International tourism not seen rebounding until 2023 — UN report

Short Url
Updated 30 June 2021

International tourism not seen rebounding until 2023 — UN report

  • COVID-19 (coronavirus) vaccination and certificates are key to restoring confidence in foreign tourism
  • In 2020, international arrivals plunged by 73 percent from pre-pandemic levels in 2019

GENEVA: International tourism arrivals are set to stagnate this year, except in some Western markets, causing up to $2.4 trillion in losses, a UN study said on Wednesday, adding the sector is not expected to rebound fully until 2023.

COVID-19 (coronavirus) vaccination and certificates are key to restoring confidence in foreign tourism, which provides a lifeline for many countries, especially small island states that rely heavily on the sector to provide jobs, it said.

In 2020, international arrivals plunged by 73 percent from pre-pandemic levels in 2019, causing estimated losses of $2.4 trillion in tourism and related sectors, according to the report by UNCTAD and the UN’s World Tourism Organization (UNWTO).

“The outlook for this year doesn’t look much better,” Ralf Peters of UNCTAD’s trade analysis branch, told a news conference.

“The first three months were again bad, there was not much traveling happening,” he said.

“There is an expectation of a certain recovery in the second half of the year, at least for North America and Europe to a certain extent,” he told Reuters, crediting vaccinations.

The report sets out three scenarios for 2021, showing international tourism arrivals forecast to drop by between 63 percent and 75 percent from pre-pandemic levels, resulting in losses of between $1.7 trillion and $2.4 trillion.

“In international tourism we are at levels of 30 years ago, so basically we are in the ‘80s ... Many livelihoods are really at threat,” said Zoritsa Urosevic, Geneva representative of the Madrid-based UNWTO.

“What we are looking at in the long run is...meeting the 2019 numbers after 2023,” she said.

Sandra Carvao, chief of market intelligence at UNWTO, said that it would be a “very diverse recovery,” varying by region and by country.

The European Union’s digital COVID-19 certificate, due to come into force on Thursday, represents the only regional harmonization to date, she said.

Carvao, referring to travel corridors, said: “We see for example Asia-Pacific is still one of the most closed regions in the world at this moment — most of the borders in the countries are either totally closed or with significant restrictions.”

Saudi Arabia’s tech landscape flourishes with innovative initiatives 

Updated 12 April 2024

Saudi Arabia’s tech landscape flourishes with innovative initiatives 

RIYADH: Saudi Arabia’s strategic location, thriving economy, and strong government support have attracted a diverse range of funding partners keen on assisting startups and entrepreneurs.

The Kingdom, according to Houssem Jemili, partner at management consulting firm Bain and Co., has one of the highest technology spends in the Middle East and North Africa, approximately 2.5 times that of the next country, and is growing year-on-year. 

Speaking to Arab News, Jemili said: “Saudi Arabia has a mature and diverse set of funding partners — government entities and programs (e.g., Monsha’at), large investment funds, and venture capitalists that provide access to both direct and indirect funding to startups and entrepreneurs.”  

Highlighting the Kingdom’s emergence as a dynamic tech hub in the region, he added: “KSA has a large domestic captive audience (the largest in MENA) that demands technology products and services.”   

Talat Zaki Hafiz, a Saudi-based economist, told Arab News that the Kingdom’s rise as a tech hub in MENA was greatly influenced by its status as the largest economy in the region, accounting for over 30 percent of the its gross domestic product, and ranking 16th among the G20 countries. 

“The technology strategy of Saudi Arabia includes ambitious targets and action plans based on attracting leading international companies mainly specialized in advanced and emerging technologies to enable the Kingdom to develop mega tech projects,” he said. 

Global Innovation Index  

Global Innovation Index 2023 Launch Event. WIPO/Violaine

Saudi Arabia’s strides in technological innovation are underscored by its position on the Global Innovation Index 2023, where it ranks 48th among 132 featured economies. 

