Big projects need to open doors for SMEs to drive tourism, says official

Short Url
Updated 05 June 2022

Big projects need to open doors for SMEs to drive tourism, says official

  • Saudi Arabia’s Tourism Development Fund offers ‘financial and non-financial support to startups’

RIYADH: Prominent Saudi projects aimed at elevating tourism in the country will need to integrate with small and medium enterprises, said a senior official of Saudi Arabia’s Tourism Development Fund.

“We believe that even our big projects will need a lot of integration with SMEs to activate the entertainment, food and beverages sector,” Wahdan Al-Kadi, the chief business officer at TDF, told Arab News on the sidelines of the Future Hospitality Summit in Riyadh.

The two-day event held under the theme “Reimagined Horizons” discussed the future of hotel development, destination impact, aviation, sustainability, restaurant investment and human capital.

It featured a series of sessions covering topics such as the future of hotel asset management, the future of loyalty schemes, transparency and brand loyalty.

Encouraging SMEs

During the interview, Al-Kadi said that the TDF provides financial and non-financial support to startups and SMEs in the nation.

“We have financial support and non-financial support. We have a business app that offers to coach SMEs to run their businesses,” said Al-Kadi. 




Wahdan Al-Kadi

He further added: “There is financial support as well. We have 10 different products for SMEs that offer startup loans, working capital, asset financing, and many other products to support them.”

Tourism’s impact on GDP

Al-Kadi noted that the revenue from non-oil sectors is crucial for Saudi Arabia’s economy.

“There is a lot of focus on diversifying the economy through industries such as tourism, which can contribute to the gross domestic product and generate jobs. The idea is to raise the contribution of tourism to GDP from 3 percent to 10 percent and add another 1 million jobs directly and indirectly to the industry by 2030,” he added.

Al-Kadi added that the TDF is also doing its part to attract investors to the country.

“We have a one-stop-shop that helps local and international investors get the right data on the destinations we are promoting, besides supporting them with project-related licenses and permits and assisting them in getting lands.

We also do review feasibility studies,” he said.

Saudi Arabia has become a tourist destination for regional and international visitors and the Kingdom’s tourism sector is accelerating the pace for the future by announcing several programs and initiatives.

Saudi tourism offers geographical and historical diversity, highlighting natural resources, archaeological treasures and historical places that meet the aspirations of tourists.

Prior to the COVID-19 pandemic, 450,000 tourist visas were issued, since the Kingdom’s Tourism Authority launched the tourist visa program in 2019, by targeting 49 countries in the initial stage, and facilitated access to tourist visas electronically or through entry points to the Kingdom within specific regulatory controls.

The authority has prepared programs to attract tourism, and has been activating tourism investment and the role of the private sector. The authority has also participated in local and international tourism exhibitions and has managed marketing destinations, sites, itineraries, products and tourist packages internally and externally.


McDonald’s to begin reopening Ukraine restaurants

Updated 11 August 2022

McDonald’s to begin reopening Ukraine restaurants

  • The company closed all its restaurants in Ukraine and Russia in March
  • McDonald's said it was working with suppliers to get products to restaurants

DUBAI: McDonald’s Corp. said on Thursday it plans on reopening its restaurants in Ukraine over the next few months in an early sign of western businesses returning to the country, even as the conflict with Russia continues.
The company closed all its restaurants in Ukraine and Russia in March, with McDonald’s selling most of its restaurants in Russia to one of its local licensees in May.
“After extensive consultation and discussion with Ukrainian officials, suppliers, and security specialists, and in consideration of our employees’ request to return to work, we have decided to institute a phased plan to reopen some restaurants in Kyiv and western Ukraine” Paul Pomroy, McDonald’s head of international operated markets, said in a message to employees.
The company said it was working with suppliers to get products to restaurants and bringing employees back on site with enhanced safety protocols.
McDonald’s had 109 restaurants in Ukraine, but did not specify how many it planned to reopen.


