Sustainable Horizons: how the Saudi hospitality industry is helping to ensure a clean, green future in the Kingdom

With the spotlight on sustainability like never before, the hospitality industry the world over can – and is – playing a key role in supporting government ESG initiatives and green goals. 

The Saudi Green Initiative, launched in 2021 by His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Crown Prince and Prime Minister, focuses on combating climate change, improving quality of life and protecting the environment for future generations, all in support of Saudi Arabia’s ambition to reach net zero emissions by 2060. Since its launch, 77 initiatives, with an investment of over US$186 billion, have been activated to drive sustainable growth in line with Vision 2030. 

ESG is a key focus of the Future Hospitality Summit Saudi Arabia, taking place at the Mandarin Oriental Al Faisaliah, 29 April – 1 May, with a range of panel debates, expert opinion and initiatives on how KSA’s hospitality and tourism industry of today can play a pivotal role in a sustainable tomorrow. 

“ESG plays such a critical role in the future of hospitality, which is why it’s at the forefront of the FHS programme again this year. It’s vital that we come together as an industry and engage in dialogue to drive sustainable development and investment, and integrate sustainable practices in our business strategies,” said Jonathan Worsley, Chairman, The Bench, organisers of the Future Hospitality Summit.

Ahead of FHS Saudi Arabia, key leaders in the country’s hospitality and tourism sector share insight on how the Kingdom aims to meet its ESG goals, and what their organisation is doing to play its part.

With input from Qusai Al-Fakhri, Chief Executive Officer, TDF;  Elie Milky, Vice President Business Development Middle East, Pakistan, Cyprus, and Greece, Radisson Hotel Group; Fahad Abdulrahim Kazim, CEO, Millennium Hotels and Resorts MEA; Sandeep Walia, Chief Operating Officer Middle East, Marriott International; and Gautam Sashittal, CEO, King Abdullah Financial District (KAFD). 

With the spotlight on ESG and sustainable travel, tourism and hospitality ever growing, what steps are being taken to ensure that Saudi Arabia’s future developments meet the country’s ESG goals?

Qusai Al-Fakhri, Chief Executive Officer, TDF: The global spotlight ESG practices is reaching every industry, and tourism is no exception. Recognising this shift, Saudi Arabia is taking significant steps to ensure its future tourism developments align with its ambitious Vision 2030 and national ESG goals.

Travellers are increasingly seeking destinations that prioritise sustainability. A 2023 study by Booking.com found that 73% of global travellers would be more likely to choose a stay if they knew it followed sustainable practices. The growing public awareness of environmental issues drives this trend and a desire for travel that benefits local communities.

Saudi Arabia's Vision 2030 recognises the importance of a diversified economy that is less reliant on oil. Tourism is a key pillar of this strategy, and sustainable practices are central to its success. The vision emphasises preserving the country's unique cultural heritage and natural beauty for future generations. The Ministry of Tourism and the National Development Fund play vital roles in promoting sustainable practices within the tourism industry. The Ministry has set a target to increase tourism's contribution to the GDP, with a focus on sustainable tourism experiences. The Tourism Development Fund, through its mandate and ESG strategy, also contributes to the national goal of sustainable tourism.

Saudi Arabia's flagship tourism projects, like NEOM and The Red Sea Project, are prime examples of this commitment. NEOM, a futuristic city under development, plans to be powered by 100% renewable energy. The Red Sea Project, a luxury tourism destination, aims to achieve a 90% reduction in waste sent to landfills and is committed to coral reef conservation. These developments directly contribute to several UN Sustainable

Development Goals (SDGs), including responsible consumption and production (SDG 12) and life below water (SDG 14). By prioritising sustainability across its tourism sector, Saudi Arabia is working towards ensuring its future developments meet the country’s ESG goals as a leader in responsible travel.

Elie Milky, Vice President Business Development Middle East, Pakistan, Cyprus, and Greece, Radisson Hotel Group: With Saudi Arabia’s significant milestone in their tourism transformation – reaching 100 million tourists seven years ahead of schedule – the country is taking significant steps to ensure its future developments meet the country's ESG goals, this includes the introduction of guidelines encouraging listed companies to disclose ESG-related information and through initiatives like the Saudi Green Initiative, aiming to reduce carbon emissions by over 270 million tons per year. 

The Vision 2030 strategy underscores the importance of environmental protection, clean energy adoption and climate change mitigation, and with the Saudi Green Initiative, the country is making strides towards achieving its ESG goals.

Fahad Abdulrahim Kazim, CEO, Millennium Hotels and Resort MEA: Millennium Hotels & Resorts is deeply committed to aligning its developments in Saudi Arabia with the country's ESG goals. Our "Millennium’s Green Path Brand Playbook" embodies this dedication by establishing ambitious targets, including a 27% reduction in greenhouse gas emissions by 2030. Through partnerships with local SMEs, we prioritise sourcing goods and services sustainably, fostering community relationships, and minimising our environmental footprint. As active stewards of unforgettable experiences, we joyfully embrace this journey toward sustainability, ensuring that every aspect of our operations reflects our commitment to the planet and the well-being of future generations. At Millennium, sustainability isn't just a concept; it's our guiding principle.