“It (Saudi Arabia) has certainly made improvements, from 51st and 66th (position) in 2022 and 2021 respectively,” Jemili explained. 

He went on to say that the Kingdom recognizes that innovation is a “key driver of economic development,” and efforts will result in significant improvements across innovation input sub-indices like human capital and infrastructure, as well as output sub-indices such as knowledge and technology outputs, and creative outputs of the Global Innovation Index. 

Within the high-income group economies, Saudi Arabia ranks 41st, further solidifying its status as a burgeoning tech hub in the region.  

Moreover, the Kingdom’s ranking fifth among the 18 economies in North Africa and West Asia highlights its growing influence as a beacon of innovation in the Middle East.  

Hafiz believes that since the launch of Vision 2030 in 2016, Saudi Arabia has been focusing on tech-related industries in general and the digital economy in particular.  

“Since the digital economy is becoming the new trend in the 21st century, especially in Saudi Arabia, where over 60 percent of its citizens are youth less than 35 years old, they heavily use the internet to purchase goods and services,” he said.  

The economist explained that statistics revealed the Kingdom is witnessing a significant increase in the size of e-commerce, with expectations to reach $15 billion in 2025 and online sales projected to reach 66 percent.  

Saudi Arabia’s increasing prominence in technological advancement and innovation localization was showcased at the LEAP conference held in Riyadh. The event, which concluded in early March with great success, included agreements worth over $12 billion.  

“LEAP has made a tremendous effort to act as a node of the technology and innovation ecosystem in KSA — a node that connects the ecosystem and brings all the players together, through building a community,” Jemili said. 

Strategic investments 

Saudi Arabia’s emergence as a digital powerhouse can be attributed to its strategic investments in research and development, supportive policies, and a thriving startup ecosystem.   

With initiatives such as Vision 2030 and the establishment of the Digital Government Authority, the Kingdom is laying the groundwork for a technologically advanced future.  

Houssem Jemili, Partner at Bain & Co. Supplied

According to Jemili, the presence of global technology giants in Saudi Arabia is a testimony to the growth of the technology and innovation landscape in the Kingdom.  

“Such players provide the necessary minimum infrastructure that startups and entrepreneurs need to succeed,” he added.  

Jemili further elaborated: “They provide a world-class physical and digital infrastructure, like software labs and production studios, and even cloud credits to enable innovation at scale. Such advanced offering helps startups accelerate their ideas from early-stage to large-scale commercialization.”  

Global tech giants are investing billions in Saudi Arabia, highlighting its attractiveness as an investment destination, with Microsoft investing $2.1 billion in a global super-scaler cloud and Oracle committing $1.5 billion to build a new cloud region in Riyadh, as earlier revealed by Minister of Communication and Information Technology Abdullah Al-Swaha. 

Hafiz emphasized that the integration of technology in the Saudi traditional economy “is going so well.”  

“The Kingdom’s Vision 2030 is built on making significant changes in the Saudi economy not only to diversify its sector base but also to push for transformation to technology,” he added. 

Regulatory framework 

Saudi Arabia’s efforts to foster innovation extend to the regulatory realm, where the government has introduced initiatives such as regulatory sandboxes and fintech hubs.  

These initiatives provide a platform for startups and tech companies to test innovative products and services in a controlled environment, thereby facilitating compliance with regulatory requirements while fostering innovation.  

“Flow of and access to incentives is a big dimension that has helped Saudi Arabia drive its innovation landscape,” according to Jemili.  

He highlighted that the Kingdom has a rapidly evolving business environment that requires a structured regulatory system that is mature, growth-driven, and easy to navigate.  

“In addition, it is critical to enact clear and predictable regulations that enhance innovation, bring ease of doing business, and continue to build the trust of both the business community and investors,” he added.  

Jemili emphasized the importance of having a “phygital center of gravity” for the startup community, highlighting its critical role in providing firsthand ecosystem orientation and guidance to new entrepreneurs and foreign startups in the Kingdom.  

