PREPARATIONS FOR TOURISM IN WESTERN SAUDI ARABIA

C O N F I D E N T I A L SECTION 01 OF 04 JEDDAH 000221

SIPDIS

SIPDIS

RIYADH, PLEASE PASS TO DHAHRAN; DEPARTMENT FOR NEA/ARPI;
PARIS FOR ZEYA; LONDON FOR TSOU; AMMAN FOR WHITTLESEY

E.O. 12958: DECL: 03/12/2015
TAGS: BTIO ECON KICR KISL KWMN PREL SA SENV
SUBJECT: PREPARATIONS FOR TOURISM IN WESTERN SAUDI ARABIA

Classified By: Consul General Tatiana Gfoeller, for
reasons 1.4 (b) and (d).


1. (C) SUMMARY. On February 26, Consulate staff met with
the new General Manager of the Supreme Commission for Tourism
(SCT) in Jeddah. The General Manager offered an ambitious
vision for developing tourism in Jeddah and attracting
business, religious, and recreational visitors. The SCT
plans significant development of infrastructure, training,
and event management. A large recreational enclave is
contemplated to serve visitors. Private Saudi investment is
already being committed in addition to government budgetary
support. The SCT is actively interested in obtaining advice
and support from U.S. businesses and consultants. The
General Manager expressed interest in pursing World Heritage
status for Saudi sites and supports environmental
conservation. END SUMMARY.


2. (U) On February 26, Jeddah Pol/Econ Chief and Pol
Assistant paid a call on Emad M. Mugharbel, the newly
appointed Executive Manager of the Supreme Commission for
Tourism (SCT),Jeddah Governate, in the Commission's
temporary offices on the grounds of the Jeddah Sheraton
Hotel. Mugharbel offered his vision for the expansion of
tourism in Jeddah, as well as enumerating obstacles to
developing this sector and plans for overcoming them.

BIOGRAPHICAL NOTE: EMAD M. MUGHARBEL


3. (C) Emad M. Mugharbel is in his mid-forties. An
aggressive modernizer, Mugharbel referred to himself as a
radical reformer. He has held a number of increasingly
important positions in business and as advisor to senior
Saudi officials. He was hand-picked for his current position
by Governor of Jeddah, Prince Mishal bin Majid bin Abdulaziz.
His previous posts were:

May 2004-Feb. 2006 Chief Executive Officer
Jeddah Marketing Board,
Jeddah Chamber of Commerce and Industry
2002-May 2004 Deputy General Manager, Kingdom Holding,
TCCL, Kingdom Center
2000-2002 General Manager, GTC Olayan
1998-2000 General Marketing Manager, Arab Radio and
TV (ART) Cairo
1994-1998 General Manager, Marketing Management
Consultants, Charisma
1992-1994 Assistant Genral Manager, Savola Europe,
AVOLA GROUP
1988-1992 Proctor and Gamble, Saudi rabia
Mugharbel was educated at the University o California,
Riverside and graduated from Arizon State University, Tempe.

THE SUPREME COMMISSIO FOR TOURISM COMES TO JEDDAH


4. (U) The Suprem Commission for Tourism was established by
Royal Decree Number 9 on April 16, 2000. The SCT was founded
as an independent body to coordinate and develop all facets
of tourism in Saudi Arabia. The Commission is headed by
Prince Sultan Bin Salman Bin Abdulaziz and is funded by the
national government. Surprisingly, Jeddah, the most
cosmopolitan area in Saudi Arabia, is one of the last regions
to open an SCT office. Until now, many of the duties
assigned to the SCT were performed by the Jeddah Chamber of
Commerce and Industry (JCCI) and its affiliate, the Jeddah
Marketing Board (JMB),where Mugharbel was General Manager.

SCT PLANS FOR JEDDAH


5. (U) The role of SCT in Jeddah, in Mugharbel's view, is to
coordinate and lead activities between the government and the
private sector to promote travel and tourism in Jeddah.
Mugharbel recognizes that tourism is a potentially important
source of revenue for Jeddah and Saudi Arabia. He also
acknowledges that tourism is a labor-intensive field which
could offer work to a significant number of Saudis.

