Saudi Arabia seeks funding for new developments

Park Inn by Radisson Makkah Aziziyah
The Park Inn by Radisson Makkah Aziziyah is Radisson Hotel Group's second hotel in Makkah, Saudi Arabia. Photo credit: Radisson Hotel Group

Saudi Arabia's Red Sea Development Co.—a closed joint stock company owned by the Public Investment Fund, Saudi Arabia’s sovereign wealth fund—reportedly has started discussions with local lenders to acquire $3.5 billion in what would be its first borrowing. The funds would go toward development along the country's Red Sea coastline in a bid to reduce dependence on oil, Bloomberg reported.

“We are in active discussions with a number [of] banks to provide debt financing and are encouraged by the overwhelming positive response we have received," Jay Rosen, head of finance and investments at the Red Sea Development Co., told Bloomberg. According to the report, the loan would have a 15-year tenor and is likely to be backed by the Public Investment Fund, although the terms of the financing could still change.

According to Red Sea Development's website, the Red Sea Project will "respond to international global tourism trends as well as capturing a share of the SAR62 billion in outbound tourism spend from Saudi Arabia." The destination will operate as a Special Economic Zone, with its own laws and regulatory framework that will "encourage investment opportunities and commercial activities."

Virtual Event

HOTEL OPTIMIZATION PART 2 | SEPTEMBER 10 & 24, 2020

Survival in these times is highly dependent on a hotel's ability to quickly adapt and pivot their business to meet the current needs of travelers and the surrounding community. Join us for Optimization Part 2 – a FREE virtual event – as we bring together top players in the industry to discuss alternative uses when occupancy is down, ways to boost F&B revenue, how to help your staff adjust to new challenges and more, in a series of panels focused on how you can regain profitability during this crisis.


The first phase of the Red Sea project is expected to be completed by 2022. In total, the project is meant to cover 90 islands and 11,000 square miles.

Saudi Arabia also lis ooking to spend $500 billion on a new city along the northwest coast. Neom will be a luxury destination with high-end hotels and villas alongside entertainment and athletic facilities. 

Branded Growth

The development plans come as global hospitality companies seek to gain ground across the kingdom. The number of Hyatt properties in Saudi Arabia, for example, is poised to double by 2023, with five additional Hyatt-branded hotels in the pipeline.

Last month, Radisson Hotel Group opened its second upper-midscale Park Inn property in Makkah (also known as Mecca), weeks after signing the second Radisson Collection hotel for the country.

Around the same time, IHG signed its second Voco for the country, the company's fourth hotel in Makkah.

Suggested Articles

Englender, managing director at the FF&E and OS&E procurement firm, talked about how his company is evolving in the midst of the pandemic.

The company will introduce the antimicrobial and antiviral Surface-Guard Technology on select Sealy products beginning in early 2021. 

The first HospitalityVIEW meeting reached a consensus that technology innovation will be a driving force to lead the industry out of the downturn.