Tourism Development Fund’s CEO, Mr. Qusai Al-Fakhri
Since its launch in 2020, the Tourism Development Fund has been working to develop the tourism sector in line with the objectives of the National Tourism Strategy and the Saudi Vision 2030 by encouraging the private sector and pushing it to invest in various fields of tourism while adopting a sustainable financing approach. In addition to its focus on cooperation with other sectors to achieve sustainable development and economic prosperity. In this context, we spoke to the Tourism Development Fund’s CEO, Mr. Qusai Al-Fakhri, where he discussed the Fund’s role and its complementary relationship with the private sector and the tourism ecosystem, and the most prominent achievements of the tourism ecosystem in supporting development and economic growth.
The Fund’s roles in the tourism ecosystem
Q: First, could you please tell us about the role that the Tourism Development Fund plays in the tourism ecosystem?
Before I answer the question, let me begin by quickly introducing you to the tourism ecosystem and its role in the Kingdom of Saudi Arabia, which includes the Ministry of Tourism, works on developing and planning the Tourism Strategy and preparing regulations for the sector. The Tourism Development Council works to harmonize the goals of the National Tourism Strategy and coordination of efforts with relevant government entities to enable and develop the tourism sector. The Saudi Tourism Authority works to develop tourism services and products, which will enhance the tourist experience, it also works to promote tourist destinations in the Kingdom.
The role of the Tourism Development Fund comes as an enabler for entrepreneurs and investors in the tourism sector, in addition to working with our partners in the financial sector to raise the feasibility of financing and investment. The Saudi Red Sea Authority works on preparing regulations and issuing licenses to enable the practice of navigational and maritime activities within the geographical scope. In addition, the Air Connectivity Program that supports airlines in establishing new local and international air routes.
These entities are complementary in their roles, to provide everything that would contribute to the development of this promising sector and stimulate investment in the tourism ecosystem. Regarding the role that the Tourism Development Fund plays in the tourism ecosystem, we play a vital role by implementing many initiatives, such as financing tourism projects; as we provide direct financing for large enterprises and important tourism investments, in addition to supporting micro, small and medium enterprises by providing loans and financial guarantees and supporting entrepreneurs in the tourism sector.
At the Tourism Development Fund, we also provide advisory services to entrepreneurs and investors to enable them to grow and sustain their projects and strengthen partnerships through cooperation with the government and private sectors in establishing investment funds that contribute to the development of the sector. We work on expanding our network of relationships with large -local and international- institutions to contribute to the promotion and marketing of investment opportunities in distinctive tourist destinations in the Kingdom. Addition to our role in developing the tourism sector by supporting investment, developing tourist destinations in targeted locations, and improving the quality of hotels and tourist resorts.
Q: You mentioned a while ago that you support entrepreneurs, micro, small and medium enterprises, in addition to expanding your partnerships with large enterprises. Could you please provide us with some examples?
We work at the Fund in all directions for the renaissance and growth of the tourism sector. Every establishment, whether small or large, has an important role in the sustainability of the sector. The Fund has launched AWN Tourism Experience program and AWN Tourism Hospitality program to support entrepreneurs of small and medium enterprises in various fields of tourism. An example that we recently supported in the classification of small and medium enterprises is our signing of the financing agreement for Shada Development Company, which aims to establish a hotel that reflects heritage and culture in a contemporary way in the city of Jeddah, which enhances hotel investments and contributes to providing a qualitative heritage accommodation experience.
We also signed a financing agreement with Golden Frond Hotel Services Company, to develop the ENVI Ecolodge in Al-Ahsa Oasis, which will enhance sustainable tourism in Al-Ahsa as one of the most important tourist destinations characterized by historical and cultural depth.
As for our partnerships with large enterprises, we signed on the sidelines of the Cityscape Global 2023 exhibition, an agreement to finance and develop the Ritz-Carlton Resort under an investment fund managed by Bloom Invest, which will provide luxurious accommodation, distinctive service and entertainment facilities, with a charming view of the Arabian Gulf coast. This project embodies the integration and cooperation of the investment system that we seek in the tourism sector by working with our partners Retal Urban Development, Marriott International, represented by the Ritz-Carlton brand, and Bank Al Jazira.
We also previously signed a partnership and cooperation agreement to develop and operate a comprehensive five-star resort and tourist hotel in King Abdullah Economic City in Jeddah, operated by Rixos, a subsidiary of the Accor Hotel Group, that includes a water park and floating villas which is considers the first presence of Rixos in the Kingdom.
Q: The Tourism Development Fund provides financing solutions Can we say that you are a bank specialized in the tourism sector?
The Tourism Development Fund was established to accelerate the growth of the tourism sector and enable the tourism investment ecosystem to achieve the goals of the National Tourism Strategy by attracting private sector investments and concluding partnerships with government entities, banks, investment funds and others to ensure that investors receive all the support they need and that the gaps and challenges they face are bridged.