TARGET MARKETS: SAUDIS AND GCC, HAJJ AND UMRAH, AND NON-ARABS


6. (C) Mugharbel's primary target market is domestic
travelers, among which he includes residents of the Gulf
states, as well as Saudi Arabia. He noted that Saudi

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tourists spend billions annually when traveling abroad,
especially in the summer. He hopes to divert some of this
revenue to Jeddah. A second major market is travelers from
other Muslim countries. As he succinctly observed: "with
hajj and umrah there are millions coming here anyway." He
wants to offer them other attractions while in Jeddah.

NON-MUSLIM MARKET


7. (C) Although clearly subordinate to the preceding two
markets, Mugharbel is also interested in encouraging travel
by non-Muslims and residents from non-Arab states, and he
intends to tap portions of this market almost immediately.
For this particular market segment, in addition to the
business traveler, he intends to focus on limited, but high
value interests such as diving and eco-tourism. These narrow
markets have a number of attractive aspects: they are
generally high profit-margin activities; they can be
conducted in a relatively restricted area along the coast,
where they won't impinge on the more conservative populations
in the Kingdom, and they are in geographical proximity to
other tourist areas, such as Sharm el-Sheikh, and have access
to a major port-of-entry.

OBSTACLES


8. (C) Mugharbel candidly admitted that serious deficiencies
in infrastructure and information are fundamental obstacles
to capitalizing on Jeddah's potential. He complained that
the tourism sector in Jeddah is roughly 15 years behind where
it should be. The infrastructure in Jeddah is woefully
behind major tourist facilities throughout much of the world:
there are insufficient first-class hotels, few conference
facilities, and public transportation is non-existent. The
lack of trained personnel is another major problem. No
education or training in serving tourists' needs is available
in the Kingdom. Information on events and facilities is not
accessible to travelers. Finally, visas for foreigners not
on pilgrimage or sponsored business trips have been
unobtainable.

DEVELOP JEDDAH "BRAND"


9. (C) Mugharbel is anxious to rectify these deficiencies.
He is aggressively pursuing development plans, apparently
with substantial support from the Governor. His first
objective is to "brand" Jeddah in partnership with major
businesses and identify and develop events which could be
exploited. He confided that Prince Mishal is so
enthusiastic, he would like to stage an event every week.
Less ambitions, perhaps than the Governor, Mugharbel is
planning to have at least 30 major events every year in
Jeddah. He has taken the Jeddah Economic Forum (JEF) as a
model and intends to develop other conferences which will
attract global business interests. He offered the example of
conferences on chemical engineering or petrochemicals
attracting specialists from throughout the world. (Note:
While attending the recent JEF, the Consul General overheard
two prominent businessmen talking and one commented that
Jeddah needed an event like JEF every month. End Note.).

RECREATIONAL TOURISM


10. (C) To complement business events, the SCT plans to
promote recreational tourism. This would provide pilgrims
and business travelers with additional attractions to
patronize while in Jeddah and offer a destination for the
purely recreational tourist group or individual. SCT is
focusing on specific, narrow market segments. Eventually the
Commission hopes to exploit the archeological and historical
sites abounding in Western Arabia, but the initial target
will be diving and eco-tourism. In an effort to promote
diving, the Commission is engaged in making a film "Jeddah
Underwater" to promote the submarine attractions of the
region.


"TOURIST CITY" IN PLANS


11. (C) As a major attraction in the future, Mugharbel
revealed that the Kingdom is planning to build a "tourist"
city to complement the planned King Abdullah Economic City

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(KAEC) near Yanbu. This recreational complex, which is
expected to encompass several square kilometers, is planned
to be constructed along a stretch of pristine beach in the
vicinity of the town of Leith, not far from the site of KAEC.


