Saudi Arabia: a bold vision for hospitality development

A series of real estate -based giga and megaprojects providing not only hospitality development but new mixed-use developments, housing neighbourhoods and infrastructure, are being accelerated under the Kingdom’s broad-ranging Vision 2030 strategy.

The objective is to reduce Saudi Arabia’s historic dependence on oil, diversify its economy, and improve the lifestyles and opportunities for its citizens to 2030 and beyond.

One route to economic diversity is domestic and international tourism and the Kingdom has, since 2019, opened its doors to visitors by issuing tourist visas and making substantial investments in resorts, hotels, attractions and the airports to support access.

This investment is intended to raise the contribution of the tourism sector to the Kingdom’s gross domestic product to more than 10 percent, creating one million additional jobs and attracting 100 million annual domestic and international visits a year by 2030.

At the same time, the Kingdom is promoting a sustainable approach to hospitality development and tourism, which aligns with its pledge to achieve net zero by 2060.

What Vision 2030 means for hospitality

The scale of Vision 2030’s ambition is unprecedented, with hospitality-related gigaprojects including the Red Sea Project, an eco-tourism development encompassing an archipelago of more than 90 islands, which is adjacent to another planned tourist destination at Amaala.

Qiddiya is intended to become the Kingdom’s capital of entertainment sports and the arts, while plans for the Asir region will capitalise on its mountain landscape.

The town of Diriyah, with its UNESCO heritage site, will grow its focus on history, and the ancient city of AlUla is planned to become the world’s largest living museum and a major heritage, cultural, arts, and adventure tourism destination.

Hospitality and leisure amenities are also scheduled for other gigaprojects like Neom, a new city promoting entrepreneurship, and are being threaded through existing cities like Riyadh, where a green megaproject is seeking to increase green space through adding 7.5 million trees.

Many of these projects are yet to get underway, but construction is in progress on several sites including the Red Sea Project, where extensive research and activity has helped to enhance the marine environment.

A new airport is set to open later this year and delivery of a new village is on the way to accommodate the 14,000 staff who will operate the hotels and amenities.

Global hotel brands have signed up to operate resorts in the first phase – including Grand Hyatt, part of Hyatt Hotels Corporation, Marriot International and Jumeirah Hotels & Resorts – which is an indication of the hospitality sector’s enthusiasm and commitment to the Kingdom’s aspirations

Delivering best practice on a giga scale

The gigaprojects are being delivered concurrently and have initial delivery dates that are now just a few years away. Global best practice is playing its part in helping to bring forward major programmes, with the right project teams, procurement practice, project controls and commercial management being put into place to drive delivery to the objectives of Vision 2030.

A number of projects are set to deliver landmark developments with designs by top international architects. Design competitions are helping to attract global architectural talent, supported by cost advice to ensure vision and creativity are aligned.

Several projects are expected to offer extraordinary hospitality experiences, such as the overwater villas planned for the Red Sea Development, and a hotel design set into a mountain in the Sharaan Nature Reserve in AlUla, designed by architect Jean Nouvel. Such innovative and high-quality projects will present their own challenges in delivery.

The creation of new cities and neighbourhoods is also presenting opportunities to build in latest thinking on future living from the outset, particularly around sustainability and digital innovation.

Gigaprojects are adopting circular economy principles, promoting the concept of regenerative sustainability in construction, so that they enhance the environment. Resorts may incorporate smart destination management systems to manage visitor movement and help limit negative environmental impacts from over-tourism.

Securing skills and expertise

Globally, the construction industry is facing significant skills shortages as development activity bounces back after the pandemic slowdown.

The gigaprojects’ scale and accelerated programmes make significant demands on skills and supply chains, with the Red Sea Project alone expected to require 10,000 construction workers as work progresses. This makes it imperative that supply chains are closely monitored across programmes.

Saudi Arabia’s 'Saudisation' programme must be taken into consideration, as it promotes the use of local workers and targets for the procurement of local materials and vendors.

While the Kingdom has significant manufacturing capability for products ranging from sanitary ware to mechanical and electrical plant, challenges remain in the capabilities of some local contractors.

This is especially true for demanding ultra-luxury hospitality developments where companies may not have had the opportunity to gain relevant experience or know-how.

As well as exploring innovative ways of living, the Kingdom is promoting design for manufacture and assembly (DfMA) in construction, with the aim of leading the way in the adoption of modular approaches in the east.

Bathroom pods and other standardised elements could enable greater controls over design and installation quality in hospitality developments, as well as minimising waste. There are challenges in making a significant shift to DfMA, but the supply chain has an opportunity to grow as it develops in-house capability.

A blueprint for the future

These projects have the potential to drive skills development, employment and manufacturing capability, enabling SMEs to become larger businesses and driving a step change in Saudi Arabia’s broader construction industry.

In this way, construction will help to continue the social reform that has brought about transformational change in Saudi Arabia over the past five years.

Many of the resorts, hotels, museums, sports venues, parks and other amenities planned for the Kingdom are pushing the boundaries of what’s possible in global hospitality. It will set a blueprint for the future in their promotion of regenerative tourism.

In their scale, and combination of modern architecture, advanced technology and sustainable construction, the giga and megaprojects of Vision 2030 present unique opportunities.