The tightening belt

What I foresaw is now coming to pass in more than one way. ECNS China gives us ‘Saudi Arabia aims to attract up to 5 million Chinese tourists by 2030’ there was always a shift coming and as we see it, Saudi Arabia becomes more and more driven to see what the Chinese markets can deliver. We saw this last week in the Saudi Tourism Festival held in Beijing on Oct 17, 2024. We are given “Saudi Minister of Tourism and Chairman of the Saudi Tourism Authority Ahmed Al-Khateeb said that Saudi Arabia is China-ready and welcomes all Chinese travellers with increased connectivity, customised products and strategic partnerships.” Now some of you will respond with ‘so what?’ And that might be fair in one way. But this number represents a much larger issue. As I see it, one third is goal driven tourism. People will decide on Saudi Arabia as a destination for a job, or as a cheap tourism destination. Two third will go as tourist with optional goals, but these three million tourists will go to Saudi Arabia and not to their ‘normal’ destinations. That will show in diminished numbers all over Europe (France, England, Spain and Italy) and America. These people will also attract optional tourists who will change their initial destination. The other 2 million will optionally retrench their optional ‘cheap labor’ destination from Australia and places like the Netherlands, Belgium and the nordic countries. You will think that it does not matter, but consider all these coffee places that ‘allowed’ for these people, optionally in other areas too. They will come short of their usual numbers. These tourists also spend all they earn in that country. As such there will be a shift, an initial shift that seems small but could grow over time. These 5 million will spend their money somewhere else (in Saudi Arabia) and that facilitates to more, it always does. You might not think much of this, but the Saudi job market is booming. There are (allegedly) at present a little over 10,000 jobs outstanding. A fair deal are out reach of a lot of them, but consider this job “Digital Marketing Specialist. Average Salary: SAR 9,500-35,000 per month” and consider that they have the Beijing University of Technology and over a dozen more universities where these young crackers would like to see options in their first 2 years. They have just graduated University, they have spend almost every waking hour working on digital solutions like TikTok, broadcast experience and on the other hand we see places like Huawei making waves in Saudi Arabia and the UAE. These two places will see an increase of Chinese workers with an option to fulfil their dream a lot faster, so yes, Saudi Arabia will become a swing location for these people. All options that are shutting doors on Europe, Australia and America. 

We are also given “the country is preparing to launch its winter season tourism attractions, which will provide a range of experiences filled with entertainment, luxury, adventure and natural beauty, running from October to May”
Now consider that Oxagon, Trojena, Magna and Sindalah now suddenly will have a grasp of a thousand more affordable workers, bringing both a digitally active workforce as well as language skills to their regions. Yes, the cheaper groups will also infuse the wealth group from China to their shores because these people will encounter others with their language skills. As such the people who depend on these rich tourists will endure a lessened impact as they will all want to go to the newest places in Saudi Arabia. I reckon that in the 5,000,000 people will be at least 500,000 people who are beyond well-off and they will go to Saudi Arabia in the space of 2026-2028 (at least) and that is a kick to the heads of economy in the aforementioned countries. The top 1% of wealthy Chinese who are making over $80,000 are expected to spend that money in Saudi Arabia. And I am referring to the people who would have spend their cash in London, Paris and Orlando. Merely these three places will see a drop of income in the next few years. So how much more is needed? You might think that the small setting of “France is the most visited country within Europe, attracting an impressive 81,411,000 foreign sightseers each year”, but that would not be entirely correct. It includes all nations, including Europeans and a bunch of them will be attracted to Saudi luxury as well and consider that 1% is still 814,110, even if they merely lose 1%, that amounts to quite the drain on revenue and that is in part already heading towards Saudi Arabia. Already we are seeing messages on Free tourist visas, the one element that partially blocks choices is in the process of being removed. And all this is piling up against Europe and America. All whilst we were given ‘Tourism trips by residents of EU in 2023 up close to 6% y/y’ we ignore the drop that a mere 1% drop wouldn’t be much, but these tourists have beckoned billions in investments all over Europe and now I expect to see the Chinese drop as well as the ‘local’ tourists now dialling Saudi Arabia for their upcoming destination. Add to that whatever business bookings we see and you know these sales types, how they like to be known to go to new and luxurious destinations, the punch packing trips all over Saudi Arabia will be handing several body blows to Europe (America as well). We might merely see that the effort is on 5,000,000 Chinese tourists. But the overall impact will be a lot higher. That is the one part that everyone forgets about. The overly large population of tourists can only spend their money once or perhaps twice a year and the appeal of Saudi Arabia is overwhelming with at least three locations appealing to a lot of tourists. Add to this Riyadh and the impact of Saudi tourism will be felt in most of the tourist places of Europe and America. I reckon that if Disney and Universal sets a theme park in these places the damage will be near complete. Not a mere 2-3 years. But an impact over the next decade at least. Whatever we think of these parks in Orlando, they are overpacked and soon there will be an alternative of the same making. We see (at present) “With over 58 million annual tourist visits, Disney World averages approximately 159,000 visitors per day across all its parks” as well as “In 2023, 10 million tourists visited Islands of Adventure, a decrease of 9%” and consider that these two places could lose close to 15% more, people that have had enough of these massive queues and they want an alternative. Well Warner Brothers is already seeing an increasing populous enjoying Abu Dhabi and I reckon that these are all people contemplating Saudi Arabia as an optional destination.

Tourist destinations in Europe and America will see the need to tighten their belts. And this is not new. I floated the idea on September 27th 2023 in ‘As the belt tightens’ (at https://lawlordtobe.com/2023/09/27/as-the-belt-tightens/) so this is not news to me. I saw it coming a mile away (well, actually a year ago), and that is all before the glamour of Vision 2030 hits the tourists on the retina. I think I made my case 2 times over and the impact should be seen all over Europe in the time 2026-2028, after that? That depends how Saudi Arabia plays it cards. I made one other prediction (presumption) on what would be needed and that could put Europe and America in a bind, they either invest and make ready for 2025 or they might lose a lot more.

Have a great day and contemplate the view from the Aedas ski resort. Can America match that view? Now consider that Saudi Arabia could simultaneous hit 5-10 tourist attractions at the same time in 2026.