Saudi Arabia: Introduction
The Kingdom of Saudi Arabia is the largest Arab country in Western Asia. This state can be regarded as a monarchy; yet, this form of government allows for local municipal election (Alshamsi, 2010, p. 219). Arabic is the official language of this country; however, one should bear in mind that English is also widespread, especially in the financial or business sector. Saudi Arabia is an Islamic country, and the declaration of belief called Shahada is embedded into the national flag of this country (Conserva, 2006, p. 43). This information is important for understanding the political culture of this state.
Close attention should be paid to the major cities of the country. In particular, one should first focus on Riyadh City which is the capital of the country, and its current population is 5.250, 000 people (Central Intelligence Agency, 2013, unpaged). It is the administrative center of this state. Secondly, it is necessary to mention Mecca that is the place where the Prophet Muhammad was born. This city attracts at least two million pilgrims from all over the world. During the month called Dhu al-Ḥijjah this city can become the most populous place in Saudi Arabia. In turn, Jeddah is the commercial center in which a great number of for-profit organizations operate. Furthermore, Damman is the center of the Eastern Province, and it is the place where many ministries and other governmental organizations are located. Each of these cities is of great importance to the economy of the country, as well as its hospitality industry. These are some of the basic facts that should be taken into consideration.
Size, location, and population
It should be mentioned that Saudi Arabia is located the Southwest part of Asia. The country occupies approximately 865,000 square miles (Federal Research Division, 2004, p. 85). Furthermore, its territory of this state includes almost 80 percent of the Arabian Peninsula (Federal Research Division, 2004, p. 85). Researchers believe that the geographic location is vital for the economic development of the state (Federal Research Division, 2004, p. 85). One should take into consideration that this country has access to Indian Ocean, and this opportunity is critical for the trade; furthermore, it borders with African and Asian states that act as the partners of Saudi Arabia. This location enables the country to play a vital economic and geopolitical role. In this case, one should attach much importance to the trade opportunities that can be derived from the geographic location.
It should be mentioned that Saudi Arabia borders with such countries as Kuwait, Iraq, Kuwait, the UAE, Yemen, and Oman. Additionally, in the west, the country gains access to the Red Sea which is also vital important for the economic development of this state. Currently, the population of this country consists of 27, 136,977 people (Central Intelligence Agency, 2013, unpaged). Moreover, the annual growth rate is estimated to be 2, 31 percent (Central Intelligence Agency, 2013, unpaged). Yet, when speaking about the geographic tendencies in the country, one should note that more than 8 million people living in this state are the citizens of foreign country and these people currently work in Saudi companies. As a rule, these people are very skilled professionals. There is another that is important for describing the demographic situation in Saudi Arabia. In particular, people under twenty compose about half of the population (Long, 2005, p. 101). To a great extent, this structural composition of the Saudi population can influence the culture and economy of the country. For instance, this demographic peculiarity can affect the labor market of the Saudi Arabia or the adoption of new technologies in this state.
The culture of Saudi Arabia
When discussing the culture of a country, scholars can focus on different components. For instance, one should focus on such elements as beliefs, values, and norms. Thus, components suggest that culture can be regarded as a system of ideas that affects the behavior of an individual (Peterson, 2004, p. 16). In this case, one should focus on the norms that a person believes to be indispensible. Moreover, such a notion as culture is closely related to art. In this case, one can speak about the common myths, philosophical or literature works, cinematography, and so forth. To a great extent, they also form a complex set of ideas that are recognized by the members of a specific group (Nanda & Warms, 2010, p. 74). Finally, it is important to remember about the material culture of a country. It has such aspects as the use of technologies, economy, and industry. These are the main aspects that have to be examined since they are vital for understand the legal regulations existing in the country and the economic relation.
The culture of Saudi Arabia has several vital elements. Special attention should be paid to the crucial role of Islam since this religion shapes norms, obligations, values, and attitudes of people living in this country. To a great extent, it lays the basis for the interaction between individuals within the state. More importantly, Islam affects a great number of rituals in the country. In this context, the term ritual should be understood as one of the daily practices adopted by people. For example, one can refer to the dress code adopted among women in this country. Furthermore, Saudi Arabia is characterized by the strict adherence to the Islamic law called Sharia (Otto, 2010, p. 139). It affects a great number of areas such as marital relations or economic interactions such as trade. For example, one can speak about the prohibition of alcohol or pork sales (Otto, 2010). Therefore, one can say that Islam is a critical component of culture in Saudi Arabia, and to some degree, it affect the hospitality industry.
There is another factor that is vital for explaining the culture of Saudi Arabia. As it has been said before the country is currently populated by more than 8 million foreigners who can come from various parts of the world (Shoult, 2006, p. 122). Furthermore, many foreign companies have established partnerships with Saudi organizations. Overall, these individuals and organizations bring new business or economic models to this country. Furthermore, they help to promote the implementation of new technologies. This means that Saudi Arabia incorporates the elements of the Islamic culture as well as the innovation from the Western civilization. This is one of the details that attract the attention of scholars and sociologists. Additionally, this issue should not be overlooked by business administrators working in this country.