The Fund offers various financing solutions, including direct financing and joint financing with our partners in the financial sector, such as banks and investment funds, in addition to providing guarantees. This reduces the level of risk whether for financiers or investors. We also review feasibility studies and ensure their suitability to the current and future market situation contributing to developing projects of high standard that serve the sector’s objectives. The Fund’s role is not limited to financing products, as we also provide investment consultations and supportive services, to enhance the investor’s experience. We also utilize our extensive network of relationships with local and international operators of tourism projects and service providers to enable investments in the sector.
The Fund and The National Tourism Strategy
Q: The Tourism Development Fund seeks to provide an attractive investment environment targeting entrepreneurs, micro, small, and medium enterprises, and large enterprises. You have achieved many unique achievements that enhanced the development of the tourism sector. Is it possible to tell us about the approach you followed to achieve these achievements?
The Tourism Development Fund seeks to achieve the objectives of the National Tourism Strategy to develop the tourism sector by following an integrated approach. This approach is to encourage the private sector to invest in tourism fields and provide an attractive investment environment for entrepreneurs, micro, small and medium, and large enterprises.
As it is known, the National Tourism Strategy is based on the axes of the Saudi Vision 2030, as it aims to increase the tourism sector’s contribution to the GDP to more than 10%, create 1.6 million new job opportunities, and attract 150 million annual visits by 2030. In order to achieve these objectives, we work at the Fund to strengthen our partnerships with financial entities and provide attractive investment opportunities, in addition to providing advisory services and financing solutions to tourism establishments and entrepreneurs with our focus on financing tourism projects in the main targeted destinations, with the aim of developing a modern tourism pattern.
With this integrated approach, we are working to support the tourism sector and enhance its role in economic development and achieve the Kingdom’s strategic goals in the tourism sector.
Tourist destinations
Q: The National Tourism Strategy has identified many sites in the targeted tourist destinations. Could you tell us more about them and your role in them?
Indeed, in accordance with the National Tourism Strategy, all regions of the kingdom have been studied to identify attraction points to make them exceptional tourist destinations. These destinations include sites characterized by their diversity and distinctive tourism components, including 7 archaeological sites registered on the UNESCO World Heritage List, which are: The Hegra Archaeological Site, Turaif District, the Historic Jeddah District, the Rock Art in Ha’il, Al-Ahsa Oasis, Hima Wells in Najran, Finally, Uruq Bani Ma`arid Reserve.
The Fund’s role comes in aligning with the directions of the National Tourism Strategy by participating in workshops related to the strategy and engaging in periodic meetings with the relevant authorities in the tourism ecosystem on one hand. On the other hand, empowering investors and entrepreneurs by providing a package of financing and non-financing solutions and building strategic partnerships with various parties to enhance joint efforts and ensure coordination and integration with all parties to achieve the goals of the National Tourism Strategy and Saudi Vision 2030.
Q: Could you please tell us about the areas that you aim to work on in tourist destinations?
In the Fund, we work with the tourism ecosystem, government agencies, and the relevant private sector to support all the sectors that enrich tourist experiences, in accordance with the sectors listed by the World Tourism Organization, which are considered sectors that support the growth of the tourism sector, which are: hospitality facilities, tourism sector activities, food and beverages, retail trade in tourist goods, such as shopping and purchasing local products, culture and entertainment, sports and recreation, transportation solutions, etc.
Achievement stations in the Tourism Development Fund
Q: Three years since the establishment of the Tourism Development Fund, can you tell us about the most notable achievements during the past period?
During the past three years, we worked on the most prominent challenges facing the tourism sector, which were full of hard work and many achievements. This comes through the unlimited support of the wise leadership represented by The Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al-Saud and His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al-Saud Crown Prince, Prime Minister of the Kingdom of Saudi Arabia and His Excellency the Minister of Tourism, Chairman of the Fund’s Board of Directors, members of the Fund’s Board of Directors, and the Fund’s employees. In addition to launching TDF Grow, which aims to strengthen the emerging enterprise system and accelerate in developing talent and providing the appropriate environment for entrepreneurs.
We also launched the Tourism Investment Portal; the digital portal that aims to facilitate procedures for entrepreneurs to obtain the Fund’s services. We also launched the AWN Experiences program to support new micro and small enterprises or those in the process of growth and expansion to provide flexible financing solutions of up to one million Saudi Riyals. And the AWN Hospitality Program, which aims to support micro and small enterprises to contribute to their establishment and expansion, and to develop and renovate existing facilities with ambitious tourism projects, with a financing up to 10 million Saudi Riyals.
The Fund also worked to enable specific projects and provide non-financing solutions to stimulate and encourage local and foreign investment, including linking investors with opportunities targeting pioneering and distinguished projects such as resorts, hotels, etc.
As a result, memorandums of understanding and agreements were signed with various government agencies to enable qualitative tourism investment and maximizing the benefit from assets owned by the country, such as land, so that the private sector can benefit from them to achieve tourism projects that contribute to supporting the tourism sector and achieving the desired goals.
