The Saudi Commission for Tourism and Antiquities (SCTA) has proposed a SR 5 billion ($1.33 billion) fund to promote tourism in the Kingdom.
Prince Sultan bin Salman, chairman of the SCTA, told Arab News that the organization is looking to establish a fund to finance tourism projects, to encourage business people to invest in the sector.
Prince Sultan was speaking on the sidelines of the Arab Travel Exhibition in Dubai. "We are talking with a number of government agencies to launch the project," he said.
The plan is to finance tourism projects with interest-free loans that are paid in annual installments. An SCTA study found that a fund was the best way to encourage more private sector participation.
The fund needs approval from the Supreme Economic Council. It aims to boost domestic tourism by identifying sustainable priorities and ensuring private and public sector partnerships to develop services and infrastructure.
Easy loans would be extended to finance hotel buildings, children's parks, entertainment facilities, and training of tourism guides.
Many analysts believe that the lack of funding is a major hurdle in the development of tourism projects in Saud Arabia, especially with banks placing stringent conditions on borrowers. There is also a lack of accurate information and marketing efforts. In addition, some projects are simply not profitable to warrant more involvement.
A number of businesspeople have asked for government guarantees because new tourism projects need bold investments.
Prince Sultan said that Al-Uqair Tourism would be established soon, with capital of SR 3 billion. The project is considered by many to be a major shift in tourism development.
Prince Sultan said a number of government and quasi-government organizations will have stakes in the company.
A major boost to the project was the decision of the Council of Ministers to allocate SR 1.4 billion to fund the basic electricity and water work for the project. "I believe it will be a major attraction for tourists in the Gulf," he said. Meanwhile, sources in the industry said that the value of hotel investments in Saudi Arabia is set to increase to SR 144 billion by 2020.