Saudi Arabia has launched a US$5 billion strategic partnership with Hong Kong-based hotel operator Regal Hotels International and property investment firm Cosmopolitan International Holdings, as part of its push to expand tourism and diversify away from the oil industry.
The Ministry of Investment of the Kingdom of Saudi Arabia (MISA) signed a memorandum of understanding (MOU) on Thursday with Regal Hotels and Cosmopolitan International to establish a framework for cooperation between the parties, pooling their expertise to promote green tourism and hospitality projects in mainland China, Saudi Arabia and Hong Kong.
“With this partnership, we aim to explore opportunities in hotel development and hotel management and green tourism in Saudi Arabia,” said Ahmad Jamal, director of tourism at MISA, at a media briefing on Thursday afternoon.
“I am very confident that this is one of many initiatives yet to come, which will benefit Saudi Arabia and Hong Kong and the rest of China,” said Jamal.
The aim of the MOU is to acquire, develop and manage a network of sustainable hotels, serviced apartments and centres of innovation under the “iclub” brand of Regal Hotels, according to a joint statement.
The agreement comes amid warming ties between Riyadh and Beijing, with Hong Kong acting as a “value-added superconnector” between the two, according to the city’s Chief Executive John Lee Ka-chiu. Lee was in Riyadh in February, soon after a December 2022 visit by China’s President Xi Jinping.
Earlier this month, more than 1,000 participants thronged the Hong Kong stock exchange’s Connect Hall at Exchange Square for the Future Investment Initiative Priority summit, in the biggest gathering of Saudi government ministers and business executives ever assembled in the city.
In April 2016, Saudi Arabia launched its Vision 2030, a comprehensive reform plan aimed at diversifying the economy, modernising culture, and attracting international tourists.
“As a Hong Kong-based operator, we are strategically positioned to facilitate technology transfer and knowledge exchange between China and the Middle East, leveraging Hong Kong’s strategic position as a superconnector and as a global green tech and finance centre,” said Poman Lo, vice-chairman of Regal Hotels International at the media briefing.
“With a preliminarily estimated size of US$5 billion for the MISA partnership, we are excited to explore partnership opportunities with both public and private investors,” said Lo, adding that they hoped to launch around 30 hotels under Regal’s “iclub” brand in Saudi Arabia.
Regal Hotels and Cosmopolitan will also evaluate opportunities to invest in an asset management platform through joint ventures, investment funds, as well as publicly-listed companies in Saudi Arabia and Hong Kong, with the aim of fostering tourism, innovation and technology exchange between China and Saudi Arabia.
“We look forward to working with MISA and ecosystem investors to launch an asset management platform for acquiring and developing a sustainable network of ‘iclub hotels’ and innovation centres,” said Jimmy Lo, vice-chairman of Cosmopolitan International.
“Tourism is a key sector of investment as we drive towards Vision 2030,” said Saleh Al-Khabti, MISA’s deputy minister of investment in a statement accompanying the MOU.
“In 2022, Saudi Arabia attracted more than 18 million inbound visits, more than any other Arab nation, and with an estimated 11 per cent annual growth rate over the next decade. We look forward to exploring new opportunities with Regal Hotels and Cosmopolitan as we look to elevate our tourism products and services in the kingdom,” said Al-Khabti.
Saudi Arabia has been attracting hoteliers from Hong Kong as part of a push to improve the sector at home. Hong Kong-headquartered Shangri-La Group opened a hotel in Jeddah in February 2022. The Langham Hospitality Group announced plans last December to open a hotel in Diriyah in Riyadh in 2026.
The Mandarin Oriental Hotel Group has also signed an agreement to operate the Al Faisaliah Hotel in Riyadh, which is undergoing renovation and scheduled for completion in January 2024.