6 million domestic and regional visitors last year), tourism has been afforded special status in Oman's sixth five-year development plan. The Ministry of National Economy is conducting a year-long survey of all tourists entering the country, as a basis for future tourism policy. Seeb and Salalah airports are now due for privatisation and the Omani government has now stepped up its tourism promotions in Europe, through appointment of a Swiss agency. Pundits await news of the planned scope of the ambitious Al Sawadi tourist village, north of Muscat, following a feasibility study.

A boost to southern tourism in Oman was the recent recognition of five heritage sites in Dhofar which formed links in the ancient frankincense route, by the United Nations Educational, Social and Cultural Organisation (Unesco).

Bahrain, which finally jumped on the festival bandwagon with its Bahrain Festival 2001, has also taken significant steps to increase its already important tourist visitor numbers. These include implementing an 'open skies' policy for all GCC airlines, and teaming up with Jordan to promote the two countries as a joint destination for European tourists. The Dallah Al Baraka Group's vast Durrat Al Bahrain residential resort looks set to transform the south of Bahrain over the coming decade.

Another major boost to Bahraini tourism came recently in the verdict by the International Court of Justice in the Hague that Hawar Islands, disputed by Qatar, is now officially part of Bahrain. Following the completion of the Baisan Hotels Group's new Aqua Leisure Land there, Hawar is now earmarked not only for further tourism developments, but also offshore oil prospecting.

Qatar continues to attract interest as a hotel development location, with the new Inter.Continental, Ritz-Carlton and Holiday Inn properties adding 778 rooms to the existing stock of 1,476. Qatar National Hotels Company, owner of the Sheraton, Marriott and Ritz-Carlton hotels, has recently presented six 'tourism investment opportunities' to the public, following a detailed series of feasibility studies by TRI Hospitality Consulting. The property investments include three hotels, as well as projects to expand and upgrade facilities at the existing Aladdin's Kingdom, Bida Park and Palm Tree Island visitor attractions.

With its own growing annual Doha festival, a newly established General Corporation for Tourism, a planned airport expansion, and the prospect of building major new sports and accommodation facilities in anticipation of hosting the 2006 Asian Games, Qatar looks well set to capture its fair share of Gulf tourism.

Kuwait's Hala February festival, orchestrated by the Kuwait Tourism Services Company, is estimated to have attracted over 150,000 visitors this year, introducing a new element of leisure tourism that was previously lacking in the country. This and the planned opening of new northern oil fields have given confidence to the promoters of new Hilton (232 rooms) and Safir Palace (120 rooms) hotels opening this year.