Saudi Arabia prepares to offer its first ever tourist visas two weeks after terror attacks

DUBAI ⁠— Saudi Arabia will for the first time offer tourist visas to a range of nationalities as it pushes ahead with plans to make tourism a pillar of its economy. The announcement of the visa regime, scheduled for Friday and the details of which are forthcoming, comes just two weeks after terror attacks claimed by Yemen’s Houthi rebels shut down half of the kingdom’s oil production.

“For the first time we are opening up the adventure, heritage, and history for people who will visit KSA as tourists,” Ahmad Al-Khateeb, chairman of the Saudi Commission for Tourism and National Heritage, told CNBC’s Hadley Gamble in an exclusive interview before the plan’s unveiling.

The kingdom’s goals, as part of its Vision 2030 agenda, include increasing the economic contribution of tourism from a current 3% to 10% of GDP by 2030 and bringing international and domestic visits to 100 million annually by the same time. Currently Saudi Arabia’s foreign tourism market relies almost exclusively on religious pilgrims coming to the country for Hajj. The government expects those numbers to reach 30 million annually by 2030.

While the plan is a milestone in the kingdom’s efforts toward diversifying its hydrocarbon-dependent economy, its announcement comes at a precarious time. Tensions between Saudi Arabia and its regional Shia archrival Iran have reached the boiling point, with Riyadh accusing Tehran of being behind the Sept. 14 drone and missile attack on some of its largest oil facilities, a charge Iran denies.

The news also comes just days before the one-year anniversary of the murder of Saudi journalist Jamal Khashoggi, who was killed at the hands of Saudi government agents in October of last year. The CIA concluded that Saudi Arabian Crown Prince Mohammed bin Salman, heir to the throne and de facto ruler, was involved in the death, something Riyadh has forcefully denied.

The scandal alienated the conservative kingdom from much of the international community and led some foreign investors to sever ties. Now, worries about terrorist attacks, regional instability and the security of Saudi Arabia’s economic lifeblood ⁠— oil production ⁠— may be casting a long shadow over its Vision 2030 plans for many investors and potential visitors.

Nonetheless, the kingdom appears determined to press on with what it sees as reforms critical to attracting private investment and creating new jobs for its booming population, 70% of which is under the age of 30.

“We know how much we need to do to satisfy our guests in the future,” Al-Khateeb told CNBC. “We know how many airplane seats we need to add … how many cars, car rentals, etc. We studied the whole ecosystem; we are filling gaps with what government will provide and what the private sector will provide. Name it: top resorts, hotels, establishing car rental companies, bigger airports, training centers, many things. For this industry will add a lot to our economy.”

On the Khashoggi controversy, Al-Khateeb described it as “taken care of by the authorities,” while adding that he did not find investment had dropped off in the year since the murder. “Today, (there have been) many agreements and many MOUs signed, a sign of interest in this sector and in Saudi Arabia in general,” he said.

The last two years have seen unprecedented change in the famously conservative country, including the lifting of a decades-long ban on women driving, the reintroduction of movie theaters, and entertainment offerings spanning from Janet Jackson and 50 Cent concerts to WWE fights and a potential Formula One race.

The kingdom is opening access to five UNESCO World Heritage Sites. Construction on new cities is also underway, including the $500 billion futuristic city, NEOM, and Qiddiya, an “entertainment super-city,” under construction 25 miles outside the capital, Riyadh. Six Flags is the first major international theme park operator to sign up for the Qiddiya project, and is promising to build the world’s tallest and fastest roller coaster there.

Saudi Arabia hopes to create a million new jobs through these mega-projects. Qiddiya, NEOM and the luxury tourism-themed Red Sea Project all have support from Saudi Arabia’s Public Investment Fund.

On the question of alcohol ⁠— something strictly forbidden in the country ⁠— al-Khateeb doesn’t think visitors will be deterred. “It’s not make or break,” he said. “Riyadh will offer heritage, food and many other great things … we have a lot to offer other than alcohol.”

Image-wise, Saudi Arabia is still well known for its poor record on women’s rights and is criticized abroad for harsh crackdowns on dissent. Ten female driving activists were put on trial last spring ⁠— despite the lifting of the driving ban ⁠— after months of allegations that they were tortured while in prison.

Winning foreign investment for tourism developments is key for the kingdom as it tries to refocus its image and move on from the diplomatic crises of the last year as well as maintain high living standards for Saudis as oil prices come down.