Saudi Arabia’s Tourist Visa and its Impact on Hotel Market

Running Head: Saudi Arabia’s Tourist Visa and its Impact on Hotel Market
New Tourist Visa and Its Impact on Hotel
Industry in Saudi Arabia
Literature Review
System04104
9/15/2019

Saudi Arabia’s Tourist Visa and its Impact on Hotel Market
1
Literature Review
Saudi Arabia has launched a new special “event” visas for the tourists and the major
intention behind this is to promote tourism in the country. The government of Saudi Arabia
want to promote Saudi Arabia as a global entertainment destination in the world. The new
visa of the country allows the visitors to choose from various sporting, tourism, adventures
activities, and business attractions available in the country (Hvidt, 2019). The government is
very serious about this new type of visa, which offers variety of purposes for the tourists or
visitors to visit in Saudi Arabia and the country also advised the embassies to issue new visa
to visitors within the 24 hours of receiving a request for the visa. However, the approach of
Saudi Arabia government will help the tourism industry to grow and develop in the country
and it has major impact on the hotel industry. The hotel industry has various great advantages
of this new type of tourist visa of Saudi Arabia for the people. Saudi Arabia is investing
billions of dollars in entertainment and tourism industry, which is the part of Saudi Arabia’s
vision 2030 announced by Crown Prince Mohammed Bin Salman. However, the main
intention behind issuing this new type of tourist visa is to increase the employment situation
in the country for the Saudi young people and attract people to enhance the domestic tourism.
This is the part of the marketing vision of Saudi Arabia 2030 (Khashan, 2017). However, the
strategy of Saudi Arabia to attract people in the country will be helpful in the growth and
development of hotel industry because the number of visitors stay in the hotels that will
further increase the revenue of the country from the tourism and hospitality industry.
The CEO and President of ‘The World Travel and Tourism Council (WTCC) David
Scowsill said that the government must focuses on the visa policy to ensure the growth and
investment in the tourism industry that can play a crucial role in the economic reforms or
diversification in the Saudi Arabia. In the reaction of this statement, after very few months
the Kingdom of Saudi Arabia Mohammad Ben Salman ordered the government to launch a
new visa policy that attract the people towards the beauty of Saudi Arabia and develop the
country as the global destination place for the tourists (Export. Gov, 2018). However, the aim
of this visa policy is to ensure the expected growth and development in the economy, so the
economic vision 2030 will be achieved in the significant manner with the aim to reduce the
dependency on oil export revenues and diversified the economy of the country (Khan, 2016).
It is really important to know the main intention of Saudi Arabia to launch such type of
tourist visa for the people because the government want to invite tourists, businesspersons,

Saudi Arabia’s Tourist Visa and its Impact on Hotel Market
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investors, and sports lovers to visit in the country that will later increase the income of the
country by collecting revenue from their spending. The kingdom of Saudi Arabia Mohammed
Bin Salman said about the relevance of this visa in the growth and development of the
country that the presence of the country in various nations attracts large number of people to
visit in the country (Moser, Swain, & Alkhabbaz, 2015). The strong global presence of the
country can help the Saudi Arabia to promote its tourism sector and contribute in the
marketing vision 2030 of Saudi Arabia. However, for the development and growth of the
tourism sector, the Saudi government increased its tourism investment funds from $8 billion
to $46 billion in the next four years after 2017 decision of launching new visa schemes
(Writer, 2018).
In last few months duration, it has been seen that there is a dramatic growth in the
business performance of hotel industry in the Saudi Arabia hotel and hospitality industry. The
increasing demand of tourists and visitors in the country enhance the profitability of business
of hotel industries. According to a report, there is a growth of 13% in the booking of hotel
rooms since 2017 and more than 48000 extra room constructed by the hotels for fulfil the
exceeding demand of new visitors in the country (Hussain, 2017). However, the hotel
industry in Saudi Arabia has registered huge growth in the hotel industry because of these
three pools that drive the demand of hotel rooms: leisure, pilgrims, and corporate visitors.
The travel and tourism industry in Saudi Arabia is accountable for the 9.4% of Saudi Arabia
GDP and it has contributed more than $14.8 billion in the country’s total GDP (Writer, 2018).
According to the Savills, the annual growth in demand of hotel rooms enhances the
expenditure of tourist people up to 10.5% in the hotel industry (Bridge, 2019). However, the
strategy of Saudi Arabia to diversify its economy in various sector except than oil import in
align with the vision 2030 plans, the company expect to an increment in the international
arrivals in the country up to 4% per year (Export. Gov, 2018). Apart from this, the country
also expects that the number of tourist will be reach up to 22.1 million by 2025 and 30
million by 2030 (Bridge, 2019). The major reason behind all this strategy that Saudi Arabia
want to diversified its economy and want to a boost in its economy and in GDP growth rate.
The increasing number of hotel obviously will increase the opportunities for new
employment in the hospitality in industry and this will lead to employment generation for the
youths in the country. The major hotels of Saudi Arabia are driving constructions in the
hotels as they target to meet the demand of hotels after this new visa policy of the country.
The increasing number of domestic tourists and international visitors drive the opportunities

Saudi Arabia’s Tourist Visa and its Impact on Hotel Market
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for the hotel industry to grow and enhance their profits by providing best services to the
people who visit in the country for the various purposes (Heialy. 2016). However, it is really
beneficial for the hospitality and tourism industry to increase its profitability after matching
the demand of new tourists and visitors in the country. However, the new visa policy of the
country motivates the both private and public organisation to invest in construction of hotels
and other facilities for the tourists and it will really enhance the employment opportunities for
the young generation in the country. However, the government of Saudi Arabia also helps the
tourism industry and investors to meet this surge in the demand of hotel rooms and other
services for the visitors and domestic tourists. The Kingdom of the country has planned to
invest more than $64 billion in the next decade to promote the culture, entertainment, and
tourism industry projects in the country (Bridge, 2019). The government hopes that the
strategy of launching new visa for various events where people will have choice to visit in
Saudi Arabia for special purpose will definitely boost the tourism and hospitality sector. It
will further provide a diversified economy to the country in the next decade 2030 (Heialy,
2016). However, these steps of Saudi Arabia definitely boost the demand of hotels and force
the hotel industry to meet the increased demand of hotels in the country and enhance their
profitability and business performance by adding additional values and services in the
hospitality industry.
Marriott Hotels in Saudi Arabia
Marriot hotel is the famous hotel group of USA and its Headquarter based in the
Bethesda. The Marriott hotel is the part of Marriott International Inc., which operates its
business in more than 6500 properties and 30 leading hotel brands in 127 countries and
territories. Marriott hotel, which is one of the brand names in the hotel industry, has opened
two aloft hotels in the country (Aina, Wafer, Ahmed, & Alshuwaikhat, 2019). The Marriott
hotel focuses on the investment in the Saudi Arabia after the new launch of visa. The Marriott
hotel opens its two aloft hotel in the country in Riyadh and Dhahran. Apart from this, its
competitors also invested money in the Saudi Arabia after watching the opportunities for a
huge increment in the future in the tourism and hospitality industry in Saudi Arabia. A big
competitor of Marriott hotel is Hilton Hotel opened three new hotels in the country after the
decision of Saudi Kingdom. Apart from this, Swiss-Belhotel International Opened three
hotels, Rocco Forte Hotels opened to new Assila Hotel in Jedah in 2018 (Henderson, 2017).
It means the launch of new visa by the Saudi Arabia for the domestic and international