Saudi Arabia: Religious tourism offers significant growth potential

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Saudi Arabia: Religious tourism offers significant growth potential

07 Jun 2010

Religious tourism offers one of the greatest areas for potential in Saudi Arabia, according to a new report ‘Focus on Saudi Arabia’, released today.

Expansion of the hospitality sector in the Holy Cities of Makkah and Madinah is essential to overcome constrained capacity which currently exists, according to the report.

‘Focus On Saudi Arabia’, ninth in a series published by Cityscape Intelligence, contains exclusive foreign direct investment data from fDi Markets by the Financial Times and interviews with leading industry figures.

Speaking to Cityscape Intelligence, John Harris, Country Head Saudi Arabia, Jones Lang LaSalle, said: “There is a widespread recognition that religious tourism has huge potential. With over 3.8 billion Muslims around the world, this is one sector of the real estate market where the adage of ‘build it and they will come’ really does apply.”

He added that further areas with growth potential were affordable housing at certain price levels and expat accommodation. He said: “there are shortages in certain categories, such as affordable residences below SAR 750,000. There is also a shortage of expatriate compound residences, especially in Riyadh.”

Speaking to Cityscape Intelligence about the new mortgage law,Alan Hall, Senior Counsel, Al Tamimi & Company said that the Government had sought to increase real estate regulation and stimulate investment in the Kingdom.

He said: “The mortgage laws are a consolidated package of reforms in the area of real estate financing. Importantly, the Finance Company Control Law, which forms part of the package, will bring all finance companies under the direct regulatory control of SAMA.

He added: “In addition, the Government has sought to increase the effectiveness of the regulation of the real estate sector by embarking on a number of reforms designed to stimulate investment activity and protect the market from prejudicial speculative and uncontrolled conduct.”