With Saudi Arabia’s flagship Red Sea tourism project securing $3.8bn in green financing, various governments in the Gulf region are looking to new, alternative tourism models to drive the coronavirus recoveries in this important sector, with an emphasis on ecological options and staycations.
Both in order to reboot its tourism industry and as part of its drive to diversify the economy away from hydrocarbons, Saudi Arabia is developing several major ecological tourism projects.
In April the Red Sea Development Company – which is owned by the Kingdom’s Public Investment Fund – announced that it had raised $3.8bn for the Red Sea Project through the first ever riyal-denominated green finance credit facility.
The project is being built on a 28,000-sq-km site that contains 90 islands. It is set to welcome its first visitors in 2022, and when it is fully operational in 2030 it will feature 50 hotels, a luxury marina and a range of entertainment and leisure facilities.
The site’s entire transport network, including a new airport, will be powered by renewable energy.
Four banks in Saudi Arabia – Banque Saudi Fransi, Riyad Bank, Saudi British Bank and Saudi National Bank – contributed to funding the construction of the project, while HSBC acted as green loan coordinator.
Alternative tourism on the rise
The Gulf region as a whole is increasingly embracing innovative, sustainable approaches to tourism.
“The demand for local, greener and eco-friendly tourism has grown exponentially, in both Europe and the GCC,” Chirag Kanabar, managing director of Pine Wood Building Materials Trading, a company focussed on eco-friendly and sustainable modular construction, told OBG. “This is in line with pandemic-related preferences for increased social distance and privacy.”
The UAE, for example, has seen a significant uptick in “glamping”, a phenomenon whereby tourists can enjoy the experience of camping while having access to facilities that are more luxurious than those available on traditional campsites.
Glamping is part of a broader shift towards the so-called staycation model. With flights grounded and borders closed as a result of Covid-19, last year many people around the world took their holidays within their home country. This year, even though vaccine programmes are being rolled out and borders gradually reopened worldwide, international tourism is expected to recover slowly, and “staycationing” is leading the way.
Back in 2018 market research company Aritzon predicted that the global glamping industry would reach revenues of approximately $1bn by 2023, growing at a compound annual growth rate (CAGR) of 6% throughout the period.
However, it would seem that the coronavirus pandemic has served to accelerate the sector’s growth. According to a report published in March this year by Grand View Research, global glamping will be worth $5.4bn by 2028, thanks to a CAGR of 14.1% between 2021 and 2028.
The UAE is particularly well placed to leverage this trend, with its range of naural landscapes close to urban centres offering varied cultural attractions.
One flagship project is Sharjah’s Kingfisher Retreat, a tented hotel in the Middle East, which won the 2020 Luxury Beach Retreat in the Middle East prize at the World Luxury Hotel Awards.
“This is tangible proof that the emirate’s ecotourism model, based on environmentally friendly structures, is working, so the government is seeking to expand it to other locations within its territory,” David Patrick Court, a consultant at Bushtec Creations, a luxury tent manufacturer for resorts and glamping providers, told OBG.
Meanwhile, the recently announced Dubai 2040 Urban Master Plan puts a strong emphasis on sustainability.
In a significant move, Glampitect – a leading British eco-resort design consultancy – in March announced it was opening a site in Dubai.
Elsewhere, at the Arabian Travel Market 2021 – held at the Dubai World Trade Centre from 16-19 May – the Ras Al Khaimah Tourism Development Authority (RAKTDA) announced over 20 sustainable tourism development initiatives across the emirate.
As well as glamping sites, these will include eco-hotels and experiential offerings.
“The GCC region excels at providing opportunities for experiential travel, given its rich history and culture. A possible way forward for the region to fully capitalise on this might be for individual countries and emirates to coordinate among themselves in an approach similar to that taken by South-east Asian nations, whereby each one can specialise in their distinctive value proposition,” Tommy Lai, CEO of the Gulf-based GHM Hotels, told OBG.
“For the region, it is important to promote the idea that ecotourism is multifaceted, and not only associated with rainforests and tropical settings. The multifaceted potential of ecotourism can be developed on the basis of the unique habitats in the GCC, including its deserts,” Lai added.
Echoing these sentiments, Sanjiv Malhotra, executive vice-president of Shaza Hotels, told OBG that, “in the UAE, every emirate offers a distinct experience. Sharjah has decisively focused on positioning itself as a capital of heritage and culture, building on an identity tied to education. It also bets on its natural assets, from its Gulf coast to Khorfakkan.”
New trends in the industry
RAKTDA said that its plan reflects Ras Al Khaimah’s new destination strategy, which is focused on nature, leisure, adventure, accessibility and authenticity.
These focuses broadly correspond to six key trends identified by Euronews Travel in a recent report on the post-2020 future of tourism, namely: wilderness tourism, ecotourism, nomadic tourism, wellness tourism, authentic tourism and mindful tourism.
Nomadic tourism, or “long stay travel”, corresponds to the significant growth in digital nomads. Such travellers relocate for longer periods and, while they spend less on a daily basis, it is possible to capture substantial value from their presence.
While many emerging economies are scrambling to position themselves as digital nomad hubs, Dubai is already an established leader in the field.
Given its strong ICT infrastructure and healthy start-up scene, Dubai is an attractive option for digital nomads, with officials marketing the emirate as a place where people can live and work by the beach.
In short, from ecotourism and glamping, to staycations and digital nomads, the Gulf region is at the cutting edge of the latest developments in tourism, providing a recovery model which other regions should be able to build on going forwards.