Tourism is being ranked a top priority for Saudi tourism officials. The Saudi government is investing heavily in its tourism sector, principally to provide employment opportunities for Saudi graduates.
According to a 2013 MENA tourism and hospitality report by research consultancy Aranca, investment in the travel and tourism sector is expected to increase at a CAGR (compound annual growth rate) of four percent to SR 30.9 billion over a 10-year period from 2013-23.
The number of tourists visiting KSA is estimated to increase at a CAGR of two percent to 21.3 million over the period 2013 – 23. Revenues will total SR60.9 billion by 2023 – due to an increase in number of Haj and Umrah tourists and growth of international shopping centres.
To cope with the increasing number of visitors, the Saudi government has outlined a plan to invest more than $30 billion in its airports by 2020, including $10 billion in private investment for the sector. More than $12.5 billion has already been earmarked for the country’s four main international airports in Jeddah, Riyadh, Dammam and Madinah.
Based on the expected growth of the region, the annual Arabian Travel Market (ATM) roadshow took off in Riyadh to deliver a presentation at the offices of the Saudi Commission for Tourism & Antiquities.
“The travel and tourism sector’s direct contribution to Saudi Arabian GDP is projected to increase at a CAGR of four percent to SR83.7 billion by 2023. Put that into perspective, it is equivalent to about nine percent of current Saudi GDP, which is a great achievement. This is solely as the Kingdom looks to diversify its economy away from hydrocarbon receipts,” said Mark Walsh, portfolio director, Reed Travel Exhibitions.
Riyadh is the final leg of the six Middle East destinations being visited by the ATM team during its roadshow which took in Bahrain, Kuwait, Beirut, Muscat and Dubai. A strong delegation from the Kingdom is expected at ATM. Led by the Saudi Commission for Tourism & Antiquities it includes, Saudia Airline, Umrah & Makarim Hospitality Group, Fursan Travel & Leisure, Hanco Rent a Car, EbreezTech, Rahhal International, and Unique Choice.
Meanwhile, Saudi Airlines Cargo will increase its belly capacity on new international routes beginning April 1 through Saudia Arabian Airlines’ new passenger flights to Manchester and Los Angeles.
The Manchester service will be operated by the airline’s B777-200 aircraft and will have a capacity of 9 tons from Riyadh/Jeddah and 12 tons into Riyadh/Jeddah, while the Los Angeles service will be operated by the B777-300 aircraft and will have a capacity of 6 tons from Riyadh/Jeddah and 8 tons into Riyadh/Jeddah. Both destinations will be served three times per week.
Source: Saudi Gazette – http://saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140220196352
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Sacha Orloff’s Team
By Yuval Atsmon, Max Magni, Lihua Li, Wenkan Liao – Published by McKinsey Quarterly
Most large consumer-facing companies realize that they will need China to power their growth in the next decade. But to keep pace, these companies will also need to understand the economic, societal, and demographic changes shaping the profiles of consumers and the way they spend. This is no easy task not only because of the fast pace of growth and subsequent changes in the Chinese way of life but also because of the vast economic and demographic differences across the country.
These differences are set to become more marked, with significant implications for companies that fail to grasp them. Since 2005, McKinsey has conducted annual consumer surveys in China, interviewing a total of more than 60,000 people in upward of 60 cities.1 Our surveys have tracked the growth of incomes, shifting patterns of expenditure, rising expectations—sometimes in line with those of the respondents’ Western counterparts and sometimes not—and the development of many different consumer segments. Those surveys now provide insights to help us focus on the future. We cannot, of course, predict it with certainty, and external shocks might confound any forecast. But our understanding of consumer trends to date, coupled with an analysis of the economic and demographic factors that will further shape them in the next decade, serve as a useful lens for contemplating the profile of the Chinese consumer in 2020.
Many of the changes taking place in China are common features of rapid industrialization: rising incomes, urban living, better education, postponed life stages, and greater mobility. Japan saw similar changes in the 1950s and 1960s, as did South Korea and Taiwan in the 1980s.
But some unique factors are also at work, such as the government’s one-child policy and the marked economic imbalances among regions. Our analysis reveals important insights into the likely demographic and socio-demographic profiles of Chinese consumers at the end of this decade.2
Changes in economic profiles have been and will continue to be the most important trend shaping the consumer landscape. The Chinese are certainly getting richer fast: the per-household disposable income3 of urban consumers will double between 2010 and 2020, from about $4,000 to about $8,000.4 That will be close to South Korea’s current standard of living but still a long way from its level in some developed countries, such as the United States (about $35,000) and Japan (about $26,000).
By Alexandra de Kerros Boudkov Orloff
Download full report: Saudi Arabian Retail Prospects – Sacha Orloff 2012
Published in MECSC – Middle East Council of Shopping Centres: http://www.mecsc.org/newsletter/nledt_view.php?id=345
Immense opportunities in the fast growing retail market in Saudi Arabia – its constraints and challenges.
The Middle East Retail Sector forecast for 2013 has identified Saudi Arabia and the UAE as the markets with the most potential and dynamic retail sectors in the region. These two markets have sustained their dominance within the retail landscape for more than a decade and will continue to do so in coming years. The presence of a large expatriate population and the majority of region’s retail investment being centred in these countries have helped to maintain the growth momentum.
The GCC retail industry is poised for a healthy growth and known to be one of the fastest growing sectors in the Middle East. It is the second largest sector in the oil-rich GCC region, and is considered to be the most favoured means of endorsing diversification and continual economic development in the area.
In general the Saudi retail sector is spread across malls that have mainly replaced the old markets and souks all over the Kingdom. Malls attract consumers to purchase in a more modern and stylish environment; enabling to build a consumer experience with both a social and entertainment purpose.
1.0 The Kingdom of Saudi Arabia economic landscape.
1.1 Total retail spending in KSA 2011
1.2 Total retail spending in UAE 2011.
1.3 Total retail spending at Dubai Duty Free.
1.4 Global GDP growth.
2.0 Global Trends.
2.1 Key Trends in the MENA retail market.
2.2 Trends in the Saudi real estate and retail market.
2.3 Riyadh, the future capital of the retail sector.
3.0 Key impacts on the retail market in KSA.
3.1 Cultural differentiations:
3.2 Religious tourism.
3.3 Saudi Retail Market Concentration.
3.4 Recruitment and customer service.
4.0 E-Commerce in KSA is the next growing trend.
5.1 Input and outcome analysis of KSA retail
Download full report: Saudi Arabian Retail Prospects – Sacha Orloff 2012
By Rachel Lamb
Luxury brands must incorporate video into their online marketing, using it on their Web sites, blogs and social media pages to entice consumers with visually appealing rich-media content.
Videos entice consumers to look around a Web site, leading them to spend more time there and bringing them closer to purchase. They also add value and aesthetics to a Web site and help a brand to convey its rich glamor, which could help to compete against other brands attempting to lure the same audience to their sites.
By Manoj Nair, Associate Editor Gulf
Dubai: Louis Vuitton, the luxury specialist, is taking a different approach in the Middle East, avoiding promotions and experimenting with different retail formats to engage shoppers.
The good thing about being around for 150 years and more is a brand can learn a few things about taking a downturn or few in its stride. The luxury label Louis Vuitton can definitely confirm that. “The recession has been really tough on some brands, but Louis Vuitton has been around for a long, long time,” said Damien Vernet, the luxury marquee’s general manager for the Middle East and Africa.
“While people become more conscious about what they buy, especially in luxury, they go back to the values that have been around for a long time. That’s when they see the real value of a brand.