Interview with Mohammed Al Otaibi, CEO of Ajdan
What is your assessment of the sector itself regarding tourism, business and leisure activities, and even the eastern state's waterfront? What was the reality before this project began?
Today, Saudi Arabia is positioning itself to be a top tourist destination around the world. More and more of the projects that were announced by the Public Investment Fund, such as the Red Sea Project, Amaala, etc., are more focused on entertainment and tourism. The government is betting big on the tourism sector for the next ten years. But, of course, the government cannot do everything on its own. They have to rely on the private sector's support. We in Ajdan believe that we can fill some smaller gaps in the grander scheme of the public projects or semipublic projects. Therefore, we have acquired a plot right next to the sea to do the first luxury resort in Khobar. This is also our ongoing plan in Ajdan Waterfront, where we are developing the Fairmont Hotel with approximately 160 keys facing the seafront. Our philosophy in Ajdan is that we will not do something isolated from the environment around it. Therefore, we always try to create a mixed-use development. We focus on retail, lifestyle, FMB, and entertainment. We have some movie theaters or entertainment blocks for kids, such as Magic Planets or KidZanias or Nickelodeons, somewhere where the family is going to a one-stop shop. They can enjoy their time in our development. Today, we in Ajdan are more focused on the tourism and entertainment sector because we think the government is betting big in these two sectors, and we would like to align ourselves with the country's vision. Of course, there will always be complementary sectors such as offices and residential parts in the mixed-use development. Here where we can provide an added value to the development industry.
What sort of clientele are you looking for? What is your international reach?
The foremost objective of the tourism sector is to raise the local tourism numbers up. We have a very healthy population, around 30 million people, and we drive many tourism markets around us such as UAE, Bahrain, Egypt, Kuwait. A lot of the visitors to these countries are actually from Saudi Arabia. Once we offer more options in Saudi for the local tourists, this will be a considerable achievement. For example, the travelers to Bahrain annually before COVID were 30 million people from Saudi Arabia. This number is enormous, and there are many services in Bahrain that are not available here in Khobar or on the eastern coast of Saudi. For example, there are many luxury resorts in Bahrain, such as the Ritz Carlton Resort, the Jumeirah resort, and the Fairmont resort. The standard is high upscale in these resorts, which is not hard to achieve here; this is why at Ajdan, we focused on developing luxury resorts in Khobar to capture some of this market flowing to our neighboring countries. The second part is the international tourists, especially from Europe and North America, where the weather in the winter is not favorable. We see a lot of them travel to the MENA region and some areas in Africa. These destinations are very close to us geographically, and we can capture some of these tourists in our development. Of course, the lion's share of those tourists will publicly develop the Red Sea, Amaala, Diriyah Gate, and other locations around the Kingdom. However, we think we can offer an alternative here on the east coast and, hopefully, in the coming years in the different regions of Saudi Arabia.
How are you going to attract these tourists? Do you have a strategy? Is it the responsibility of the government to help you, or do you count on your strengths?
We work very closely with the Ministry of Tourism. The Ministry of Tourism has three primary columns that are carrying the tourism mantle. First, the Ministry of Tourism itself is a regulator of the tourism industry, so we are working with them on improving our regulations to compete with the surrounding market vis a vis the VAT charges on the room rates, the Saudization requirements, etc. Second, the Tourism Development Fund is helping us inject some debt into our projects, which is supported by the government, which we appreciate greatly. For example, we are the first developer to sign with the Tourism Development Fund to operate and construct the Fairmont Hotel in Ajdan Waterfront. The most important part and the third column in the Ministry of Tourism services is the Tourism Authority which is now promoting Saudi Arabia worldwide. They are signing with the top tourism companies in the Far East, Europe, and North America to attract more tourists to Saudi Arabia. Because we are part of the Ministry of Tourism program, we can generate many newcomers to Saudi Arabia into our developments by signing with the Tourism Development Fund. As we advance, the Tourism Authority will rely on the private sector to give more options, especially in hospitality, provided by the private sector around Saudi in areas not covered by the public investment funds or any other company related to the government.
The Fairmont Hotel is going to be an approximately 40 story hotel. It will have around 160 keys, an enormous banquet hall and conference rooms, two restaurants, including a specialty restaurant, all right next to the sea. Of course, all of our units will have a full sea view.
What do you offer in Khobar that is unique and can draw these tourists from other countries or cities?
