BERLIN: Volkswagen (VW) will offer incentives to drivers of older diesel models of its five main passenger-car brands to switch to cleaner vehicles in a bid to help cut pollution, it said.
VW said incentives are currently being prepared for owners of models designed to meet the Euro-1, Euro-2, Euro-3 and Euro-4 emissions standards and will be on offer soon, but it did not disclose any financial details.
The incentives will apply to models of the VW namesake brand, Audi, Seat, Skoda, Porsche and VW commercial vehicles, it said.
The carmaker reiterated it will install a software upgrade on around 4 million Euro-5 and Euro-6 models in Germany as part of a deal agreed with German top-level politicians on Wednesday to help prevent diesel cars being banned from driving into city centers.
VW to offer incentives soon for diesel owners to adopt cleaner models
VW to offer incentives soon for diesel owners to adopt cleaner models
Oil Updates – crude climbs on optimistic demand outlook
SINGAPORE: Oil prices ticked higher on Wednesday amid upbeat global demand views from the US Energy Information Administration and OPEC, reinforced by industry data showing US crude oil inventories fell more than expected last week, according to Reuters.
Brent crude futures rose 50 cents, or 0.6 percent, to $82.42 a barrel at 9:30 a.m. Saudi time, while US West Texas Intermediate crude futures gained 62 cents, or 0.8 percent, to $78.52.
The EIA raised its 2024 world oil demand growth forecast to 1.10 million barrels per day from a previous estimate of 900,000 bpd, while the Organization of the Petroleum Exporting Countries maintained its 2024 forecast for relatively strong growth in global oil demand, citing expectations for travel and tourism in the second half.
Prices had eased more than 2 percent last week after OPEC and its allies said they would phase out output cuts starting October.
“Crude oil edged higher as OPEC maintained its forecasts for strengthening demand,” ANZ analysts said in a note, adding that demand for oil is likely to be driven by China and other emerging economies.
“Despite announcing last week that it will start to phase out some of the voluntary cuts later this year, its forecasts suggest it should be easily accepted by the market.”
Meanwhile, US crude oil stocks fell by 2.428 million barrels in the week ended June 7, according to market sources citing American Petroleum Institute figures. The decline was bigger than analysts polled by Reuters had expected.
Data from the EIA, the US government’s statistics arm, is due at 10:30 a.m. EDT – 5:30 p.m. Saudi time – on Wednesday.
Investors also looked forward to the US Consumer Price Index report, which will be released before the bell on Wednesday, and the US central bank’s policy announcement, due later the same day.
“Expectations for a dovish Fed at the upcoming meeting should support the oil upside momentum today,” said Tina Teng, an independent market analyst, as a dovish stance would stimulate economic growth and boost oil demand, adding: “However, the global economic slowdown could remain a bearish factor in the long term.”
In China, the world’s largest crude importer, consumer inflation held steady in May while producer price declines eased, indicating Beijing would need to do more to prop up feeble domestic demand and an uneven economic recovery.
Saudi Arabia’s Ceer signs $2bn deal with Hyundai Transys to supply EV drive systems
RIYADH: Saudi Arabia’s pioneering electric vehicle brand, Ceer, has secured a monumental SR8.2 billion ($2.18 billion) agreement with Hyundai Transys, a South Korea-based company, to supply “EV Drive Systems” for its vehicles.
Ceer stated in a press release that Hyundai Transys’ integrated Electric Drive System is a revolutionary three-in-one solution incorporating a motor for propulsion, an inverter, and a reduction gear. This innovative approach eliminates power loss typically associated with separate components and enhances vehicle space configuration.
James DeLuca, CEO of Ceer, hailed the partnership as a significant stride toward advancing the Saudi automotive sector.
He expressed excitement over integrating Hyundai Transys’ cutting-edge EDS technology into Ceer’s electric vehicles, further solidifying its position as a global leader.
Ceer emphasized that this advanced EDS system will not only reduce vehicle size and weight but also enhance power efficiency, streamline the EV design process, and improve cost competitiveness.
Steve Yeo, CEO of Hyundai Transys, echoed DeLuca’s sentiments, expressing confidence in the project’s success and anticipating a fruitful long-term partnership between the two companies.
Ceer was launched in November 2022 by Saudi Arabia’s Crown Prince Mohammed bin Salman as the Kingdom’s first EV brand. A joint venture between the Public Investment Fund and Foxconn, Ceer leverages BMW’s licensed component technology in its vehicle development process.
According to Saudi Arabia’s Ministry of Industry and Mineral Resources, Ceer is projected to contribute SR30 billion to the Kingdom’s GDP by 2034. The ministry also anticipates that Ceer’s factory will attract over SR562 million in foreign direct investment and create up to 30,000 direct and indirect jobs, further underscoring its significance in driving economic growth and job creation in the Kingdom.