Phygital refers to a combined physical and digital center that serves as a pivotal hub for the startup community, offering both in-person and online resources, guidance, and orientation to new entrepreneurs and foreign startups.

With a diverse pool of founders and over 1,600 startups supported by a network of venture capital firms, Saudi Arabia is poised to become a global leader in technological innovation.   

Hafiz continued, emphasizing, “It is important to note that Saudi Arabia is the third worldwide and very advanced in digital industries, leader and ranked the first regionally according to the data of GOVTECH Maturity Index for 2022 issued by the World Bank Group.”   

He noted the government’s backing of advanced technologies in Saudi Arabia, which has driven significant progress toward Vision 2030’s goals by delivering high-quality digital services that bolster the national economy.  

Startup ecosystem  

Within the vibrant startup scene in Saudi Arabia, several companies have emerged as pioneers in innovation.  

Notable among them are startups enrolled in the Saudi Unicorns Program, exemplifying the Kingdom’s commitment to nurturing homegrown talent and fostering entrepreneurship.   

“Saudi Unicorns Program is a one-stop-shop solution to support and enable high-growth technology companies to reach the unicorn stage by providing an integrated set of services and offerings,” Jemili noted.   

The program provides unparalleled solutions to start-ups and entrepreneurs by providing access to connect with different stakeholders — international customers, talent, investors, and private sector, and experts for mentorship and guidance.   

He added that the objective of the program is in line with the overall Vision 2030, as it strives to increase the number of unicorns and create both direct and indirect impacts on the local GDP.  

“A differentiating aspect of Saudi Unicorns Program is its differentiated offerings based on the degree of readiness of the startups,” Jemili explained.  

Lean Tech, Mrsool, Quant, and Mozn are just a few examples of startups making waves in Saudi Arabia’s tech ecosystem.  

These companies represent the Kingdom’s vibrant culture of innovation and entrepreneurship, actively shaping its dynamic business landscape.  

With strategic investments, supportive policies, and a thriving startup ecosystem, the Kingdom is poised to lead the charge toward a digitally empowered future.  

By fostering collaboration, nurturing homegrown talent, and embracing emerging technologies, Saudi Arabia’s current momentum is promising for technology and innovation.   

Jemili cited the Magnitt report, stating that the Kingdom has emerged as the leading market for venture capital funding in the MENA region, attracting over $1.38 billion in investments in 2023. 

“This was the second year in a row that KSA has recorded a billion-dollar-plus figure in VC funding,” he said.  

Jemili gave examples of mega-rounds witnessed by Saudi-based platforms like Tabby and Tamara, which helped both companies secure unicorn status. “With continued efforts to improve livability aspects, improvements in ease of doing business, and continued growth and maturity of the funding institutions, KSA is on track for continued success.” 

As more of these elements come to life, the maturity of the ecosystems in cities like Riyadh and Jeddah can move from an early activation stage to a globalized stage.  

Hafiz concluded: “I don’t believe that the Kingdom is facing any pressing economic challenges to establish a tech ecosystem, simply because it is blessed with encouraging leadership.” 

He emphasized the encouragement to use technology at a large scale, which he believes has helped to “create an excellent ecosystem, especially when considering that more than 60 percent of the Saudi population are young, below 35 years old, and we are among the highest users of the internet in the Arab world and globally.” 

Saudi Arabia a beacon for female entrepreneurship, according to industry leaders

Updated 12 April 2024

Saudi Arabia a beacon for female entrepreneurship, according to industry leaders

CAIRO: Saudi Arabia is witnessing a significant surge in female entrepreneurship, positioning the Kingdom as a global leader in women-led small and medium-sized enterprises.  

This growth comes as Saudi Arabia’s entrepreneurial landscape flourishes, with SMEs becoming increasingly dominant. 

