In November 2020 Riyadh is set to host the 15th annual G20 Leaders’ Summit, bringing together the leaders of some of the world’s largest economies. Although the summit will span a period of just two days, more than 150 separate meetings, exhibitions and events are being organised around it, and are expected to be a major boon for the local economy.
According to Riyadh-based investment and asset management company Jadwa Investment, the G20 summit is expected to add 0.2% to the country’s non-oil, private sector GDP. Aside from creating a number of economic benefits across the value chain for tour operators, hotels and event managers, the summit is also set to give Saudi Arabia’s government an opportunity to shine on the global stage, cementing the Kingdom’s position as an economic and geopolitical leader in the region.
In December 2019 Saudi Arabia assumed the G20 presidency, taking over from Japan. The presidency will provide the Kingdom with a unique opportunity to demonstrate leadership, particularly at a critical time in which the global economic and political order faces a rising number of unprecedented challenges.
In late March 2020 King Salman bin Abdulaziz Al Saud convened an emergency meeting among G20 leaders to discuss a response to the economic, health and social impacts of the global Covid-19 outbreak. Despite the extraordinary circumstances surrounding the meeting, the G20 leaders quickly agreed to a common course of action to mitigate the pandemic’s impact on the global economy.
The March 2020 meeting was a successful trial run for Saudi Arabia’s leadership ahead of the November summit, which will mark the culmination of Saudi Arabia’s one-year presidency. While attention will largely be focused on high-level policy discussions between world leaders, the substantial progress achieved and changes made under the Kingdom’s ambitious economic development plans will also be a point of consideration. The G20 summit will provide the Kingdom with the opportunity to showcase some of the modernisation goals already achieved under Saudi Vision 2030, the country’s roadmap for the next decade. The broad range of activities surrounding the summit are also expected to provide a welcome boost to the local economy, particularly for the hospitality sector and the meetings, incentives, conferences and exhibitions (MICE) segment. A number of associated events planned for 2020, such as the B20 business summit, the Y20 youth summit and the U20 urban summit, will likely benefit the local economy on a somewhat smaller scale.
More than 10,000 international delegates and media representatives are expected to visit Riyadh for the G20 summit, making it the largest conference or summit ever hosted in the Kingdom. Organising a high-profile event of this magnitude can present a number of unique challenges in terms of venue size, hotel space and security.
Riyadh has successfully hosted large international events in the past, including the 2017 Riyadh summit, which counted leaders from 55 countries – including US President Donald Trump – among its delegates. In preparation for hosting the G20 summit, however, Saudi Arabia is expanding its hospitality and conferencing facilities to meet the anticipated rise in demand. Jadwa Investment forecasts hotel occupancy and prices in Riyadh to spike significantly during the summit. As of early 2020 some 60 new hotels were being built in Riyadh alone, and the government expects that eight of these will be completed by November to host G20 leaders and serve as conference venues. This would increase the number of available hotel rooms in the capital from some 17,000 to 18,000; however, providing accommodation for all delegates may still prove challenging. Osaka, which hosted the 2019 G20 Leaders’ Summit, made plans to accommodate approximately 30,000 attendees.
G20 summit preparations come amid Saudi Arabia’s growing status as a global meetings and conventions destination. In recent years the government has prioritised the growth of its MICE segment, investing approximately $1.6bn in host facilities between 2016 and 2020. It has also created and hosted a number of international conferences, such as the Future Investment Initiative (FII) – an annual investment forum established in 2017 and hosted in Riyadh – which brings together world leaders, investors and innovators to discuss opportunities to enable growth in innovation and disruptive technologies.
Thus far the initiative has been a success, attracting more than 6000 attendees from over 110 countries across 25 different economic sectors in its third iteration in October 2019. The 2019 speakers and attendees included a number of high-profile leaders, such as Jair Bolsonaro, President of Brazil; Narendra Modi, Prime minister of India; and Steven Mnuchin, the US secretary of Treasury. A swath of investment deals were signed by the Saudi Arabian government during the forum, including more than two dozen deals worth $20bn in total, mostly in manufacturing. The 2020 edition of FII is due to be held from October 28 to 29, just over three weeks before the planned G20 summit.
The Kingdom hosts more than 10,000 MICE events each year, around half of which are held in Riyadh. Apart from religious tourism, MICE is the largest tourism segment in Saudi Arabia. Although religious tourism still dominates in terms of foreign arrival numbers, the MICE segment has grown quickly in recent years.
In line with this, Saudi Arabia has been working to steadily increase its selection of exhibition and meeting spaces in major cities. “We have a limited number of venues and meetings spaces available in the country,” Assaf Al Amri, marketing director at the government-run Saudi Exhibitions and Convention Bureau (SECB), told OBG. “In Riyadh our MICE venues comprise roughly 56,700 sq metres, whereas in Dubai there is around 150,000 sq metres. We are working on identifying and developing new sites in order to increase stock,” he said.
In addition to the G20 summit and FII forum, in 2020 Saudi Arabia will host a score of other, high-profile international events. The capital has already hosted the 2020 Institute for International Finance (IIF) G20 Conference in February, which brought together over 200 senior government officials, policymakers and private sector representatives. The Kingdom will also host the inaugural Global Artificial Intelligence Summit, which is set to take place in Riyadh in September 2020.
The Kingdom’s MICE events are largely conducted by local professional conference organisers (PCOs) such as Riyadh Exhibitions Company (REC). Working with both local and foreign entities, REC plans, markets and executes over 10 international exhibitions each year for a variety of sectors, including petrochemicals, health care, utilities, agriculture and transport.
The mandate of SECB, meanwhile, is evolving, and its ongoing work to ease regulations will be crucial to the future success of Saudi Arabia’s MICE segment. Starting in 2019 SECB’s responsibilities have gradually been taken over by a new government body known as the General Authority for Exhibitions and Conventions (GAEC). “Previously, GAEC largely focused on licensing for MICE events, whereas SCEGA – with a much wider mandate – deals with licensing of business events, and the development and facilitation of the segment, including legislative and regulatory reforms,” Al Amri told OBG.
By supporting the MICE segment, SCEGA aims to create an attractive environment for investors and PCOs within the country and abroad. “We are currently working on regulatory reforms to limit the number of subject areas that require vetting as part of the MICE licensing process,” Al Amri said. “As it stands, the approval process on content is lengthy, because numerous government bodies must screen all relevant and specialised materials.”
In 2020 Saudi Arabia’s political leadership and economic progress is set to be visible on the global stage to an extent it has not experienced in the past. The ability of the Kingdom’s hospitality sector and MICE facilities to cope with major global events like the G20 summit will also be under scrutiny.
Having positioned itself in recent years as a regional and global business events destination through its rapidly expanding MICE segment, Saudi Arabia has established a firm foundation on which to build. Although the summit only spans a period of several days, the positive publicity generated for the Kingdom is expected to bring substantial long-term economic and investment benefits to the country.
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