I personally like to travel to areas where there are not a lot of tourist attractions. I went to Venice in 2016, countless tourists filled it, and the experience wasn't pleasant. Khobar is a hidden gem that tourists do not yet discover. It is a very light city, very spacious, the people are amiable, and there is not much traffic. There are untouched virgin beaches, and it has one of the longest coastlines for a city in Saudi Arabia. From a development point of view, many developments are coming in the next two to three years to solidify the tourism sector. We will have at least six or seven destinations in Khobar where you can spend at least three days in each. Khobar Avenues is coming, which is a joint venture between Alshaya and Al-Fozan. It will be one of the largest malls on the east coast and definitely in the top three or four in Saudi Arabia. We will have two luxury resorts, one of them being developed by us as Ajdan with leading operators in their first time coming to the region. We also have Saudi Entertainment Ventures, which is a PIF-owned company. They are doing a massive project here in Al Khobar right on the coast, an entertainment cluster with many FMB, retail offerings, aquariums, etc. Khobar is going to be fully ready to compete with the surrounding cities in the GCC by 2023. By then, countless of these projects will be operational, tenants will move in, and many footfalls are coming internally from Saudi Arabia to Khobar. We are moving forward with these developments and these attractions coming in the next two to three years.
Can you share some specifics of the Fairmont Hotel? What specific details does the project offer?
The Fairmont Hotel is going to be an approximately 40 story hotel. It will have around 160 keys, an enormous banquet hall and conference rooms, two restaurants, including a specialty restaurant, all right next to the sea. Of course, all of our units will have a full sea view; no city view at all for our guests. It is a fully utilized waterfront development. Right next door is our AMC Cinema and our restaurants in Ajdan Walk. So, you are going to stay in a hotel within a full master development. People can stay in the hotel for two to three days without leaving because everything is there.
We are planning to do a marina in front; as we speak, we are negotiating with the government on the commercial terms that we could apply to this marina, and it is going to be operated by the same SPV as the hotel. We are positioning the hotel as a luxury hotel, and it will be the first of its kind in Khobar. We are going to be more focused on the e-services in the hotel itself. We are working with Accor Group to maximize the customer journey, simplify the checking-in and checking-out process, and charge your phone while you are in the lobby or the restaurants or your room. The hospitality sector is changing. People are spending less and less time in their rooms. They usually use it to recharge their batteries, take a quick shower, and go back again exploring what is happening outside, especially if it is a touristic type of approach as in our hotel. Our hotel is not a business hotel because we maximize sea views, and we are within a master plan. But if someone is a business traveler, they will enjoy spending a fun time in our hotel rather than closing the curtains and working on their laptop. We will change this mentality that Khobar is a city where you come in, finish your meeting, and immediately jump on the next airplane to whatever destination you are going to. Giving an option like the Fairmont in front of the sea in Khobar will provide people with a different perspective for leisure or business. Khobar generates a lot of business travelers throughout the year.
One of the issues was that we do not offer something fun for the business travelers, so they elect to leave within a day or two, and they stay in their hotel rooms working with their reports or emails. They do not enjoy the surroundings because the offering is not there. We offer an enjoyable, relaxing place for business travelers. It is not a business hotel, but it is going to attract a lot of business travelers. Usually, someone coming to Khobar will stay for a maximum of three days. With these offerings, such as the Fairmont and other developments surrounding us, the dwelling time in Khobar will increase significantly.
What projects are you working on at the moment?
Today, we are more focused and concentrated in Khobar. However, we would like to be diversified geographically in the future. We are working with the designers right now on two projects. All of them are right next to the sea. First, we are completing Ajdan Waterfront with the Fairmont. For the Fairmont Hotel, we are now finalizing the concept design. Once we open the Fairmont Hotel in Ajdan by 2023, it will be the best hotel in Khobar for the next ten years. By 2023, Ajdan Waterfront completes 100%. Now, we are doing a project called Ajdan Infinity right next to the sea. It is a similar size to Ajdan Waterfront and has similar mixed-use offerings. We are finalizing the design in the next six to eight weeks, and we are starting the construction hopefully in the fourth quarter of this year. This project has about 600 residential units, approximately 20,000 square meters of FMB lifestyle built-up area, multi-story parking, and three towers, with every building being 30 plus stories. It is going to be a unique and definitely landmark project to Khobar. Another project is the Khobar luxury resort, and we are finalizing with one of the top brands in the world to operate this resort. Hopefully, both projects are going to be finished by 2025 or even before. We have already started the design and financing stages; by the end of this year, we hope to begin construction for these two projects.
