Currently outbound leisure-travel spend from Saudi Arabia hovers around a staggering $22billion per year. This massive outflow from the economy has mainly been due to the almost non-existent public entertainment offering in the Kingdom. Music, cinemas, events and mixed crowds have until recently been prohibited, leading to huge demand for travel to more relaxed and engaging destinations. Now, in an effort to retain some of this spending HH Mohamed bin Salman the Crown Prince (MBS), has embarked on a series of reforms and initiatives to liberalize laws and create a domestic entertainment industry and culture.
Anyone who has done business and spent time in Saudi Arabia will tell you that what is happening there is truly game-changing. From instant tourist e-visas to relaxed rules allowing unmarried visitors to share hotel rooms, deep reforms are being introduced almost weekly that undo decades of ultra-conservative regulations and encourage Saudi citizens to spend less time abroad and more money at home.
Introduced in late 2018, "Saudi Seasons" is a countrywide program of cultural, sports and mass entertainment events that has quickly illustrated the huge appetite for public entertainment. During the current Riyadh Season, one entertainment zone in the city was visited by 1.2 million people over 2 nights, representing 15% of the city's population! Organizers claim that the 2 month program surpassed its ROI objectives within 4 days. This validation of MBS's strategy is likely to lead to significant increases in government spending on entertainment creating opportunities for foreign firms. Arab News recently suggested that the Saudi events and entertainment sector would see spend of $64 Billion up to 2030. And its not just Event Management companies that can take advantage of this. Technology focused around crowd management, ticketing and marketing will also be in high demand for the thousands of events that are planned for 2020 and beyond.
On the built asset side the government has launched its masterplan for the Qiddiya project, a huge-mixed use development about 40 minutes from Riyadh. Qiddiya's stated aim is to become KSA's leading entertainment, sports and cultural destination, with a focus on the domestic market. Within the entertainment element a Six Flags Theme Park, Waterpark and Motorsports district have already been announced, with more activity-specific zones expected to be revealed over the next 12 months.
In the Eastern Province, King Abdulaziz Center for World Culture (Ithra), is positioning itself as a regional hub of creativity, culture and entertainment. Having already welcomed over a million visitors, Ithra has an extensive events calendar focusing on Edutainment, Creative disciplines and general entertainment. Heavily backed by Saudi Aramco, the centre will likely be seeking considerable additional events for its calendar over the next few years.
Cinemas, long banned in Saudi, are having a huge renaissance. US firm AMC Cinemas, has partnered with the government-backed Seven Entertainment, and plans to open 500 screens across the country in the next five years. UAE retail group Majid Al Futtaim (MAF) has already opened cinemas in Riyadh under its Vox brand and has more in the pipeline, whilst Fawaz Al Hokair Group has also launched a chain called Muvi which will operate in its Arabian Centre malls. As with its neighbors, malls in Saudi are hugely popular with the public and with the relaxation of rules around music and events, are likely to become entertainment venues in their own right. Both MAF and Arabian Centres have significant growth plans on top of their existing portfolios and will be looking for new ways to draw in consumers and keep them on location for longer.
All these initiatives need content, which is almost non-existent domestically. Whether it is artists, athletes, music, fashion, food or visual, there is a huge gap for content creators to fill. Some domestic artists are finding events and programs to exhibit their work, such as the "21,39 Jeddah Arts", but on the whole, nearly all the content for the "Seasons" program and other entertainment has to come from outside the country for the foreseeable future. Institutions such as the MISK Foundation are launching programs to encourage local content creation, but it is expected to take several years for these to bear fruit at a serious level.
Companies in the sector who are prepared to invest and register businesses in KSA will be well placed to take advantage of this huge opportunity which is only just starting to take off. Time spent now on putting the right foundations and networks in place are likely to pay off.