Saudi Arabian Mining Co. emerges as TASI’s 5th-best performer

Updated 11 August 2022

Saudi Arabian Mining Co. emerges as TASI’s 5th-best performer

  • Analysts expect Ma’aden to maintain its solid performance throughout 2022, owing to its expansion plans

RIYADH: Saudi Arabian Mining Co., known as Ma’aden, ranked fifth among the top share price gainers this year on the Saudi stock index TASI buoyed by strong results and a thriving mineral sector.

Ma’aden’s share price in 2022 opened at SR39.25 ($10.5) and climbed to SR59 on Aug. 4, surging 53 percent.

A booming mineral industry fueled this rise in Saudi Arabia as, in recent years, the Kingdom has shifted its focus toward discovering and extracting minerals and metals to support its mining industry.

There is over $3-trillion worth of minerals to be exploited in the Kingdom, which opens huge opportunities for minerals companies, Peter Leon, a partner in Johannesburg-based law firm Herbert Smith Freehills told reporters in February.

Leon advised the Kingdom’s Ministry of Industry and Mineral Resources on drafting its new mining law.

Khalid Almudaifer, vice minister of MIMR, told Arab News earlier this year that the ministry had established the mining sector’s infrastructure, allowing the Kingdom to leapfrog in both mining and sustainable mining.

FASTFACTS

• The company’s share price in 2022 opened at SR39.25 ($10.5) and climbed to SR59 on Aug. 4, surging 53 percent.

• Ma’aden reported a 185 percent surge in profit during the first quarter of 2022, hitting SR2.17 billion.

• The mining company has a market capitalization of over SR100 billion.

As the Kingdom revealed that it could be sitting on untapped mineral deposits worth $1.3 trillion, Almudaifer added that the $1.3 trillion estimate of untapped minerals is only a starting point and that underground minerals are likely worth even more.

In March, the state-owned firm announced its plans to increase production capacity and invest in exploration to tap into $1.3 trillion mineral reserves, a reason economist Ali Alhazmi believes that made Ma’aden shares lucrative, further leading to high performance.

Speaking to Arab News, Alhazmi explained that one of the reasons could be attributed to Ma’aden turning into probability last year, reaching SR5.2 billion, compared to SR280 million in losses in 2020.

The other reason could relate to its plan to double its capital by distributing three shares to shareholders, which has attracted investors to buy Ma’aden shares.

According to Abdullah AlRebdi, CEO of Rassanah Capital, the beginning of the third line of its ammonia production also helped the company’s fortune, especially when there was a considerable shortage of raw material for fertilizer. It is worth mentioning that the ammonia plant expansion is set to add over 1 million tons of ammonia production to reach 3.3 million tons, making Ma’aden one of the largest ammonia producers east of the Suez Canal.

Ma’aden reported a 185 percent surge in profit during the first quarter of 2022, hitting SR2.17 billion, amid a jump in commodity prices.

Analysts expect Ma’aden to maintain its solid performance throughout 2022, owing to its expansion plans and gold mining projects in Mansoura and Masarrah.

“By the end of 2022, Ma’aden will achieve SR9 billion in profit, a growth of 50 percent from 2021,” Alhazmi predicted.

As one of the fastest-growing mining companies worldwide, Ma’aden has a market capitalization of over SR100 billion and is one of the Kingdom’s 10 most prominent players.