In addition to our establishment of the Graduate Development Program (Tourism Olou), to qualify young local talents to join the labor market and exploit the career opportunities available in the tourism sector, by providing high-level on-the-job training opportunities for outstanding male and female graduates of the Kingdom.
Q: What roles did you play in the Fund to support and prosper the tourism sector and empower investors in the targeted tourist destinations?
We know that driving tourism development requires the active participation of private sector investors, so we are committed to providing everything that entrepreneurs and large enterprises need to achieve their goals and ambitions, and we are keen to enable investors, small and medium enterprises and establishments related to the tourism sector to benefit from the opportunities available in the sector and contribute to writing stories that have been achieved. Successes that we are proud of, such as, our support for Pangaea Adventure Club, which is one of the first establishments to benefit from the facilities, financial solutions, and programs provided by the Fund which helped them expand by opening the “Pangaea Adventure Center” in Al Soudah, in addition to supporting the “Husaak Adventures” project, for which we provided the guidance and financing guide to offer a comprehensive tourism experience in AlUla.
Regarding large enterprises, for example, we have signed a financing agreement for the “Knowledge City Forum” project, with the Knowledge Economic City Company, on an area of 68,000 square meters, with a total value of up to 1,303 Billion Saudi Riyals, making it one of the largest unique tourism projects in Al-Madinah Al-Munawwarah. The mixed-use project will include a 5-Star hotel that will be operated by an international brand.
A partnership was also concluded to develop an investment project, the first of its kind in Asir Region, in cooperation with the Red Sea Company, at a value of more than 950 Million Saudi Riyals. A syndicated financing agreement worth 4.35 Billion Saudi Riyals was also signed to finance the construction of the first phase of the Avenues – Al-Khobar project, which includes a mall and a multi-use tower. This project is one of the largest pioneering projects in the Eastern Province with an area of 170,000 square meters, that will change the concept of shopping and entertainment and will enhance the tourism sector in the region and enhance its services.
The Fund’s participation in the World Tourism Council Summit achieved many gains, as the “Modern Hospitality Investment Fund” was launched and announced during the activities of the Future Investment Initiative “FII” 2021 in partnership with “Ennismore” and Al Rajhi Capital. It is a fund that aims to invest 1.5 Billion Saudi Riyals to develop a group of modern hotels and resorts in a number of locations in the Kingdom.
Achievements in Numbers
Q: Our readers prefer the language of numbers over any other language. Is it possible for you to specify for us, in numbers, the most prominent achievements of the Fund?
Of course, our achievements in the Fund are many, which we summarize as follows:
– The Fund contributed with 7.4 Billion Saudi Riyals to enable more than 100 tourism projects worth more than 35 Billion Saudi Riyals, which will contribute to providing more than 7,500 rooms and suites in tourist destinations.
– The Fund has enabled more than 1,200 small and medium enterprises, directly or indirectly by providing guarantees.
– The Fund also signed more than 145 agreements with local and international partners.
– The Fund organized 4 local events and participated in 28 local events and 12 global events to introduce the Fund’s solutions and investment opportunities in the sector.
– TDF Grow provided its advisory and training services to more than 2,700 beneficiaries.
Rapid Tourism Developments
Q: How do you read the rapid tourism developments in the Kingdom, especially those developments that took place in the past months?
First, let me highlight an important point, the Kingdom has been leading the tourism sector globally since its appointment as Chairman of the Executive Council of the United Nations World Tourism Organization in late 2022. As for the rapid tourism developments witnessed by the tourism sector in the Kingdom – such as the establishment of “Riyadh Air” The launch of the new “Murabba“ Development Company “The Line” project, and “Sindala” island in NEOM, in addition to the facilities for the electronic tourist visa, represent a strong indication of the leadership’s commitment to support and develop the tourism sector within the framework of the Saudi Vision 2030.
This was reflected positively for the sector, as the Kingdom came in 2nd place in terms of growth in the number of tourists in about the first half of 2023, with a growth equivalent to 58% compared to the same period in 2019, and the Kingdom also achieved the highest semi-annual surplus for the travel item in the balance of payments, reaching 40 Billion Saudi Riyals compared to the same period in 2022. In 2022, the Kingdom advanced to 11th place worldwide in the international tourism revenue index, and 13th worldwide in terms of the number of tourists. Also in 2022, the Kingdom welcomed approximately 16.6 million international tourists, representing various segments according to the report released by the World Tourism Organization.
Sustaining the tourism sector and enhancing the quality of tourism services and experiences are among the most important goals that the Kingdom seeks. Looking at future ambitions, the tourism sector will continue to witness continuous improvements and developments, thanks to the continuous cooperation between the concerned parties, investment in innovation and development of tourism products and experiences.
A final word that you would like to add:
We are very happy with the achievements we reached so far, and we strive for more. We invite entrepreneurs and investors or those who have ideas, whether large or small, to develop the tourism sector to reach out to the Fund to present their ideas and obtain the necessary support to achieve it. We also invite them to learn about the easy investment environment that we provide through offering appropriate financial and non-financial solutions for them and supporting with the enablers provided by the tourism ecosystem in the Kingdom.
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