VISITOR VISA EXPECTED BEFORE SUMMER


12. (C) Historically, obtaining visas had been an
insuperable barrier for prospective travelers to Saudi
Arabia. However, Mugharbel noted that recent changes in
government policy for business travel had obviated the need
for a sponsor, and now business travel is possible without
hindrance, and he expects the government to allow issuance of
general visitor, or tourist, visas before this summer.

HOSPITALITY TRAINING SCHOOL SEEN FOR ARABIA AND AN EQUAL ROLE
FOR WOMEN


13. (C) Mugharbel wishes to establish a training institute
for tourism-related activities in Jeddah to prepare local
people for jobs in the industry. He considers the
participation of women in this field a non-issue. When the
matter was broached by Pol/Econ Chief, he described a meeting
with the Governor a few days earlier in which the latter had
said "I don't care if it is a man or a woman, show me the
product."

U.S. BUSINESS OPPORTUNITY


14. (C) Although U.S. tourism is likely to be a small and
probably distant prospect, Mugharbel sees a major role for
U.S. assistance. The immediate opportunity for U.S.
businesses would be to provide expertise and support. The
tourist offices operated by many U.S. city and state
governments are a model for what he wants the SCT to do in
Jeddah. He expressed a willingness to work with FCS to find
potential partners. When asked about his needs, he said
"What I would really like is for you to send every event
planner in the country." In a more practical vein, he
suggested that FCS or other entities sponsor specialized
delegations of 40-50 persons that have specific interest or
expertise in event management, hospitality training,
facilities operations, eco-tourism and maritime activities
who would then meet with a similar number of Saudis.

POSSIBLE SUPPORT FOR WORLD HERITAGE SITE DESIGNATION


15. (C) Mugharbel was receptive to the idea of seeking World
Heritage status for sites in Jeddah Governate, especially the
Red Sea. (Note: Natural habitats would be a less
controversial choice for this designation, in contrast to the
sensitive, cultural monuments, such as Mecca or pre-Islamic
sites. End note).

PARTNER IN CONSERVATION


16. (C) Mugharbel spoke warmly about the need to conserve
Saudi natural resources, particularly the Red Sea. He
offered an example of what small expenditures could do to
preserve this resource. He noted that local maritime
traffic, fishing boats, etc. damage the delicate coral reefs
tens of thousands of times each year, just by the act of
anchoring. A modest investment in mooring buoys could
alleviate much of this damage. COMMENT. Mugharbel obviously
recognizes that Saudi Arabia's natural resources are a
valuable tourist resource. His assistance could be sought to
support conservation initiatives in tandem with the
Presidency for Meterology and the Environment (PME),The
Regional Organization for the Conservation of the Environment
of the Red Sea and Gulf of Aden (PERSGA),or similar
organizations.

HEJAZ-NEJD DISTINCTION


17. (C) In the course of the conversation, Mugharbel like so
many other Hejazis made a joke about the radically different
way Nejdis and Hejazis look at the world, to the detriment of
the "backward" Nejdis.

PRIVATE INVESTMENT IS ALREADY INVOLVED


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18. (C) Our conversation was briefly interrupted by a
telephone call from Jack Barnett, a former colleague of
Mugharbel's from the JMB. Barnett is being backed in the
formation of a company, to be called Saudi Events Company,
which will undertake to organize major business and
recreational events in Jeddah. The company is being
capitalized at $25,000,000 by influential Saudis.


19. (C) COMMENT. Mugharbel appears committed to developing
tourism in Jeddah and has the backing of influential Saudis.
Tourist traffic would contribute to opening Saudi Arabia to
outside influences and provide badly needed employment to
young Saudis. SCT sponsored activities could also offer
commercial opportunities to U.S. businesses. Realistically,
security considerations and cultural restrictions make Saudi
Arabia an unlikely destination for general U.S. tourism;
however, a booming economy makes Jeddah an important stop for
U.S. business people. American Muslims and sophisticated and
adventurous travelers could conceivably also be attracted to
the area. END COMMENT.
Gfoeller