Boston, MA -- (SBWIRE) -- 01/27/2014 -- BMI View: The Saudi Arabia Tourism Report examines the significant long-term potential offered by the tourism industry, but highlights the potential downward pressure that regional uncertainty could have on arrival numbers as the political landscape changes.

One key development has been the news that Saudi Arabia is easing its visa regime. BMI believes this is a highly positive development for the sector. In November 2013 the country announced a relaxation of visa restrictions on overseas visitors, allowing foreign nationals travelling to the country for pilgrimage to stay for a longer period of 30 days. Under the 'Extended Umrah Tourism Programme', launched in December, the Umrah (pilgrimage) visa will be converted into a tourist visa upon expiry. This marks a significant step forward in Saudi Arabia's tourism ambitions: the authorities have not issued tourist visas to visitors until now, limiting entry for most nationals outside the Gulf Cooperation Council (GCC). Some 65 countries will reportedly be eligible for the scheme. Although a precise list has not yet been announced, it is likely to include most Muslim countries.

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It can be argued that Saudi Arabia had been somewhat slow to develop its tourism sector, with limited investment and marketing to-date. However, momentum has picked up in recent years under the leadership of Prince Sultan bin Salman, president of the Saudi Commission for Tourism and Antiquities (SCTA). By developing the religious tourism and business travel sectors, the government hopes to encourage economic diversification and create job opportunities for Saudi Arabian nationals, who remain reluctant to move away from the public sector.

BMI expects religious visits to remain one of the main drivers for the tourism industry over the medium term. Saudi Arabia is home to Makkah and Medinah, two of Islam's holiest cities, and every year millions of Muslims come to Mecca for the Hajj, the largest annual pilgrimage in the world. 1.38mn foreign pilgrims performed the Hajj over 2013, down by 21% year-on-year (y-o-y), due to health fears and ongoing construction projects, but still a substantial customer base. The authorities' move to create a tourist visa for religious visitors and extend their stays could therefore provide a strong boost to tourism receipts.

As well as boosting international tourism, Prince Sultan bin Salman also wants to boost domestic tourism, in an effort to capture some of the capital spent by the millions of Saudi Arabians who travel abroad each year, mainly to other countries in the Middle East. Speaking in December 2013, the SCTA president said that the tourism sector continues to receive the full support of the government, saying that 2014 is set to witness 'a major shift' in the Kingdom's tourism industry, according to a report in Arab News.

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