As Saudi Arabia launches a major push for tourism, we talk to one of the main developers about how they are approaching things differently.
John Pagano is CEO of Red Sea Global, a developer owned by the Public Investment Fund of Saudi Arabia, which is behind The Red Sea and Amaala tourism destinations in Saudi Arabia.
What is Red Sea Global?
It’s a new kind of real estate company that is approaching development in a different way to the past by focusing on regenerative development. We recognise that nature is our most valuable asset and sustainability is no longer enough; we’re trying to proactively make a destination better than we found it. It’s about being very judicious about where and how you develop, guided by nature and science.
We started with The Red Sea project, then acquired Amaala and a number of other projects on the west coast of Saudi Arabia. Our first two resorts, Six Senses Southern Dunes and The St. Regis Red Sea Resort, are already taking bookings, and soon to be joined by the Ritz-Carlton Reserve.
We have an ambitious first phase, with 16 hotels in The Red Sea and eight in Amaala – all of which are going to open by the end of 2024 or beginning of 2025. This includes our own luxury 73-key Shebara resort.
What have been the main challenges?
Remoteness of our location. It’s protected, pristine and beautiful, but accessibility is a challenge. The lack of infrastructure has also been a blessing and a curse. It’s expensive and you have to build everything from scratch, but we can do something that’s never been done before and do it right.
RSG has a huge focus on sustainability. How is this mission being implemented and achieved?
We want to demonstrate that you can build a destination with 100 per cent renewable energy, powered by sunshine 24 hours per day. We’ve installed 760,000 solar panels, and have the biggest fleet of electric buses and EV charging network in Saudi Arabia.
It costs more, but an increasing number of people are interested in responsible travel. If you can behave as you want, but do so in a place where you know you’re not impacting the environment, that’s a winning formula. I’m conscious of criticism that we’re greenwashing, but we report everything we do. We’re not going to succeed in everything, but we will damn well try. I think we’ll have more successes than failures.
How important is the Red Sea International airport?
Hugely important because of where we are. We’re 500km from Jeddah, 1,500km from Riyadh. We need airlift but we’re trying to do it in a different away. We’re limiting the number of visitors to 1 million per year and the airport is powered by 100 per cent renewable energy. We’re also trying to be net zero in our operations, so our ground handling equipment and buses are all electric.
I have to deal with the obvious conflict against our regenerative objectives in that we’re talking about bringing people in by plane. We’ll be the first airport in Saudi Arabia that’s going to offer sustainable aviation fuel. It’s a step in the right direction, and the fastest way that aviation can start to address its carbon emissions.
Saudi Arabia is an active new tourism destination. What’s behind this shift from a country previously closed to the international community?
Saudi Vision 2030 is driving this, and it’s about diversifying the economy. Historically, tourism has been one of the most important economic sectors globally. On average it’s more than 10 per cent of the world’s GDP. When we started this journey in Saudi, tourism represented a mere 3 per cent of its economy.
Our goal is to give tourism a bigger representation in the overall economic mix for the country. It creates jobs, brings people in and retains spend in the country. Saudi doesn’t have leisure tourism so we’re fulfilling that gap. It’s a relatively thin playing field at the moment, so there’s room for us to build destinations and pick up a lot of that spend.
What kind of traveller are you hoping to attract?
Our ultimate ambition is roughly 50/50 domestic/regional and international. We don’t anticipate that drop off in demand that the UAE gets during the summer due to the heat. The Red Sea coast has a totally different microclimate. Average summertime temperatures are in the mid-to-low thirties, and the climate is more like the south of France or Italy. It’s a year-round destination and a place rich in history and culture, ºwhere civilisation started, and has beautiful islands and thriving coral reefs.
Travellers in the past have had to observe rules such as not drinking and wearing appropriate dress. Are these rules being relaxed?
The norms are already changing in Saudi Arabia. I can’t tell you how dramatically the country is today from when I arrived six years ago. The country has opened up, the youth has really risen and embraced what’s happening with Vision 2030.
Western attire will be perfectly acceptable within the destination. If you travel throughout the country then you would be expected to respect the culture of the place you’re visiting.
Saudi Arabia has had a reputation for human rights issues. How is the country addressing this?
Things don’t happen overnight. Which country hasn’t had human rights issues? The UK, the US – they’re not clean in their reputations. I don’t experience the human rights issues in Saudi. Maybe once upon a time, but today it’s like normal society.
