The giga-projects initiative in Saudi Arabia, part of that country’s ambitious Vision 2030 program, is one of the largest tourism-related infrastructure projects the world has ever seen.

It is providing huge opportunity for mostly branded hotel companies to either enter the country or to create their first notions of scale.

Ed James, head of content and research for the Middle East at business advisory MEED, said Saudi Arabia has become the “most discussed projects markets in the Middle East, a very significant capital expenditure program.”

Tourism is a big part of Vision 2030, the kingdom's overarching plan to create projects that create and grow economic, social and cultural diversification for the country. The giga-projects are massive multi-use developments planned to incorporate elements like entertainment, wellness, culture, technology and more, all at mega-scale.

Sources told Hotel News Now the Saudi capital Riyadh will one day take over from Dubai as the region’s premier center for company headquarters from all business sectors.

James said capital investment earmarked for the five official giga-projects totals approximately 1 trillion Saudi riyal ($26 billion) by the end of 2026. One of the giga-projects, NEOM, so far is incorporating the lion’s share.

Philip Wooller, director for the Middle East at STR, CoStar’s hotel analytics division, said there is little doubt that Saudi Arabia is the most exciting destination on the planet.

“By far and away [it has] the most remarkable projects, and it doesn’t just end with the giga-projects. The entire country is going through the most remarkable transformation, and in 10 years time, you could quite easily see it as one of the most important countries in the world economically, politically and from a tourism point of view,” he said.

He added the country’s rulers have a target of 100 million visitors per year.

“I’m not sure that will happen, but they won’t be far off,” he added.

Sustainability and renewable energy are a focus of the giga-projects, with the hope that with vast amounts of territory and large pools of capital, this is an energy-related project that can be done in the right way economically, legally and environmentally.

James said the country now is able to provide opportunities for international business, with new laws passed allowing 100% ownership in some sectors.

The country’s sovereign-wealth fund, the Public Investment Fund, is spearheading everything, but there are opportunities for partnerships and outright ownership, he said.

“Gone are the days in which it takes six months to open a bank account or get WiFi. For some projects, [firms] can be registered within 24 hours and start receiving requests for proposals immediately,” he said.

James mentioned other non-hotel projects include new sports stadiums, a new opera house in Jeddah and new rail lines from Jeddah to Riyadh to Damman, between Qatar and Riyadh and between Kuwait and Riyadh and to NEOM, which will also include an international airport and airline to serve it.

The five giga-projects currently are: Diriyah Gate, NEOM, Qiddiya, Red Sea Global and Roshn.

“The crown jewels of Vision2030, and therefore intrinsically linked to Saudi Arabia’s future, will be split between those directly owned and financed by the [Public Investment Fund] from its own $500 billion worth of assets and those owned and funded by the government through private entities,” James said. Non-PIF developments include the Royal Commission for Alula and Royal Commission for Riyadh City.

Riyadh downtown will be transformed into a 7.5-square-mile district to be called New Murabba and to feature a centerpiece named Mukaab, a cube measuring 1,300 feet by 1,300 feet and containing a 985-foot-high spiral tower.

“It is unclear when work will begin or what affect it will have on Riyadh,” James said.

A planned airport for Riyadh will serve 185 million passengers a year with six parallel runways by 2050.

“There will be a lot of local contractors involved, but also some international contractors as there simply is not enough local supply capacity. There appears to be limitless pipeline. There are still many more giga-projects to come, and I would not be surprised if more will be announced in the first half of this year,” he said.

Tourists are expected to come from three sources: domestic travelers; those on hajj, the Muslim pilgrimage to the Holy Cities of Makkah and Medina; and international leisure and business travelers.

Nils Heckscher, partner and head of Africa at business advisory PKF, who also oversees the Middle East, said one challenge is securing the massive amounts of supplies needed for what are enormous projects.

“Some may not be seen completed on time. It is a simple fact that know-how, materials and in the end staff to run these places are not in high supply. Yet, some we’ll see completed on time, no doubt,” he said.

James said developers are using the tools at their disposal to hit deadlines.

“NEOM is employing early contractor involvement contracts to speed up delivery and reduce risk by awarding the design to two or three contracting groups, after which it selects one to carry out construction,” he said.

“Most of the giga-projects' clients are free to employ flexible contracting strategies and do not necessarily have to follow government procurement regulations.

“For example, Red Sea Global does not require tender bonds, has favorable terms, normally 60 days, and variable advance payments,” he added.

James said it will be a struggle to deliver all these projects given the tight deadlines, but there is the will.

“All told, it will become a suppliers’ and contractors’ market,” he said, citing countries such as China, Egypt, India, Turkey and Qatar as highly active.

STR’s Wooller said Red Sea Global is the most advanced in terms of construction, with hotels already opened and three to debut this year.

Although it is not as large as NEOM, its numbers still are staggering and would dwarf most other projects in other countries.

It covers 11,000 square miles, larger than the surface area of all the Hawaiian islands, and a new airport to support it. Thirty-two countries are represented in its suppliers and contractors, and $7 billion of contracts have been award to date, with a further $7 billion to be awarded in 2023.

Hotel brands signed up include Ritz-Carlton Reserve, St. Regis and Six Senses.

Entertainment facilities, deemed lacking in Saudi Arabia, are also a focus — 16 projects are spread around the country with a value of approximately $200 million each.

International events confirmed include the 2029 Asian Games, which is to be held in NEOM.

Even projects not officially named as giga-projects are ambitious initiatives by most markets’ standards.

AlUla is one of those other projects. With a territory of approximately 9,000 square miles, it features a multi-purpose venue of 9,740 mirrored panels designed to blend into the landscape.

So far, three hotels have been signed to it, including a Banyan Tree resort.

More are expected.

Marloes Knippenberg, CEO of Kerten Hospitality, has signed for the resort the Cloud7 Residence, which comprises 150 accommodations bungalows.

She said projects such as AlUla allow sustainability-minded international hotel firms to contribute to the country’s rapidly evolving tourism landscape.

“This development signifies not only the evolution of the tourism industry in [Saudi Arabia] but also showcases the nation’s commitment to diversifying its economy, preserving cultural heritage and embracing sustainable practices. … The country’s focus on developing and conserving cultural and historical sites solidifies its position as an emerging global tourism destination while celebrating its rich history and untapped potential,” she said.

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