Why regeneration more than sustainability underpins key Saudi giga-projects

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My Saudi sojourn is nearly over. After eight days in Riyadh, I’ve opened an Interim Moodie Davitt Bureau at King Khalid International Airport Terminal 1 while I await my flight to Dubai.

Sustained by a tall Latte and turkey and cheese croissant from the Starbucks adjacent to my gate, I’m putting in an early morning shift, having just walked the Riyadh Aelia Duty Free store. Positioned immediately post-security, it offers two routes through – one embracing beauty (mainly fragrance) and fashion accessories; the other featuring tobacco; food & confectionery; destination merchandise; and travel essentials.

As you’d expect, the offer involves plenty of accessibly priced products targeted at returning overseas workers bound for India, Pakistan, Bangladesh, the Philippines and elsewhere. Equally, and reflecting a very different Saudi passenger profile, there’s a Gucci Beauty boutique and premium fragrances from Chanel, Cartier, Dior, Givenchy, Hermès, Tom Ford, YSL and others.

This week I had the pleasure of meeting up after many years with the remarkable Jacqui Davies, Commercial & Business Development Director at Lagardère Travel Retail. I don’t say ‘remarkable’ lightly.

Jacqui, a fellow Kiwi, has been through much in life. She has an indomitable spirit, one forged through both her own determination and freewheeling character and the challenges that life has thrown at her. Every now and again in this world – and in our industry – you bump into someone and have a conversation that makes you reflect on everything that you do and that you stand for. This was such an occasion.

We talked a bit of business, of course, too. Jacqui is proving that a woman can succeed in what is perceived by most outside the Kingdom as a man’s world. Conversely, she finds being a woman no barrier at all; in fact she reckons it helps get things done.

Despite the frustrations of working in awkward spaces in both Terminals 1 and 2 at King Khalid International Airport, Lagardère Travel Retail (trading as Riyadh Aelia Duty Free) is turning in some astounding numbers with sales racing ahead of 2019 levels – up +66% in March and even with an unfavourable Ramadan comparison, ahead +22% in April.

Saudi Arabia is fragrances territory, Jacqui points out, borne of the fact that Saudis grow up with local scents as integral to their daily lives. With tourism set to boom as the country’s overarching Vision 2030 plays out to startling effect – visitor arrivals are set to triple by that year – travel retail will soar, she says, especially with such heavy investment being poured into the airports. To spend time in Saudi Arabia is to see a country transforming almost before your eyes, Jacqui told me.

More of that in a few weeks in the first edition of our new Saudi Travel & Tourism Ecosystem Report, which I’ve been here to research. That ecosystem was the subject of this week’s superb Future Hospitality Summit in Riyadh, one of the best events I have attended in many a year. Speaker after speaker, from both the government and private sectors, outlined how the stars are aligning over the Kingdom’s tourism and hospitality sectors.

Giga-projects with ‘regenerative’ rather than merely sustainable principles at their heart; a new, second national carrier operating out of Riyadh; international hotels opening with astounding regularity; whole swathes of previously almost unknown natural wonders being opened to (measured) tourism for the first time; and so very much more.

Can the execution match the vision? Certainly it won’t fail for lack of will – or funding. I had an excellent interview with Khalil Lamrabet, CEO and Board Member of the 

“Saudi Arabia has a very, very rich heritage and culture,” Khalil told me. “There is a lot to see. It is untapped. And people are intrigued. I guess that after COVID people are wanting to discover new and exotic places [that are being developed] in a sustainable way. We do have that and I believe it is one of our main strengths in the Kingdom.”

I also got the chance to catch up with John Pagano, the dynamic CEO of the Red Sea Development Company & AMAALA (soon to be integrated as Red Sea Global). The former is dubbed, “The world’s most ambitious regenerative tourism project” – again, note the term regenerative as opposed to sustainable. “Sustainability is not enough,” John says. “We want to not only preserve habitat but grow habitat.”

John Pagano has enjoyed a stellar career in infrastructure development, including stints with Canary Wharf Group and Baha Mar Development Company but he says that nothing had prepared him for anything on the scale or underpinned by the ambition of his current projects

The Red Sea Project is taking shape as a unique, luxury tourism destination. It will embrace nature, culture and adventure, while setting what the company describes as new standards in sustainable and regenerative development and positioning Saudi Arabia on the global tourism map.

The Red Sea Development Company aims to set new standards in regenerative tourism and sustainable development by respecting the natural world. It is also intent on creating opportunities for local communities and protecting and enhancing the destination for the future.

“The Red Sea project starts with a site area of around 28,000 square kilometres. To put that into a context that people can relate to, it’s a little bit smaller than Belgium,” John told me. “So we have the land mass of a country, yet we’re approaching the development of this destination in a manner that is very light touch. So we’ll only ever develop a relatively small percentage of that – maybe less than 1%.

“The features of the destination are a magnificent archipelago of 90 pristine islands and the beauty of it is that it’s never been touched. We have thriving coral reefs, which you don’t find anywhere else in the world. Mother Nature, for whatever reason, has chosen to protect and preserve this part of the world and this key element of the marine ecosystem. We know, we’re blessed with that, but we’re not complacent. We are about making the place better.”

With other giga-projects taking place, including NEOM (a sustainable regional development in northwest Saudi Arabia) and Diriyah Gate – dubbed “a jewel from the Saudi past… that will be transformed into one of the world’s greatest destinations” – the possibilities here seem limitless.

Diriyah Gate, a jewel uncovered {Picture: Diriyah Gate Development Authority}
Domestic and international tourism will surge as the various giga-projects are advanced. Last week it was announced that Saudi Arabia’s national flag carrier will operate a weekly round trip flight from NEOM Bay Airport to Dubai International Airport from the end of June with London to follow shortly.

That optimism is being reflected in the hospitality sector. Amir Lababedi, Managing Director Development MENA for Hilton, a pioneer of the Saudi hotel sector, told me, “You see a real kind of shift in the dynamics of the tourism industry in this country that you’ve not seen anything like until the last few years – in terms of the social fabric; in terms of creating a more vibrant society; in the introducton of entertainment and cinemas; the empowerment of women and the ability of women to drive their own cars. It’s all having a massive impact on the country.”

A massive impact indeed. I have learned much about the Kingdom of Saudi Arabia in recent days. I shall return in the cooler winter months to discover more and to visit an array of projects that will redefine how we see tourism.

Next stop on my world tour is Dubai for just one night to catch up with Colm and Breeda McLoughlin of Dubai Duty Free. And then it’s on to Vietnam, another exciting tourism market that having put the dark days of the pandemic behind it is set to pick up the rapid pace of development it was showing before the crisis.