Related


Russian oil shipments to central Europe expected to resume

Updated 10 August 2022

Russian oil shipments to central Europe expected to resume

  • “I expect the oil shipments to resume in hours,” Slovakia’s Economy Minister said
  • Transneft cited complications due to European Union sanctions for its action on Aug. 4

BRATISLAVA, Slovakia: Oil shipments from Russia through a critical pipeline to several European countries should resume soon after a problem over payments for transit was resolved, Slovakia’s Economy Minister Richard Sulik said on Wednesday.
“I expect the oil shipments to resume in hours,” Sulik said.
Russian state pipeline operator Transneft said Tuesday it halted shipments through the southern branch of the Druzhba, or Friendship, pipeline, which runs through Ukraine to the Czech Republic, Slovakia and Hungary. The northern leg of the Druzhba pipeline, which runs through Belarus to Poland and Germany, was unaffected, Transneft said.
Transneft cited complications due to European Union sanctions for its action on Aug. 4, saying its payment to the company’s Ukrainian counterpart was refused.
Sulik said the payments would be made Wednesday by Slovak refiner Slovnaft after both the Russian and Ukrainian sides agreed to the solution.
Slovnaft is owned by Hungary’s MOL energy group.
MOL confirmed the money has been transferred.
Slovakia receives practically all its oil through the Druzhba pipeline. Sulik said the payment is worth some 9–10 million euros (up to $10.2 million).
He said his country would work on a long-term solution to the problem which he said was caused by the refusal of an unnamed bank in Western Europe to transfer the money due to the sanctions imposed by the EU on Russia for its war against Ukraine.
“I wouldn’t look for a political context behind it, there’s none,” Sulik said.
However, Simone Tagliapietra, an energy expert at the Bruegel think tank in Brussels, said Russia has weaponized natural gas heading to Europe by claiming technical issues, and “this opens questions on whether it might now do the same with oil.”
Russia has blamed equipment repairs for its decision to slash flows through the Nord Stream 1 pipeline to Germany, whose government has called it a political move to sow uncertainty and push up prices amid the war in Ukraine.
EU leaders agreed in May to embargo most Russian oil imports by the end of the year as part of the bloc’s sanctions over Moscow’s invasion of Ukraine.
The embargo covers Russian oil brought in by sea, but allowed temporary Druzhba pipeline shipments to Hungary and certain other landlocked countries in central Europe, such as Slovakia and the Czech Republic.

Related


Middle East investors eye London property on back of weak pound

Updated 10 August 2022

Middle East investors eye London property on back of weak pound

  • Thanks to the favorable exchange rate, a £1 million home in London that would have cost $1.7 million in 2014 currently costs only about $1.2 million
  • Exchange rate forecasts predict sterling will strengthen against the dollar between now and 2026, suggesting that now is the perfect time for overseas buyers to take the plunge

LONDON: The declining strength of Sterling has created a window of opportunity in London for investors from the Middle East, according to property consultancy JLL.

Sterling buyers are paying 35 percent more now for London properties than they were eight years ago but those purchasing in US dollars are paying 3.8 percent less.

In June 2014, a US buyer would have had to pay $1.7 million for a £1 million property in London. The weaker pound means at the end of June this year, a £1 million property in the city would have cost only $1.2 million.

Exchange rate forecasts from Oxford Economics predict the pound will strengthen against the dollar between now and 2026, suggesting that this is the perfect time for overseas buyers to take advantage of the currency-exchange benefits that are available.

Analysis of passenger arrivals at London’s Heathrow Airport show that the number of visitors from the Middle East has recovered to pre-pandemic levels. In fact, the number of passengers arriving from the region in May was 1 percent higher than the pre-pandemic average, and 2 percent higher in June.

“The weaker sterling, alongside the safe-haven status usually associated with UK real estate, is driving and will continue to drive investment here,” said JLL’s Alex Carr.

“This return of overseas demand at present is particularly apparent among purchasers from the Gulf states, who are traveling back here for the first time in two years.

“London has always, historically, been a safe haven for wealthy individuals from Gulf states who are looking to diversify their assets, being one of the most resilient and transparent property markets in the world.”

London’s upscale Kensington district reportedly has experienced a significant increase in inquiries and applications from buyers in the Middle East.

“It was evident in May that demand was building, with increased communications from prospective (Middle Eastern) buyers who were preparing for their return to the UK following two years of travel restrictions,” said JLL’s Thomas Middleditch.

