The Red Sea Project is one of three-mega projects in Saudi Arabia, the pillars of Crown Prince Mohammed Bin Salman’s extensive reforms known as Vision 2030, designed to move the country away from oil, isolation and ultra-religious conservatism.
With two-thirds of Saudi citizens aged under 35, the Red Sea Project aims to attract domestic, as well as international, tourists. Many Saudis holiday in nearby Bahrain or Dubai due to the dearth of local recreational attractions – taking $30bn a year with them that could be spent at home.
Covering land as large as Belgium, the Red Sea Project will expand along Saudi Arabia’s west coast and boast 50 natural islands. It is wholly owned by a standalone closed joint-stock company, the Red Sea Development Company (RSDC), a subsidiary of the country’s Public Investment Fund (PIF), one of the world’s largest sovereign wealth funds.
British Virgin Group founder Richard Branson is one of half a dozen foreign members of the RSDC board. Although the company has made the initial investment, it is seeking partnerships with international investors and hoteliers.
The Red Sea Project will include a special economic zone with its own regulatory framework, visas on entry, relaxed social norms, improved business regulations and environmental sustainability, thereby enabling it to develop and deliver a world-class international tourist destination, according an RSDC statement to Reuters.
“The destination will provide a unique sense of place for visitors and [will] offer nature lovers, adventurers, cultural explorers and guests looking to escape and rejuvenate a wide range of exclusive experiences, combining luxury, tranquillity, adventure and beautiful landscapes,” says John Pagano, chief executive of the RSDC and former managing director of Canary Wharf Group in London.
The first phase will include hotels and private housing, along with a new costal town, an airport and a marina, and is due for completion by late 2022, according to the RSDC. Authorities hope that when complete it will create up to 35,000 jobs and contribute $4bn to the local economy.
The PIF has promised that the Red Sea Project will be governed “on par with international standards”. Whether the highly religious and conservative state of Saudi Arabia will be able to deliver and maintain relaxed social norms is not only uncertain, but also unprecedented, according to Jon Truby, director of the Centre for Law and Development at Qatar University.
Saudi Arabia’s often volatile foreign policy, which has recently seen it enter diplomatic and economic conflict with Canada, may also impact the project’s allure for international tourism, which is key to the project’s success, he adds.
Karen Howes, CEO of Taylor Howes, a luxury interior design practice that has experience in the Middle East, believes there’s strong demand for Red Sea tourism alongside exacting international standards, similar to that offered by Dubai.
“I think Saudi Arabia can achieve those standards with the right international people on board,” she says. “Further social change will happen and I don’t think you’ll see female tourists boycotting the project. There’s huge demand for wellness and longevity facilities, so they should tap into that.”