Apart from that, one should not forget about the legacies of the tribal system that can still influence the interactions between individuals (Kéchichian, 2012, p. 162). Kingship can affect the social status of an individual. Apart from that, tribal kinship can determine the income level of an individual or his/her career (Kéchichian, 2012, p. 162). Certainly, this system has been eliminated at an official level, but it can shape many decisions and choices that people can take (Kéchichian, 2012, p. 162). These are the main cultural aspects of life in Saudi Arabia. These peculiarities should be considered by the managers of hotels or other hospitality organizations that intend to operate in the Kingdom of Saudi Arabia.
The economic development of Saudi Arabia
Another aspect that should be examined is the economy of this country. Saudi Arabia is a state in which the government controls and closely regulates many economic activities (Rajhi, 2012). The recent economic crisis did not produce extremely adverse consequences on this state, it part because of the oil revenues that this country generates (Rajhi, 2012). Furthermore, the policy-makers of this country attempt to reduce the dependence of this state on the extraction industry. This is one of the reasons why policy-makers attach importance to the hospitality industry since it makes the national economy stronger. Moreover, much attention is paid to the employment of young people. This task becomes particularly important at that time when a significant proportion of the workers in the country are foreign nationals. This is one of the main issues that should be considered by managers and senior executives of hospitality organizations.
The reforms that are aimed at diversification stress the importance of tourism since this industry can attract significant revenues to the country. These revenues can come from tourists, business travelers, and pilgrims that decide to visit the country (The National Commercial Bank, 2009). The efforts of economists and entrepreneurs are affected by important factors. The first one is the conservative aspects of culture in Saudi Arabia. For example, one of them is the prohibition of alcohol sales. These restrictions can negatively affect the attitudes of tourists even if they want to visit natural and cultural sites in Saudi Arabia. Another factor that needs to be considered is the difficulties in obtaining visas. This bureaucratic obstacle can also prevent many foreigners from the country either for leisure or business (Shoult, 2006, p. 457; Janin, 2003). This issue was particularly important before 2008 before the government of the country began to simply the procedures for obtaining a visa. The developments that have been described in this section can have profound implications for many Saudi hotels, and their profitability.
The role of hospitality industry in Saudi Arabia
At this point, the hospitality industry can be viewed as one of the drivers that contribute to the development of the economy of a country. This tendency can be attributed to several factors such the growing number of pilgrims to Mecca and Medina (Cordesman, 2009). Furthermore, one should not forget about the increasing inflow of tourists to Riyadh or the Eastern Province (The National Commercial Bank, 2009). There are several aspects that can be identified. First of all, the number of four and five-star hotels has dramatically increased within the last decade (The National Commercial Bank, 2009). To a great extent, this trend can be attributed to the growing demand for hospitality services among local and foreign clients. It should be noted that the room capacity of Saudi hotels has grown by more than 300 percent within the last eleven years. In 1999 there were only 41.028 rooms while in 2007 Saudi hotels included approximately 185.000 rooms (The National Commercial Bank, 2009, p. 2). On the whole, these data indicates that the hospitality industry in Saudi Arabia is developing at a very fast rate and in the future, this tendency is not likely to reverse itself in the future.
At present the capacity of deluxe hotels is about 11,400 rooms. Among these hospitality institutions one can distinguish such organizations as Westin, Le Meridian, Hilton and many others. These hotels have successfully established their status in the local hospitality market. Furthermore, the statistical evidence suggests that the hotel industry in Saudi Arabia is not concentrated in one particular region. Certainly, a great number of hotels are located in Mecca or in close proximity to this. Currently, the visitors going to this area can choose from more than 600 hotels that can appeal to highly prosperous as well as middle-income people. Nevertheless, other parts of the country are also important for the development of hospitality industry. For instance, one can speak about Riyadh or the Eastern Province (Walker, 2010, p. 349). These organizations can suit the needs of people with different income levels (Walker, 2010, p. 349). Furthermore, the number of hotels in Jeddah has also increased significantly. These are the main points can be made while discussing the hospitality industry in Saudi Arabia and its long-term development.
The events that affect the hospitality industry
It is possible to identify several events that are directly located to the financial performance of hotels in Saudi Arabia. For instance, one can first speak about Jenadriyah Heritage and Cultural Festival which is annually held in Riyadh (Anderson, 2009, p. 41). It is aimed at exhibiting various aspects of Saudi culture. During these two-week festival, numerous artisans such potters or blacksmiths have a chance to display their works (Anderson, 2009, p. 41). Overall, this is one of the largest festivals that are now organized in the country. This event increases the occupancy of the hotels located in Riyadh, and business administrators should be aware of these event while developing their strategies or the pricing policies of their hotels.
Furthermore, one should certainly focus on such an event as Hajj and Umrah since they can profoundly influence the occupancy rates of those hospitality organizations that are located in Mecca. It should be borne in mind that there is some difference between these events. Hajj is one of the most important pillar of Islamic faith and this pilgrimage has to be made at least once by every Muslim person. More importantly, it has to be done during a certain time of year. During this time, Mecca can be visited by more than 3 million people from all over the world. Umrah also requires a visit to Mecca. Nevertheless, a person can perform Umrah almost at any time.
One of the main tendencies is that the number of pilgrims especially during Hajj, and this issue affect many companies representing the service industry, for example, travel agencies, airline companies, or hotels. These organizations should be ready for the inflow of pilgrims.
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