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In the midst of its global and domestic investment spree, Saudi Arabia’s Public Investment Fund has declared a loss on investments of US$11bn for last year
Tom Anstey | Planet Attractions | 12 Jul 2023
Saudi’s Crown Prince Mohammed bin Salman has made the Public Investment Fund a central part of plans to modernise the kingdom, with tourism playing a huge role in that development
Saudi Arabia’s Public Investment Fund (PIF) - one of the world's largest sovereign wealth funds and the main financial backer behind a multitude of projects in the kingdom - saw a loss of US$11bn (€9.8bn, £8.4bn) in 2022.
After becoming the sovereign fund in 2016, the PIF has embarked on a global investment spree, also funding numerous projects within the kingdom itself.
Down from a profit of US$19bn (€17.8bn, £14.6bn) generated in 2021, the PIF still holds significant assets, which are worth US$778bn (€699.5bn, £599.1bn) - an increase from US$676bn (€607.5bn, £520.5bn) in 2022.
Owned by the PIF, Saudi Entertainment Ventures (Seven) has announced plans to develop a number of major projects, including a more than SAR1bn (US$266.4m, €244.7m, £215.7m) state-of-the-art entertainment destination in the city of Tabuk. Overall, Seven is investing SAR50bn (US$13.3bn, €12.84bn, £11.07bn) across 21 integrated entertainment destinations in the country with more than 150 innovative attractions to open across 14 different Saudi cities.
Seven is also bringing a number of major IPs to Saudi Arabia, with announcements for Transformers, Play-Doh and Warner Bros Discovery-themed attractions.
The PIF is also behind a new SAR180bn (US$48bn, €45.5bn, £40bn) project that will see the development of New Murabba, a new commercial downtown area in Riyadh. Dubbed ‘the new face of Riyadh’, New Murabba has been described as a ‘unique living, working and entertainment experience’ and is set to become the largest modern downtown in the world, spanning more than 19sq km (7.3sq miles) and anchored by a cube-shaped skyscraper.
The PIF-owned Red Sea Global is also working on a number of major tourism-focused projects in Saudi Arabia. Recently announcing a sponsorship deal with the Saudi Pro League’s also PIF-owned Al-Ahli Football Club, in addition to three tourist resorts, the developer is working on a further 13 hotels that will open in 2024. Upon full completion in 2030, the Red Sea destination will comprise 50 resorts with up to 8,000 hotel rooms and an array of visitor attractions across 22 islands and six inland sites. Features include luxury marinas, golf courses, entertainment, F&B and leisure destinations.
A jaw-dropping project that will transform a former oil rig in the Arabian Gulf into a theme park resort is another major PIF project, with the new attraction set to feature three hotels with a combined 800 bedrooms, 11 restaurants and several helipads, as well as a host of attractions including a rollercoaster, bungee jumping, go-karting, a waterpark, a Ferris wheel, zip-lining, actual skydiving and even submarines.
The PIF also has its eye on the cruise sector, establishing a company called Cruise Saudi in Jeddah to develop cruise ports and terminals in a number of Saudi cities, allowing better access to the country for the wider cruise and tourism industries.
These projects only represent a handful of the PIF’s investments in the kingdom. With developments worth more than US$1tn (€921.7bn, £787.7bn) already underway, there are plans to invest a further US$800bn (€737.3bn, £630.4bn) in tourism projects over the next decade.
These PIF-led efforts are the result of Saudi Arabia attempting to reduce its reliance on oil by reinvesting in tourism. Tourism in the kingdom last year counted for 4.5% of the country’s annual GDP - an increase of 1.5% from 2019. By the end of the decade, Saudi wants to bring tourism contributions to its GDP up to 10%.
These grand investments by the PIF and the kingdom seem to be paying off. Under its 2030 Vision plan, Saudi has set a target to hit 100 million visitors annually by 2030. In 2022 the country welcomed 77 million domestic travellers and 16.5 million international travellers – 93.5 million in total. As a result, the country’s tourism authority is planning to extend that figure beyond its original target.
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