By the third quarter of 2023, the Kingdom boasted 1.27 million SMEs, showcasing the country’s commitment to diversifying its economy, as reported by the Saudi authority responsible for the sector, Monsha’at.   

In an interview with Arab News, Stephanie Nour Prince, partner at Riyadh and Dubai-based venture capital firm Nuwa Capital, highlighted the dramatic shift in the environment for female entrepreneurs in the Kingdom.   

Prince said: “In recent years, the landscape for female entrepreneurs in Saudi Arabia has undergone a remarkable transformation, both socially and professionally.”     

She further emphasized that this change aligns with a broader vision, which is already yielding impressive results as evidenced by the growing number of women in leadership positions within companies.  

As reported by Monsha’at in January 2023, women lead 45 percent of the Kingdom’s SMEs. Moreover, their participation in the information technology sector has seen a significant increase, jumping from 11 percent in 2017 to 24 percent in 2021, surpassing Silicon Valley’s figures by 8 percent.  

A new era of entrepreneurship  

As the Kingdom forges ahead with its technological revolution, female entrepreneurs like Nour Taher, co-founder of the Saudi-based artificial intelligence startup Intella, are making significant strides toward success.     

Under her leadership, Intella has experienced remarkable growth, secured multiple rounds of funding, and moved its headquarters from Egypt to Saudi Arabia.    

This move not only signifies Intella’s commitment to the Kingdom’s burgeoning tech ecosystem but also underscores the broader trend of female-led enterprises gaining ground in traditionally male-dominated sectors.   

Reflecting on this evolution, Taher told Arab News: “It’s promising that we are starting to see women venturing and excelling in diverse business sectors, particularly in technology. This shift is reshaping industries that were traditionally male-dominated and contributing to the emergence of a new era of entrepreneurship.”  

Nour Taher, co-founder of the Saudi-based artificial intelligence startup Intella. Supplied​​​​

A VC narrative  

The new era has also reached the world of venture capital, with a growing focus on female entrepreneurs, according to Prince.  

“The venture capital community is increasingly aware of the diverse perspectives and innovative approaches women bring to the table. Success stories of female entrepreneurs in the region demonstrate women-led businesses’ potential,” she said. 

Prince also points out the essential role of this industry in enabling women to not just start but also significantly scale their businesses.   

“While venture capital is not a prerequisite for launching businesses, it is pivotal for their rapid growth and success,” she explains. 

Prince elaborated that Nuwa Capital’s portfolio boasts female leaders across various sectors, from health-tech to fintech. 

“Equally important is the employment of women across our portfolio,” she said, going on to reveal that currently 20 companies in the firm’s early-stage offerings collectively employ around 1,000 females. 

“That’s about 50 women per company on average — something which is unheard of in large businesses, let alone startups. This is something we are extremely proud of,” Prince added.  

She further advocates for a venture capital ecosystem that is more inclusive and meets the unique needs of female entrepreneurs, including access to investment and mentorship networks.   

Echoing Prince’s sentiment, Taher highlights the significance of networking in entrepreneurship.   

“Women often have fewer networking opportunities, partly because men tend to benefit from more informal networks stemming from social interactions. This can put women at a disadvantage when seeking angel investors,” Taher explains.   

She recommends overcoming this challenge by actively engaging with the ecosystem and leveraging one’s network to facilitate introductions to active angel investors.  

Overcoming challenges  

The Kingdom has significantly advanced in eliminating barriers for women in entrepreneurship, yet there remains room for further progress.   

“I’ve been seeing a lot of initiatives supporting female founders in Saudi Arabia, and I’m very pleased to be seeing women take up as much space as they deserve to,” Taher noted.   

As an advocate for women in the Saudi entrepreneurial ecosystem, she highlighted ongoing efforts to enhance women’s participation in the sector.  

Despite these advancements, Prince, a strong advocate for female entrepreneurship, points out that the journey toward full empowerment and inclusion is far from complete.   

