Sustainable Tourism in focus in Saudi Arabia

Guided by Vision 2030, as part of its drive to diversify away from oil and gas and generate jobs for the younger and future generations, Saudi Arabia is looking to attract ever increasing numbers of visitors and tourists to the country over the next decade – over 100m visits by 2030.

Future Hospitality Investment Summit Saudi Arabia, recently took place in Riyadh focusing on sustainability, innovation, start-ups and human capital development in the Saudi market. In a Q&A with Tiana Amann, Head of ESG, Kerten Hospitality, Richard Williamson, COO, Considerate Group and Simon Wright, Founder & Chairman, TGP International, we get a glimpse of what this means to the Saudi Arabian economy, what needs to be done and how to get there.

Why is sustainable tourism a necessity for the sector and national economy?

Tiana Amann:  It allows the country to re-direct its focuses from oil and to diversify the economy in a sustainable direction; not just diversify the economy but the livelihoods of people living there. There is a re-direction of jobs, income etc. as there will be more options for the locals in terms of career opportunities for both men and women, locally and internationally living within Saudi. Sustainable tourism also allows for the local hand makers, home makers to grow themselves financially and business wise. A huge opportunity is that if tourism is focused locally – there is a lot of demand that will be needed from the hospitality businesses for products and supplies that can/should be coming from the local businesses/entrepreneurs within the Kingdom of Saudi Arabia.

The approach to tourism should be very carefully decided – there lies a great opportunity for tourism to be used in a way to further spread awareness on sustainability, and the cultural and natural resources that heavily lie throughout Saudi Arabia that should be continued to be protected/preserved.

Richard Williamson: Fortuitously, Saudi Arabia is in a unique place to build sustainability into its hospitality sector. With the scale of its development ambitions, be that NEOM, Red Sea or AlUla, the country can embed sustainability into this new build offering far more easily than countries with a larger established hospitality base. The country is in a competitively advantageous position when it comes to sustainability.

If this can all done in an honest and transparent way, to the highest possible standards, it will benefit all stakeholders and establish a sustainable tourism sector for the benefit of generations to come. Rightly, sustainability is one of the core pillars of Vision 2030.

Simon Wright: Everyone now understands the urgent and growing need to build all industries sustainably. However, the risk of sustainable tourism in its current form is that it is only adopted at the higher end of the market, leaving most of the industry unable to participate in the collective effort required. Our role is to facilitate education, funding and drive operational excellence to create financially sustainable hospitality businesses. The ultimate opportunity for Sustainable Hospitality is that with more financially sustainable businesses in the industry, there will be more resources to innovate solutions to sustainable challenges currently unresolved or understood.

How can we raise awareness of sustainable tourism in Saudi Arabia and the region?

Tiana:  We need to make sustainability approachable and understandable for all. We need to make sustainability approachable and RELEVANT to the culture and climate in the Kingdom. Everyone needs to understand the importance of sustainability and how it relates locally to Saudi Arabia and themselves. They also need to understand how they can further drive it – the actions that are needed, the goals we are trying to achieve and how their businesses, movements, and specific actions again that will reach those goals.

Richard: The region should make sustainability the norm, demonstrating that sustainability isn’t a compromise but an exciting future of discovery, place, culture and communities.

Saudi Arabia needs to do sustainable tourism with openness, bravery and integrity. Ensuring sustainability statements match reality and avoid greenwashing and the associated reputational risk. Being open and honest about your company or your hotel’s progress and backing it up with evidence demonstrates that you understand the challenges of sustainability and are committed as a firm to doing better.

Sustainable tourism success stories need to be celebrated through the press, social media and on websites – being vocal helps set expectations and builds consensus. Making strategies and objectives accessible to all is important for normalising sustainability, ensuring that targets and objectives can be found easily on hotel websites for example, and employees know where to find ESG policies.

What's the role of public, private, people, partnerships, in Policies and regulations?

Richard: 8 percent of the world’s emissions derive from the tourism industry. With this scale of challenge, a collective approach is required, with the public sector, private companies, employees, communities and customers all engaged. When each sees the benefits of engagement, real change can follow.

In the Kingdom, Vision 2030 and the Saudi Green Initiative are the guiding principles for sustainable development.

Simon: Significant - as identified by the UN SDG’s the aim is to inspire and inform greater private sector action to drive inclusive and sustainable prosperity. The public sector has the vision and funding available to change behaviour however the private sector has the experience and network to execute the ideas.

Green investments in Sustainable tourism. is Saudi Arabia ready to embrace that?

Tiana: Yes, definitely ready to embrace; however it is up to everyone to pool together resources and knowledge to make that happen! The buying power is there, influence is also there, however we need to all decide together what are we embracing and investing in. It must be relevant to Saudi and should be aimed at including and investing in the local public & businesses to drive green agendas, to provide the innovative ideas and businesses needed on ground to fully push sustainability. Green investments will go a long way if it is invested locally – the locals need to be empowered with sustainability – to understand and embrace it.

Richard:  The market for green bonds and other sources of green financing is expanding. Green investment includes project financing for green buildings (particularly in energy efficiency), water management, waste management, energy-efficiency transition, biodiversity and cultural heritage.

So far, the Kingdom’s tourism has been largely funded by the Public Investment Fund (PIF). However, there is a need to identify co-investment and new sources of finance. Green finance will be part of this spectrum of funding.

In Saudi Arabia, today, green financing remains at an early-stage, but the public sector can promote access to green finance to close the investment gap through grants and green loans with specific environmental criteria, as well as risk-sharing mechanisms to foster private sector participation in the financing of sustainable tourism development. The Tourism Development Fund (TDF) is expected to be the principal channel for green funding and the catalyst for investment in the Kingdom’s tourism sector in line with long-term sustainability.

Simon: Saudi Arabia has shown the world how to embrace and enact change, there is no reason why it could not demonstrate the same ambitious leadership with green investments. The Kingdom’s approach to development and growth initiatives have been on a significantly longer trajectory to many comparable projects globally, which is closely aligned with the ideation of green investing and so arguably already embracing it.

From our interaction with the Kingdom our view is that it is a leading global example of this approach to development and employing some of the most interesting approaches to public private sector partnerships; like the Tourism Development Fund and Cultural Development Fund.