Riyadh Air partners with CellPoint Digital for enhanced payment experiences
RIYADH: Passengers traveling with Riyadh Air can expect smoother cross-border payment experiences, thanks to a recent agreement with CellPoint Digital.
This new partnership aims to equip the airline with the latest payment technology, supporting its digital-first business strategy and setting it apart as it prepares to commence commercial operations in 2025, according to a press statement.
Under the agreement, Riyadh Air will use CellPoint Digital’s Payment Orchestration platform to process local and cross-border transactions efficiently.
Adam Boukadida, chief financial officer of Riyadh Air, said: “As a disruptor airline prioritizing our digital capabilities, we need a payments partner with first-hand, in-depth knowledge of air travel.”
He added: “CellPoint Digital's Payment Orchestration platform enables us to offer travelers a fully digital and immersive experience onboard and a smoother booking experience.”
Furthermore, Boukadida noted that this partnership will enhance the airline's global service and contribute to its goal of connecting Riyadh to over 100 destinations by 2030.
This move aligns with the Public Investment Fund-owned carrier’s ambition to become the world’s most forward-thinking airline, embracing sustainability practices, and setting new standards for reliability, comfort, and hospitality.
The partnership also aligns with Riyadh Air’s vision to disrupt the Saudi Arabian commercial aviation market, currently dominated by legacy players, by introducing innovative solutions.
“While legacy airlines can be held back by legacy technology, a next-generation airline like Riyadh Air can start from a more advanced position by using tailored technology that’s built for now, not 20 years ago,” said Kristian Gjerding, CEO of CellPoint Digital.
“With our Payment Orchestration solution developed specifically for the unique challenges faced by global airlines, Riyadh Air can offer travelers their preferred payment options while gaining more control over its cash flow and costs,” he added.
Based in Riyadh’s King Khalid International Airport, the Kingdom’s newest airline is scheduled to commence commercial operations by mid-2025, serving the country’s vision to transform into a global aviation hub.
With a projected investment of $30 billion, the airline aims to connect the country to 100 regional and international destinations by 2030, potentially creating over 200,000 jobs in the process.
Closing Bell: Saudi main index sheds 78 points to close at 11,775
RIYADH: Saudi Arabia’s Tadawul All Share Index continued its downward trend for the second consecutive day as it shed 78.35 points to close at 11,775.47.
The total trading turnover of the benchmark index was SR11.49 billion ($3.06 billion), with 143 stocks advancing and 80 declining.
The MSCI Tadawul Index also slipped by 0.93 percent on Tuesday to close at 1,472.97.
On a positive note, Saudi Arabia’s parallel market Nomu gained 79.79 points to 26,848.15, with 39 stocks advancing and 27 declining.
The best-performing stock on the main index was Miahona Co. The firm’s share price soared by 10 percent to SR20.68.
Other top performers of the day were Fawaz Abdulaziz Alhokair Co. and Saudi Chemical Co., whose share prices edged up by 9.35 percent and 8.63 percent, respectively.
The benchmark index’s worst performer was National Shipping Co. of Saudi Arabia, whose share price slipped 3.25 percent to SR25.30.
The share price of Saudi utility giant ACWA Power also slipped by 2.66 percent to SR366.
The positive performance of Nomu was driven by Osool and Bakheet Investment Co. whose share price surged by 10.30 percent to SR53.
Meanwhile, the Saudi Exchange announced that Saudi Manpower Solutions Co. will start trading on the main market on June 12.
According to a Tadawul statement, the upper and lower limits of the daily static fluctuation of the company’s shares would be 30 percent and 10 percent, respectively.
On the announcements front, Thimar Development Holding Co. said that it invested SR6 million in a Capital Market Authority-licensed real estate fund to build a residential tower in Riyadh’s Olaya District.
Meanwhile, shareholders of Tanmiah Food Co. approved the distribution of a cash dividend at 19 percent, or SR 1.9 per share, for 2023.
Saudi hospitality revenue to grow by 7.5% in next 4 years: report
RIYADH: Saudi Arabia’s hospitality revenue is expected to see an compound annual growth rate of 7.5 percent from 2023 to 2028, propelled by government-led initiatives, according to new data.
This growth, in line with the Gulf Cooperation Council average, is supported by various projects under the Kingdom’s Vision 2030 plan, as stated by UAE-based investment banking advisory firm Alpen Capital’s latest report.
The report further noted that the UAE is poised to grow at a compound annual growth rate of 6.9 percent from 2023 to 2028. This growth will be driven by infrastructure modernization and easier tourist visa rules.
Additionally, Qatar, Kuwait, Oman, and Bahrain are projected to experience even higher growth rates.