“The unfortunate truth is that there’s a lot more to be done and we’ve barely scratched the surface,” Prince said.   

“But we’re seeing early signs of change — but also early signs of self-awareness — and it’s encouraging to see women in Saudi Arabia championing each other,” she added.  

Prince noted that the lack of female representation in startup leadership is a global challenge, not confined solely to the Middle East. 

“However, we have a chance to be a beacon for the world and demonstrate how Saudi Arabia is championing women in innovation,” she added.  

Stephanie Nour Prince, partner at Riyadh and Dubai-based venture capital firm Nuwa Capital. Supplied

A beacon for the world   

Observing the increasing number of women entrepreneurs entering the business realm, Prince offered her guidance for navigating through the hurdles of entrepreneurship.   

“Being an entrepreneur is tough, but being a female entrepreneur comes with its own set of challenges. We need to collectively solve this by building an inclusive, diverse ecosystem where others, globally, have failed,” she said.  

Building on Prince’s point, Taher noted that the real journey starts from within, advising female entrepreneurs to believe in themselves and the reason for embarking on the challenging road.   

“Don’t be afraid to take risks and challenge societal norms. Seek mentorship and networking opportunities within and outside your industry. Cultivate resilience as setbacks are inevitable, but they serve as valuable learning experiences. Be humble through it all, and, most importantly, be kind to yourself,” Taher said.  

“Surround yourself with a supportive network of like-minded individuals; this doesn’t have to be a very lonely journey,” she concluded.   

Prince also outlined a multi-faceted approach to support the government’s vision.   

She stresses the importance of the private sector, particularly international companies within the startup ecosystem, to integrate and adapt best practices on female empowerment from global markets to the regional context.    

“Secondly, VC firms must ensure that their portfolios are establishing the right measures to encourage career growth for women. VCs must also ensure they eliminate any gender bias to help develop a diverse team, especially at leadership levels,” she added.     

“Lastly, women need to actively back one another, whether in the form of capital, mentorship, training, etc.,” Prince explained.

Oil Updates – crude rebounds on Middle East tensions but set for weekly loss

Updated 12 April 2024

Oil Updates – crude rebounds on Middle East tensions but set for weekly loss

SINGAPORE: Oil prices rose on Friday as heightened tensions in the Middle East raised the risk of supply disruptions from the oil-producing region, though prices are set for weekly losses amid expectations of fewer US interest rate cuts this year, according to Reuters.

Brent crude futures climbed 75 cents, or 0.84 percent, to $90.49 a barrel by 9:30 a.m. Saudi time, while US West Texas Intermediate crude futures rose 87 cents, or 1.02 percent, to $85.89.

The gains erased the losses from the previous session, which was dominated by worries about stubborn US inflation that dampened hopes for an interest rate cut as early as June.

Suspected Israeli warplanes bombed Iran’s embassy in Damascus in a strike for which Iran has vowed revenge, ratcheting up tensions in a region already strained by the Gaza war.

Israel has not said it was responsible but Iran’s supreme leader, Ayatollah Ali Khamenei, said on Wednesday Israel “must be punished and it shall be” for the attack.

The US expects an attack by Iran against Israel but one that would not be big enough to draw Washington into war, according to a US official. Iranian sources said that Tehran has signalled a response aimed at avoiding major escalation.

Israel is keeping up its war in Gaza but is also preparing for scenarios in other areas, Prime Minister Benjamin Netanyahu said on Thursday.

“The geopolitical risks remain elevated,” ANZ Research said in a note, adding that oil prices have jumped almost 19 percent also supported by improving economic conditions and supply cuts by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+.

In Europe, where the labor market has begun to soften and growth is stagnating, central bankers left the policy rate unchanged on Thursday but signalled they remain on track to cut rates as soon as June.

“The European Central Bank’s decision to leave policy rates unchanged ... was expected, but accompanying statements open the door for near-term monetary easing,” S&P Global Market Intelligence said in a note.