Gautam Sashittal, CEO, King Abdullah Financial District (KAFD): Saudi Arabia has witnessed increasing momentum in terms of the adoption of ESG initiatives. While tourism globally contributes a significant portion of greenhouse gas emissions, exceeding 8%, Saudi Arabia has managed to keep its tourism-related emissions growth rate at a low 2.5% annually between 2010 and 2019, a positive sign for a sector in which the Kingdom is investing close to US $800 billion. For that to continue, we’ll need to keep prioritising circular economy principles and green building practices, leveraging  Saudi Arabia's rich natural landscapes as well as maintaining the collaboration between the government, private sector, and international partners to promote eco-friendly tourism practices.

 

Environmental considerations are becoming more and more important among travellers, how is Saudi Arabia’s hospitality offering attracting green-thinking visitors now – and in the future?

Qusai Al-Fakhri: Environmental considerations are a major deciding factor for today's travellers. Recognising this, Saudi Arabia's hospitality sector is undergoing a transformation to attract eco- conscious visitors. This is achieved through eco-initiatives such as sustainable developments, ecotourism experiences, and a strong focus on conservation to safeguard wildlife and natural habitats. The future of sustainable hospitality will see the adoption of internationally-recognised green certifications, renewable energy integration, and community-based tourism.

Saudi Arabia’s hospitality sector is embracing sustainability, with around 85% of LEED-certified hotels in the MENA region being in KSA under various stages of development (as of June 2023). With green hotels on the rise, KSA can position itself as a destination of choice for conscious travellers, attracting visitors who seek transformative trips while minimising their environmental impact. In recognition of the significant role that consumer demand plays in hospitality, the Tourism Development Fund (TDF) promotes the construction of green buildings across its portfolio of leading hotels and other tourism sector participants to

provide sustainable offerings for visitors from within KSA and across the globe.

Sandeep Walia, Chief Operating Officer Middle East, Marriott International, says that almost eight in 10 travellers from KSA say they would happily pay more to stay in environmentally friendly accommodation, and 79% say that accommodation providers and holiday companies have a responsibility to support the local communities where they offer holidays.

The 2024 Marriott Bonvoy Travel Trends Research study for Saudi Arabia and the UAE shows that, over the next three years, sustainability will be on the agenda like never before. 

Saudi Arabia saw SAR53 billion worth of foreign direct investment in the first nine months of 2023, according to latest data. What role is the tourism and hospitality sector playing in encouraging green investment in line with Vision 2030? 

Elie Milky: While all facets of sustainability are essential, the most pressing priority for our industry is the need to address our environmental footprint, given the scale and nature of our operations. This includes reducing carbon emissions, minimising waste, and conserving resources. As an industry that primarily revolves around physical locations, buildings, and transportation, we have a significant role in driving forward green building practices, efficient energy consumption, and sustainable transportation solutions for our guests. 

Fahad Abdulrahim Kazim: The tourism and hospitality sector in Saudi Arabia is instrumental in driving green investment aligned with Vision 2030. Through initiatives such as the "Hospitality Investment Enablers," developed in collaboration with the Ministry of Investment, efficiency in business operations is elevated, and project success is bolstered. This initiative aims to streamline processes, reduce barriers to entry, and provide necessary support for investors, thereby enhancing the attractiveness of the sector for sustainable investment. With a total of 106.2 million tourists in 2023, reflecting a 56% increase from 2019 and a 12% rise from 2022, the sector demonstrates its potential to drive both economic growth and environmental sustainability. This synergy between tourism development and green investment not only enhances Saudi Arabia's tourism appeal but also accelerates progress towards a more sustainable future, in line with Vision 2030 objectives.  

Gautam Sashittal: The sector has emerged as a key driver of economic growth and sustainability initiatives, surpassing Vision 2030 expectations seven years ahead of schedule, welcoming over 100 million tourists. This presents ample opportunities for green investment, particularly due to the country’s focused efforts towards eco-friendly infrastructure, driving innovation in sustainable tourism practices, and investments in renewable energy projects, including the recent announcement of a US $270 billion investment in low-carbon energy projects by 2030. This commitment to sustainability incentivises responsible investors who prioritise sustainability and ethical considerations to be a part of this environmentally conscious destination. 

What is your organisation’s biggest focus/priority when it comes to sustainable development, green investment and/or regenerative tourism in 2024 and beyond?