Reflecting on Saudi Arabia’s hospitality industry, Sameena Ahmed, managing director at Alpen Capital, said: “Growth of the sector is expected to be spurred by economic recovery, thriving tourism and concerted efforts of the governments to reduce reliance on hydrocarbon revenues.”
Alpen Capital’s report forecasts the GCC hospitality sector’s revenue to grow at a CAGR of 7.5 percent from 2023 to 2028, reaching approximately $48.1 billion by 2028.
This growth is driven by economic expansion, increased tourist arrivals, and numerous mega meetings, as well as incentives, conferences, and exhibitions coupled with sporting events in the region.
Additionally, the sector’s key operating metrics — occupancy rate, average daily rate, and revenue per available room — are expected to improve over the next five years.
The occupancy rate is forecasted to increase from 64.6 percent in 2023 to 69.3 percent in 2028, while ADR is expected to grow at a CAGR of 1.9 percent. Additionally, RevPAR is forecasted to experience a CAGR of 3.3 percent over the same period.
“The GCC is solidifying its global tourism footprint through successful hosting of major MICE, cultural and sporting events. Anticipated to attract millions of tourists, these events are poised to bolster the growth of the hospitality industry,” the report added.
It further stated that the region has implemented several liberalized measures to boost tourist inflow, such as unified GCC visas, Dubai’s five-year multiple-entry visa, and Saudi Arabia’s instant e-visa options.
Investments in transport infrastructure, including new airports, expansions of existing aviation facilities, and a regional rail network, are also expected to support tourism activity and increase demand for hospitality services.
However, the sector faces challenges from global economic uncertainties and geopolitical conflicts, the report highlighted.
Inflation and monetary policies may reduce consumer confidence, leading to decreased spending on international travel. Additionally, a shortage of skilled workers presents a significant hurdle, affecting the ability to recruit and retain trained professionals.
Alpen Capital further emphasized the sector’s embracing of digitalization, with operators leveraging technologies like artificial intelligence, machine learning, cloud platforms, and mobile apps to personalize experiences and enhance customer engagement.
The region is also adopting eco-friendly practices and conservation initiatives to meet the demand for responsible travel. Cultural, health, and wellness tourism are rapidly growing, reflecting shifting consumer preferences and a commitment to environmental conservation.
“A rising trend toward sustainable tourism and responsible travel is gaining ground across the GCC’s hospitality sector due to increasing ecological awareness among consumers worldwide,” said Sanjay Bhatia, managing director at Alpen Capital.
“Despite market competition and geopolitical uncertainties, the industry continues to strategically enhance visitor experiences and stimulate demand through innovation and consolidation. We expect to witness healthy domestic and cross-border M&A activity, as the sector advances to respond to the rising demand for accommodation and hospitality services,” he added.
Furthermore, global property giant Knight Frank anticipates that Saudi Arabia is gearing up to expand its hospitality sector by developing 320,000 new hotel rooms by 2030.
In a report released in April, the consultancy firm disclosed that as much as 67 percent of the planned hotel room supply in the Kingdom would fall in the “upscale” or “luxury” categories, referring to 4-star and 5-star accommodations, respectively.
This move aims to cater to the projected surge in tourism, with 150 million domestic and international tourists expected by 2030.
“With a target of welcoming 150 million visitors by 2030 — a 50 percent increase from its previous goal — the government is actively exploring various strategies to attract to international travelers,” Turab Saleem, partner and head of hospitality at Tourism and Leisure Advisory in Middle East and Africa at Knight Frank, said at that time.
Saleem noted that this includes the development of cultural and entertainment offerings nationwide, which complement existing attractions like the Jeddah F1 Grand Prix and numerous entertainment seasons.
“Noteworthy additions include theme parks such as Boulevard World in Riyadh, alongside the licensing of 24 additional theme parks by the Saudi General Entertainment Authority over the past year,” he added.
The consultancy’s analysis further revealed that Accor Hotel Group will slip from first to second largest hotel room operator in the country with an estimated 25,400 keys under management by 2030.
Meanwhile, Marriott International will likely emerge as the most prominent hotel operator in the Kingdom, with around 26,200 hotel keys under management by 2030, Knight Frank disclosed.
Furthermore, Riyadh’s winning bid to host the 2030 World Expo is projected to pump a significant economic boost of $94.6 billion into the nation’s capital, with an estimated 40 million visitors expected during the six-month-long exhibition.
Consequently, this underscores the need to provide adequate accommodation for hotel staff.
According to the World Trade Organization, 4-5-star hotels, on average, require one to two staff per room.
This suggests somewhere between 232,000 and 387,000 key workers could require accommodation in this segment of the Kingdom’s hospitality market.
