Saudi Sovereign Fund Plans to Build `Riviera of the Middle East'

(Bloomberg) -- Saudi Arabia’s sovereign wealth fund plans to build an "ultra-luxury" destination for international tourists in addition to two other mega-projects already planned for the kingdom’s Red Sea coast.

The Public Investment Fund said it will provide the initial funding for the development of "Amaala," a 3,800 square kilometer project that will be focused on "wellness, healthy living and meditation." Private companies will be expected to provide the rest of the funding and operate the project’s facilities, the fund said in a statement late on Wednesday, without specifying the scale of investment.

Amaala will join an ambitious list of mega-projects that Saudi Arabia’s PIF has committed to as 33-year-old Crown Prince Mohammed bin Salman tries to bolster non-oil revenue and attract foreign investors.

The fund has already announced plans for another tourism development called the Red Sea Project and is spearheading efforts to develop Neom, a $500 billion futuristic city being built from scratch. Critics say past mega projects by previous monarchs have struggled to get off the ground or add value to the kingdom’s economy.

"All of the developments on the Red Sea are intended to coexist in a complementary manner," the PIF said. “The new destination is a natural extension of the Mediterranean Sea, and dubbed the Riviera of the Middle East.”

While Saudi Arabia has been largely off limits to tourists for decades, authorities are in the process of devising a visa for tourists and are focusing on the industry as part of the crown prince’s plan to overhaul the economy.

The sovereign wealth fund described Amaala as the "newest destination on the jet-setter map," with hotels and private villas alongside arts, sports and culture offerings, plus marinas and a yacht club. It did not make clear whether alcohol -- banned in the kingdom -- will be on offer, to what extent gender mixing will be allowed, or if tourists will be expected to follow any dress code.

The area will have its own airport, 2,500 "luxury hotel keys," 200 retail establishments and 700 villas, the PIF added. It will be open to international as well as domestic tourists and is projected to generate 22,000 jobs -- a crucial figure for Saudis grappling with the highest unemployment level in more than a decade.

The chief executive of the project, located in a nature reserve on the northwestern part of the coast, will be Nicholas Naples, previously head of Integrated Resorts International in Hong Kong.

©2018 Bloomberg L.P.

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