Qusai Al-Fakhri: As a development fund, TDF’s primary focus lies in enhancing and fostering the growth of key destinations throughout the Kingdom. TDF understands that the development of KSA’s tourism sector should balance economic growth with environmental preservation and social prosperity, and, as such, has created an ESG strategy that will drive its operations and investment decisions in line with local agendas such as the Saudi Vision 2030 and the Saudi Green Initiative (SGI) and global frameworks such as the United Nations Sustainable Development Goals (UNSDGs). The ESG strategy includes critical areas such as promoting green buildings, renewable energy, waste & circular economy, local businesses and diversity & inclusion. By integrating sustainability into the fund’s long-term purpose, TDF aims to be a leading player in the sustainable development of KSA’s tourism sector.

Elie Milky: Radisson Hotel Group has a history of responsible business since our first environmental policy in 1989. We aim to be Net Zero by 2050 with science-based targets, focusing on enhancing energy efficiency and transitioning to renewables. We offer our guests carbon-neutral meetings and EV charging networks in India and Europe. Our commitment extends to business ethics, supply chain sustainability, reducing carbon footprints, and supporting employability programs. Beyond our boundaries, we lead industry initiatives like Hotel Sustainability Basics and the Pathway to Net Positive Hospitality.

Fahad Abdulrahim Kazim: In today's dynamic hospitality landscape, consumers are placing increased importance on sustainability, transforming it from a "nice-to-have" credential to a critical consideration. Guests now explicitly evaluate a brand's green credentials, scrutinising energy-saving measures, waste reduction initiatives, utilisation of renewable resources, and engagement in community and environmental conservation efforts. Aligning with these expectations, we incorporate sustainable practices into our operations, contributing to a greener, more eco-conscious future. In 2024 and beyond, our foremost focus lies in fostering regenerative tourism practices. Recognising the imperative to mitigate environmental impact while maximising socio-economic benefits, we prioritise initiatives that rejuvenate ecosystems, preserve biodiversity, and empower local communities. By embracing sustainable development principles, such as carbon neutrality, waste reduction, and ethical tourism, we aim to set new standards for responsible travel. Through targeted green investments and collaborations, we aim to drive positive transformation in the tourism sector, crafting destinations where visitors and nature coexist harmoniously, securing a lasting legacy of ecological resilience and community well-being for future generations.

Gautam Sashittal: As a key enabler of Saudi Vision 2030, we realised we had to take bold steps towards energy consumption and climate change for a healthier, more livable urban space and a net zero future. From the outset, we have built KAFD around sustainability, ingrained into every aspect of its design and operations. We're developing an ESG framework for KAFD, focusing on reducing carbon emissions, from energy-efficient buildings, renewable energy sources, and waste management to green spaces and eco-friendly mobility, serving as a model for sustainable development. Our buildings’ rooftops have a high Solar Reflectance Index, boasting energy savings between 10-15% when compared to conventional consumption. We’ve established key collaborations with international conglomerates and local leaders in the field, such as working with Sumitomo to implement their eco-friendly Solar Heat Reflective coating, SIRC to develop state-of-the-art waste management infrastructure, and Saudi Tabreed to implement district cooling facilities. We are proud that KAFD is the largest LEED-ND certified mixed-use business district in the world and over 40 of our buildings are LEED-certified. Our priority remains steadfast: reduce energy consumption and combat climate change with smart technologies, greenification, smart mobility, and more to improve our customer and tourist experience in KAFD.

Sandeep Walia: At Marriott International, we have a responsibility and vested interest in helping to address some of the world’s most pressing social, environmental and economic issues. With our size and global scale, we are well positioned to be part of the solution. As we move forward in this rapidly evolving world, Marriott continues to serve our world by supporting the communities in which we operate. Our sustainability and social impact platform, Serve 360: Doing Good in Every Direction, which puts our core value, Serve Our World, into action, provides a framework to guide our efforts through 2025. 

Looking at KSA specifically, Riyadh Marriott Hotel has a solar panel project designed to supply usable solar power, reducing its CO2 emissions annually by 99 per cent; and our properties with the Red Sea Resort align with the initiatives of the destination.  For example, at The St. Regis Red Sea Resort, food is sourced locally, guests are transported in hydrogen-powered sea planes and electric cars, the interior design follows guidelines for LEED platinum certification and there’s a plastic-free policy on the island.

Commenting on regenerative tourism specifically, Dr. Fahad Bin Mushayt, Chief Executive Officer,The Saudi Tourism Investment Company (ASFAR), says that regenerative tourism that preserves Saudi’s unique culture and heritage, is ASFAR’s very purpose.

“We aim to unlock the full potential of promising tourism destinations, while supporting and maintaining the social infrastructure and culture of their communities. With this community development approach, we identify prime activation destinations, design sympathetic developments, and work closely with our partners, investors and local communities to create a sustainable local tourism ecosystem to support them and benefit the regional economy. We endeavor to use local resources in human capital, suppliers and materials in our developments, in line with the sustainability goals of Vision 2030," he said. 

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