Saudisation in the hospitality industry : management issues and opportunities

Late in the twentieth century, Saudi Arabia experienced its initial cohort of school leavers and graduates arriving into the private sector labour market. Until then, the country’s few educational resources meant that educated Saudis were absorbed into the public sector to establish administrative systems in nation building. By the turn of the century, the public sector was unable to absorb the tens of thousands of young Saudis leaving the education system without work-ready skills. The immense public infrastructure contracts that provided the bulk of jobs were largely resourced internationally, and, paradoxically, as the job numbers grew, so did Saudi unemployment—a matter established yet again at the time of this thesis’s submission. However, another growth industry is emerging in Saudi Arabia—that of religious tourism and the opportunity for an additional leisure component. The Saudi Commission for Tourism and Antiquities expects to receive 88 million visitors by 2020, with religious tourism rising to 16 million travellers by 2014. The tourism industry’s contribution to the Saudi gross domestic product in 2011 was 7.2 per cent, with 670,000 staff employed, 26 per cent of whom were Saudi (TTGMena Online 2012). Leisure and religious travel are central to the Kingdom’s youth employment initiatives, Saudisation and its 2011 compliance initiative, Nitaqat. However, hotels and restaurants are not a traditional career route for Saudis, who often lack customer service skills and dislike the working conditions. This study seeks to understand the effects of the Saudisation and Nitaqat policies, particularly in regard to the hospitality industry, as this is a priority of the government and a particular source of high job growth. For this research, a mixed methods study was undertaken, comprising quantitative data collection by means of a questionnaire distributed to 100 industry management representatives, 50 each in Jeddah and Makkah, and by using descriptive and inferential analysis. The findings from this analysis included significant differences between nationals and non-nationals in terms of industry experience, management experience and type of firm