Saudi Arabia's Red Sea tourism megaproject developer is considering a potential initial public offering or a real estate investment trust as part of its future growth plans, set against the backdrop of the kingdom's efforts to develop non-oil sectors.
Red Sea Global is currently in “very early stage” discussions with banks and stakeholders, the company's chief executive John Pagano told The National in an interview on Wednesday.
“Nothing is off the table. We are looking at all different options, amongst which would be an IPO, which is a normal evolution of a company like ours,” he said.
A potential listing could be on the cards for 2026 or 2027, after the destination opens to visitors and hotels establish a financial track record, proving the financial feasibility of the tourism industry in the kingdom, he added.
The size of the listing will depend on whether the company opts for an IPO or a Reit, which has yet to be decided, but “it will be big”, Mr Pagano said.
These large-scale tourism projects are part of the kingdom's efforts to diversify its economy, reduce its dependence on oil revenue, create jobs and attract foreign investment.
Developing strategic non-oil sectors such as tourism, aviation and hospitality are key pillars of the kingdom's Vision 2030 economic transformation agenda.
Saudi Arabia's sovereign wealth fund, the Public Investment Fund, in 2021 created Red Sea Global by merging two government-owned developers — the Red Sea Development Company and Amaala.
Together, the two projects will create 120,000 direct and indirect jobs created by 2030. This will contribute more than 10 per cent of the one million jobs in the tourism and hospitality sector that the kingdom is seeking to create.
Green financing
The first phase of the Red Sea project is “fully capitalised” and will not require further funding at this stage, Mr Pagano said.
In 2021, the company secured 14.12 billion Saudi riyals ($3.76 billion) in funding through the first locally denominated green financing credit facility for the first phase.
The company is considering raising about 10 billion riyals in green financing for the first phase of its Amaala project later this year or 2024, though no firm decision has yet been made, Mr Pagano said.
Amaala, an ultra-luxury destination focused on wellness, will feature more than 1,300 hotel rooms across eight resorts.
The firm is also proceeding with plans to sell luxury second homes within the Red Sea and Amaala projects in the third quarter of 2023 amid “high” levels of interest from the market, Mr Pagano said.
Project progress
The Red Sea, one of the world’s most ambitious regenerative tourism projects, is now getting ready to welcome its first visitors, with rigorous testing under way.
Three of its 16 resorts are scheduled to open this year.
The Six Senses Southern Dunes, a 76-key resort that makes the most of the region's inland wadis and mountains, is scheduled for a soft opening in July, Mr Pagano said.
The St Regis Red Sea Resort and Nujuma, a Ritz-Carlton Reserve, are in the final stages of completion and expected to open in September and October, he added.
By the end of 2024, 21 additional resorts at Red Sea and Amaala are scheduled to be completed and will start opening in 2025, Mr Pagano said.
The executive, with 35 years of international experience in the commercial property industry in Europe, North America and the Caribbean, expects the destination will welcome about half a million visitors at the Red Sea and Amaala once the first phase is completed at the end of next year.
The aim is to eventually attract a “50/50 split” between international and domestic visitors.
“The early stages will see a higher proportion of domestic visitors, not because the international interest isn't there, but because there is so much anticipation and pent-up demand in the kingdom. People are always asking me, 'when can I book?',” he said.
“Then as the destination opens and becomes more known, we will reach that long-term balance of half domestic and half international visitors.”
While global economic headwinds such as high inflation and commodity prices have contributed to increasing project costs, this will be largely offset by the rise in hotel room rates in Saudi Arabia and globally, he said.
Mr Pagano said he is not concerned about opening the project during a period of weaker global economic growth as “consumer confidence has not been dented” and demand for travel “remains robust”.
The project is a cornerstone of the kingdom's Vision 2030 agenda and the transformation of the country, so “this is a long-term play, it's not short term”, he said and added that the industry is cyclical by nature.
Red Sea Global has already begun planning for phase two of the project, even before the completion of the first phase.
“We're serious about moving into tourism in a serious way, contributing to and growing the Saudi economy, and creating jobs,” Mr Pagano said.
“We're doubling down and moving forward with the next phases.”
He added that the regenerative eco-tourism project will resonate with a public increasingly focused on sustainable travel.
Six large-scale objects on show
- Concrete wall and windows from the now demolished Robin Hood Gardens housing estate in Poplar
- The 17th Century Agra Colonnade, from the bathhouse of the fort of Agra in India
- A stagecloth for The Ballet Russes that is 10m high – the largest Picasso in the world
- Frank Lloyd Wright’s 1930s Kaufmann Office
- A full-scale Frankfurt Kitchen designed by Margarete Schütte-Lihotzky, which transformed kitchen design in the 20th century
- Torrijos Palace dome
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding
Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.
Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.
Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.
For more details, email openminds@cultures.ae or visit www.cultures.ae
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Iran's dirty tricks to dodge sanctions
There’s increased scrutiny on the tricks being used to keep commodities flowing to and from blacklisted countries. Here’s a description of how some work.
1 Going Dark
A common method to transport Iranian oil with stealth is to turn off the Automatic Identification System, an electronic device that pinpoints a ship’s location. Known as going dark, a vessel flicks the switch before berthing and typically reappears days later, masking the location of its load or discharge port.
2. Ship-to-Ship Transfers
A first vessel will take its clandestine cargo away from the country in question before transferring it to a waiting ship, all of this happening out of sight. The vessels will then sail in different directions. For about a third of Iranian exports, more than one tanker typically handles a load before it’s delivered to its final destination, analysts say.
3. Fake Destinations
Signaling the wrong destination to load or unload is another technique. Ships that intend to take cargo from Iran may indicate their loading ports in sanction-free places like Iraq. Ships can keep changing their destinations and end up not berthing at any of them.
4. Rebranded Barrels
Iranian barrels can also be rebranded as oil from a nation free from sanctions such as Iraq. The countries share fields along their border and the crude has similar characteristics. Oil from these deposits can be trucked out to another port and documents forged to hide Iran as the origin.
* Bloomberg
ON%20TRACK
%3Cp%3EThe%20Dubai%20Metaverse%20Assembly%20will%20host%20three%20main%20tracks%3A%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EEducate%3A%3C%2Fstrong%3E%20Consists%20of%20more%20than%2010%20in-depth%20sessions%20on%20the%20metaverse%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInspire%3A%3C%2Fstrong%3E%20Will%20showcase%20use%20cases%20of%20the%20metaverse%20in%20tourism%2C%20logistics%2C%20retail%2C%20education%20and%20health%20care%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EContribute%3A%3C%2Fstrong%3E%20Workshops%20for%20metaverse%20foresight%20and%20use-case%20reviews%3C%2Fp%3E%0A
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Coal Black Mornings
Brett Anderson
Little Brown Book Group
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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5
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Company%20Profile
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