“Saudi Vision of 2030” aims to diversify Saudi Arabia’s economy, and reduce its reliance on the oil industry by stimulating growth within non-oil sectors and expand entertainment and tourism offerings.
Story Outline
The Saudi Arabian Leisure and Entertainment Market is expected to grow at a CAGR of ~15% from 2022 to 2027.
- The young population of the Kingdom provides a promising consumer base for the leisure and entertainment market.
- To cater to the demand created by the change in preferences and increased consumer spending on immersive entertainment, Saudi is seeing large amounts of investments in the entertainment industry.
- The focus on the enhancement of the Entertainment Industry is both an attraction to increase tourism as well as a byproduct of increased tourism.
- The integration of technology in each vertical makes it vital for the private as well the public sector in the Kingdom to invest in the technology sector.
Introduction
The Kingdom of Saudi Arabia is a potential hub spot for all things entertainment and leisure. The Kingdom’s intense focus on developing the entertainment and tourism sector solidifies the double digit CAGR from the year 2023 to 2027. Some key factors contributing to this growth are the high ratio of the young and middle-aged population who are tech savvy. The increased share of spending on leisure and entertainment due to increased disposable incomes and an experience mindset. The country falls on the higher spectrum of a replacement level fertility rate, with 2.208 births per woman.
1. KSA’s Youthful Demographics
KSA, having more than 80% urbanized population displays a demographic phenomenon known as the “Stationary Pyramid” with a tapering top indicating a high young and working population vs a low older population.
With ~ 37% of the population falling below 24 years of age in 2022, and ~50% population falling in the 24-54 years age group, KSA promises a bright future for the Leisure and Entertainment Industry.
The country falls on the higher spectrum of a replacement level fertility rate, with 2.208 births per woman.
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According to Ken Research, the Saudi Arabian Leisure and Entertainment market is expected to grow at a CAGR of ~15% from 2022 to 2027. The largest contributor to this has been the OTT industry followed by the movie theatre industry.
2. Saudi Arabia Invests Big in Entertainment Industry
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Headed by Crown Prince and Deputy Prime Minister, Mohammed bin Salman, the $64 billion fund as a part of the public investment Fund (PIF) established in November 2019, linked to the National Development Fund (NDF), aims to enhance the entertainment and amusement industry in the Kingdom.
Saudi Arabia’s Cultural Development Fund officially launched its $234m (SAR 879m) Film Sector Financing Programme in the first half of 2023. The fund is split in a 30:70 ratio, with 30% being earmarked to help establish companies and facilities supporting the film sector and the remainder for film content development, production and distribution.
Saudi unveiled it tax rebate for productions which provides up to 40% of spend in cash back for film productions that recruit Saudi crew and talent above and below the line and feature the kingdom’s “culture, history and people along with showcasing the kingdom’s diverse selection of landscapes.
3. Saudi Arabia’s Vision 2030 Unleashes Mega Tourism Projects
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Under Saudi Vison 2030, the country has taken the initiative of developing the tourism sector in the Kingdom. The upcoming project of Qiddiya Entertainment City, spanning over an area of 334 sqkm located only 40 km from the nation’s capital Riyadh is about 3 times larger than Disney World Florida.
The Red Sea Project, situated on the coast of the Red Sea between the cities of Umluj and Al Wajh, stretches across 28,000 sqkm, roughly the size of Belgium. It aims to leverage on some of the Kingdom’s most unique natural treasures, offering various inland and off-land hospitality options, coupled with leisure and recreational facilities. It aims to house.
Amaala, the riviera of the Middle East is situated round 800 km north of Jeddah and stretches 12 km along the northwestern coastline of KSA. Centered on the themes of wellness & sports, luxury art residences and sea, sun & lifestyle, it aims to become an ultra-luxury resort and wellness destination, ensuring sustainability and preserving the unique natural surroundings.
4. Driving Technological Advancements: Saudi Arabia’s Vision 2030 and Innovation Initiatives
The country focuses on developing the technology sector as part of its Vision 2030 initiative. There has been a surge in venture capital investments in Saudi Arabia amounting to $ 2.4 billion in 2022 to drive startup growth. The Saudi Light and Sound (SLS) Expo featured exhibitors from the pro-lighting and audio, live events, digital signage, AI, laser technology, and stage technology sector. Saudi Arabia hopes to position itself as a world leader of next generation media tech innovation under its smart-city mega-project NEOM.
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Conclusion
Saudi Arabia, with its urbanized population holds a promising future for the Leisure and Entertainment Industry. Supported by a $64 billion fund and visionary leadership, the country aims to enhance the entertainment sector. Initiatives like the Film Sector Financing Programme and tax rebates for productions demonstrate the commitment to nurture local talent and showcase the kingdom’s cultural heritage. Moreover, the development of mega-projects like Qiddiya Entertainment City, The Red Sea Project, and Amaala underscores Saudi Arabia’s dedication to tourism, offering unique experiences and preserving natural beauty. With a focus on technology and significant venture capital investments, Saudi Arabia strives to become a global leader in innovation.