“A lot of these individuals have kept in touch over the course of the pandemic to stay informed on the market, yet as most are tangible buyers they have waited until they are in a position to physically return to the UK before inquiring about specific properties.

“Kensington has always been popular among Middle Eastern buyers and considered a low-risk investment given its location and established address.”


Saudi commercial banks’ June consumer loans rise 13% to $118.9bn

Updated 09 August 2022

Saudi commercial banks’ June consumer loans rise 13% to $118.9bn

  • Share of consumer loans in total bank credit falls to 19.9 percent, data shows

CAIRO: Consumer loans of Saudi commercial banks increased 13 percent to SR445.8 billion ($118.9 billion) on June 30, 2022, compared to SR394.2 billion on the same day last year, the Saudi Central Bank, also known as SAMA, revealed.

This growth, however, pales in comparison to the 17.4 percent growth between June 30, 2021, and June 30, 2020, the data pointed out.

Moreover, the share of consumer loans in total bank credit has fallen to 19.9 percent on June 30, 2022, the lowest share percentage on record, data compiled by Arab News revealed.

It is worth mentioning that consumer loans do not include real estate financing, finance leasing and margin lending, according to SAMA.

From June 2017-2022, consumer loans have had a positive trend. The value grew 0.5, 0.6, 5.3, 17.4, and 13.1 percent year on year, respectively. The consumer loans stood at SR315.1 billion on June 30, 2017.

According to SAMA, 90 percent of consumer loans fall under the “other” products category.

“The ‘other’ major loan component is related to general consumer bank overdraft short- and medium-term funding as credit card loans are captured separately,” said Mohamed Ramady, a London-based consultant and former professor.

The balance of consumer loans to finance “other” products increased 19 percent to SR402.3 billion on June 30 this year from SR338.2 billion the same day last year.

The remaining 10 percent is distributed among renovation and home improvement, vehicles and private transport, furniture and durable goods, education, healthcare, tourism and travel.

Renovation and home improvement, which makes up 3.4 percent of the 10 percent, saw a 31.4 percent decline to SR15.2 billion on June 30, 2022, from SR22.2 billion a year ago.

Moreover, car loans experienced a 20.6 percent year-on-year decrease from SR15.5 billion to SR12.3 billion during the period under study.

“Consumer loans have decreased in some items, especially in capital home goods and home improvements as well as vehicles as consumers await to take stock of increased input price hikes,” he added.

Furniture and durable goods underwent a 31.1 percent decrease from SR12.6 billion to SR8.7 billion over the same period. In contrast, education loans grew by 33 percent to SR5.9 billion.

Looking at consumer spending during the first half of 2022, the total value of point of sale transactions grew 12.9 percent year on year, reaching SR271.2 billion in June year-to-date compared to SR240.3 billion over the same period in 2021, SAMA data stated.

“POS transactions have gone up over H1 2022 in the items that were expected to increase with the gradual easing of lockdown restrictions such as food and beverages, restaurants and cafes and goods and services,” revealed Ramady while pointing out that this trend was also apparent in other countries coming out of the lockdown.

The most significant change in POS value between the first half of 2021 and 2022 was in “miscellaneous goods and services,” which grew 42.6 percent from SR19.7 billion to SR28.2 billion during this period.

The “others” category in POS, which makes up 21.2 percent of the total value of transactions in the first half of 2022, surged 33.6 percent from SR42.7 billion in the first half of 2021 to SR57.1 billion in the first half of 2022.

“The “others” in POS capture general personal services sales, including home delivery and uber services not captured in the broader items,” specified Ramady.

Food and beverages, another component that exhibits a prominent share of 14.7 percent in POS sales, showed an increase of 14.8 percent from SR35.8 in June year-to-date last year to SR41.0 billion in June this year.

On the other hand, restaurants and cafes increased 31.4 percent from SR28.3 billion in the first half of 2021 to SR37.2 billion in the first half of 2022.

Related