However in the US, Federal Reserve officials signalled on Thursday that there was no rush to cut interest rates as sticky US inflation remains a concern.

Oil prices were still set for weekly declines as Brent and WTI were heading for about a 1 percent drop as of 9:30 a.m. Saudi time on Friday.

ING analysts said they expect a pullback in oil’s rally if there is no further escalation in the Middle East or supply disruptions, adding that OPEC’s latest monthly market report was also in line with expectations.

“We maintain our forecast for Brent to average $87 a barrel over the second quarter of this year,” the ING analysts added. 

OPEC sees robust summer oil demand, economic upside potential

Updated 11 April 2024

OPEC sees robust summer oil demand, economic upside potential

LONDON: The Organization of the Petroleum Exporting Countries on Thursday predicted robust fuel use in the summer months and stuck to its forecast for relatively strong growth in global oil demand in 2024, while saying there was a chance the world economy could do better than expected this year, according to Reuters.

OPEC, in a monthly report, said world oil demand will rise by 2.25 million barrels per day in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.

A boost to economic growth could give extra tailwind to oil prices, which have rallied above $90 a barrel this year on tighter supply and war in the Middle East.

OPEC and its allies, known as OPEC+, last week agreed to keep oil output cuts in place until the end of June.

“Despite some downside risks, the continuation of the momentum seen in the beginning of the year could result in further upside potential for global economic growth in 2024,” OPEC said in the report.

OPEC+ will meet in June to decide whether to extend output cuts further or return some supply to the market.

“The robust oil demand outlook for the summer months warrants careful market monitoring, amid ongoing uncertainties, to ensure a sound and sustainable market balance,” the report said.

The OPEC report also said that oil production by its members was steady in March, rising by 3,000 bpd to 26.60 million bpd, despite the new round of voluntary output cuts by OPEC+ members that started in January.

Saudi Arabia to host Future Aviation Forum, aiming for regional logistics leadership  

Updated 11 April 2024

Saudi Arabia to host Future Aviation Forum, aiming for regional logistics leadership  

RIYADH: More than 5,000 global aviation industry experts, international airline leaders, and airport executives will convene in Riyadh from May 20 to 22 for a dedicated event focused on the challenges facing the industry. 

According to the Saudi Press Agency, the Future Aviation Forum will see discussions on issues related to the global flight sector, air transport, and environmental sustainability in civil aviation, as well as talks on enabling advanced air transport and enhancing global connectivity.

Organized by the General Authority of Civil Aviation, the event aligns with the Kingdom’s ambition to become a leader in the sector within a decade, including securing $100 billion worth of investments by 2030. 

“The conference will focus on enabling the efforts of the national strategic objectives for aviation aimed at transforming the Kingdom into a leading logistical center in the Middle East and providing an attractive investment environment in this vital and important sector,” SPA reported.

At its inaugural edition in 2022, the Future Aviation Forum welcomed representatives from 60 countries, facilitating the signing of 52 agreements and hosting 116 bilateral meetings. 

The event also debuted crucial policies and forged numerous partnerships between governmental and private sectors, enhancing collaboration in the aviation industry.

Transport ministers, heads of civil aviation authorities, and top executives from global aviation companies seized the opportunity to ink over 50 deals totaling $2.7 billion in value at the gathering.

According to a press release at the time: “The deals signed include bilateral air services agreements that will increase connectivity between the Middle East, Latin America, and Africa, as well as collaborations on sustainability, human capital development, airport operation deals and technology partnerships.”

The Riyadh Aviation Declaration was also adopted during this forum, outlining six principles to guide global aviation toward innovation, sustainability, and growth by promoting cooperation and prioritizing customer needs. 

Signatories committed to enhancing regulations, supporting recovery and investing in innovation as well as developing human capital, leading sustainability discussions, and advocating for industry contributions.