Red Sea Global’s CEO shares how the firm is delivering on Saudi’s tourism agenda

Saudi Arabia is diversifying and opening up its economy by developing productive sectors outside the oil and gas industry, and tourism occupies the centre stage of the country’s socioeconomic transformation agenda under Vision 2030.

The kingdom welcomed 27 million international visitors, up 56 per cent compared to the pre-pandemic levels while the number of domestic tourists reached 79 million, also up 56 per cent from 2019. It is investing billions of dollars in sports and culture to lure tourists and recently won the rights to the 2030 World Expo and 2034 FIFA World Cup.

Red Sea Global, the developer behind a major tourism destination on Saudi Arabia’s Red Sea coast, is pulling out all stops to deliver on the kingdom’s new target of 150 million annual visitors by 2030.

Here, John Pagano, the CEO of Red Sea Global, talks about the company’s approach to regenerative development and ongoing work to deliver 8,000 hotel rooms by the end of the decade.

Q. Tell us more about Red Sea Global and how the development is contributing to Saudi Arabia’s Vision 2030.

We were the Red Sea Development Company when we launched in 2018 to drive the development of the Red Sea Project, as part of Saudi Arabia’s economic diversification strategy under Vision 2030.

Our focus is to advance regenerative tourism in Saudi Arabia. The tourism sector is emerging as a thriving pillar of the kingdom’s economy that was previously underrepresented in terms of its contribution to the overall GDP at 3 per cent but is set to add 10 per cent and create one million jobs by the end of the decade.

The project started with a beautiful archipelago of 90 pristine islands and we set about trying to come up with something unique and globally significant. First and foremost, we prioritised the environment and regenerative tourism.

We were given the Amaala project in 2021 and today we are developing more than a dozen projects along Saudi Arabia’s Red Sea coast. We welcomed our first guests in 2023 and we also unveiled our third destination, Thuwal Private Retreat.

We have awarded construction contracts worth $20bn and we have spent $10bn since the beginning of the development. Together with our partners, we working to deliver 19 resorts – 11 at the Red Sea project and eight at Amaala in 2025.

Q. What are Red Sea Global’s investments and development projects?

Red Sea Global is comprised of the Red Sea project, Amaala and Thuwal Private Retreat. Thuwal boasts a three-bedroom villa and three one-bedroom suites that can accommodate up to 12 guests. We also have new large-scale projects that we have not yet made public, some that are as big as the Red Sea project and Amaala.

We are also looking at opportunities outside Saudi Arabia – both regionally and internationally. When these opportunities arise, we are considering developments that meet our values.

Q. How are The Red Sea Project and AMAALA revolutionising the tourism industry regionally and internationally?

We do not want to be compared with any other location which is why we are creating something exclusive to Saudi Arabia.

The company is creating destinations that have never been seen before, and I think we are accomplishing that as seen from the imagery from our resorts that are now open to welcome guests and those that are coming.

The main thrust is the way we have approached it, regenerative development, which is revolutionising the tourism industry. The most valuable asset on our balance sheet, nature and the environment, differentiates us from other destinations.

With all the natural beauty that we have in terms of the size of the land, 28,000 square km, we are going to develop a very small proportion and we will limit the number of visitors to no more than a million annually.

The revolutionary approach that we are taking is how we are working in harmony with nature. We are using our platform to show the world that we can develop in harmony with the environment.

Q. What is your approach to the concept of “regenerative tourism,” and how is it applied to the projects you oversee?

We are using the opportunity that we have here in Saudi Arabia to shine a positive light on doing things differently and putting emphasis on protecting the planet. We built the largest tourism destination in the world powered 100 per cent by renewable energy.

The company entered into a 25-year concession agreement with France’s EDF and UAE’s Masdar to service Amaala. The renewable supply system can generate up to 410,000 MWh per annum, enough to power 10,000 households for an entire year, and includes a 700 MWh battery storage facility.

We built the world’s largest battery storage facility at 1,000 MWh as well as the biggest district cooling system in the world that is powered by renewable energy. We are saving between the Red Sea project and Amaala around a million metric tonnes of carbon dioxide that would otherwise have been released into the atmosphere.

Our resorts use electric vehicles (EVs) for guests that visit the destination and we also have the biggest charging network that is powered by renewable energy in Saudi Arabia. The company is also exploring the use of hydrogen fuel for heavy vehicles such as trucks and even marine vessels.

Last year, we planted one million mangroves and this year we are aiming to plant 2.5 million mangroves towards our overall commitment of 50 million plants by 2030.

Mangroves protect our islands against rising sea levels and erosion, and the most interesting part, at least for me, is that the plants sequester carbon at an advanced rate compared to trees on land.

Q. The project will comprise 50 resorts, offering up to 8,000 hotel rooms and around 1,300 residential properties by 2030. Tell us about your collaborative partnerships with other players in the hospitality sector to achieve this target.

Red Sea Global is a cornerstone of Saudi Arabia’s Vision 2030 and upon completion The Red Sea will comprise 50 resorts, offering up to 8,000 hotel rooms and more than 1,000 residential properties across 22 islands and six inland sites.

Similarly, Amaala will be home to more than 3,900 hotel rooms across 29 hotels and approximately 1,200 luxury residential villas, apartments and estate homes, supporting high-end retail, fine dining, wellness and recreational facilities.

We have received interest from all the major hotel operators globally including Hyatt Hotels & Resorts, InterContinental Hotels Group and Marriott International. I describe these multinational hospitality companies as “big box brands” because they have thousands of hotel brands globally and we are dealing with the upper echelons of their offerings.

Q. Red Sea Global opened its doors to guests and unveiled its luxury hotel brand Shebara in 2023. Give us insight into your short-term targets and what is your priorities in 2024.

Our medium-term priority is to continue to build on the successful openings of the hotels. We have opened two hotels so far and three will open soon. We are also building the company’s mobility system to transfer guests and it is a multimodal transport system.

Red Sea Global launched the first seaplane company in Saudi Arabia to transfer some of our guests who prefer to use seaplane from the airport to our islands. Last October, the first seaplane flight by Fly Red Sea took to the skies.

There is a lot more that goes into opening hotels and our short-term goal is to continue to scale and build excellence in all of those different facets that will ultimately contribute to the overall guest experience.

Q. The company is considering a possible public market offering as soon as 2026. How are these plans shaping up?

Nothing is ruled out at this stage. There will likely be some kind of public event but do not think it will be in 2026. For hospitality assets, a company needs to open and stabilize, and it takes between three and four years for a hotel property to reach stabilisation, so it would be premature to go to the markets next year.

The exact timing will be dictated by when we stabilise income from the projects from the first phase. A public market is something that we are studying, but nothing is firmly set in stone as to the exact timing and the exact mechanism that we will use.

Read: Saudi Arabia’s Red Sea Global secures SAR2bn debt financing