TRSDC: Regenerative tourism, wellness and ESG

Q&A with TRSDC: Regenerative tourism, wellness and ESG

AMAALA Triple Bay

BHN speaks to representatives from The Red Sea Development Company about how the project is reshaping regenerative tourism, wellness, and ESG standards.

• How is The Red Sea Project redefining regenerative tourism?

Tracy Lanza, group head of global brand development: It’s important to say at the outset that regeneration is more than sustainability. It takes us one step further than sustainability alone, to renew, restore, and revitalise our resources. Our focus is on regeneration of natural systems, co-designing with and for the environment and local communities, to create a lever for economic growth. Regeneration has the potential to implement circular economy principles, strengthen local communities, uplift cultures, and build stronger connections with agriculture and food supply systems. By adopting this holistic approach at The Red Sea Project, we aim to inspire a paradigm shift in the way the industry thinks about tourism.

Not only will our destination have no connection to the national grid, instead powered solely by 100 per cent renewable energy, but we have also committed to delivering a 30 per cent net conservation by 2040 across the destination. To achieve this ambitious goal, we are developing less than one per cent of the entire 28,000 square kilometre landscape and designating nine islands as special conservation zones. A smart destination management system will track the environmental impact of all operations to avoid over-tourism, coupled with a cap on visitor numbers, set at one million once fully operational in 2030.

We are sending zero waste to landfill – even during construction – and banning single-use plastics. In fact, we will be single-use plastic free by the time we are fully operational. Green infrastructure, construction, and retrofitting is being prioritised every step of the way, while limiting heavy carbon-emitting practices such as excessive air conditioning, heating, and lighting.

We are also the proud owners of the largest landscape nursery in the Middle East. With a goal of growing 25 million plants to green our two destinations by 2030, it is contributing to habitat restoration and climate friendly agricultural practices. The expansion of key habitats, including seagrass, mangrove, coral and land vegetation, not only encourage biodiversity to flourish but support our efforts to sequester carbon. Innovative technologies like coral farming, 3D printing and floating nurseries, will ensure we continue to put our environment first.

• Saudi Arabia is unique in that the Kingdom has outlined its Vision 2030. Where else in the world can projects like this exist? Are there any target markets?

TL: The Red Sea Project exemplifies all Saudi Arabia’s greatest strengths – its ambition, imagination, and culture. Every decision we make is motivated by a passion to contribute to Vision 2030 and connect the Kingdom with the rest of the world.

Redefining regenerative tourism at home has little value if it does not support global sustainability efforts. As the country plays a leading role in shaping common solutions to international challenges, The Red Sea Project will be a blueprint that we hope will be replicated around the world. We aim to lead by example to achieve global competitiveness and share best practices with the industry at large. We will set a new benchmark for sustainable tourism and share our lessons so that responsible and meaningful innovation can become the new norm.

• When it comes to marketing the destination, what can be learnt from case studies such as Dubai? How will the company set out to change the perception of Saudi Arabia?

TL: Dubai presents a great story of a city’s progress from a desert oasis to a global metropolis and one that is closely mirrored in Saudi Arabia’s tale of transformation, demonstrating the power of tourism as a bridge between cultures.

In the Kingdom, we recognise that there are dualities. While we are charging full steam ahead to place the country on the global tourism map, we also believe it is critical to highlight, preserve and enable local communities. We want to amplify tourism investment opportunities to international players, while also uplifting the cultural richness to be found along the Red Sea Coast. And as we create new blueprints for sustainability and liveability, we also want to embrace the natural environment and leave as much of it untouched as possible.

Guests to the Red Sea Project and AMAALA will visit one of the last undiscovered destinations and find them to be the most technologically advanced and eco-friendly in the world. Travellers will experience unique coastal and island locations, sweeping desert and dramatic landscapes that include volcanoes, and canyons, packaged together with the highest standard of personalised luxury. Authentic and bespoke itineraries will immerse one and all in the local culture and heritage, inviting the world to explore the history of the region and experience the warm hospitality of the local people – undoubtedly our greatest asset.

• What does the future of wellness look like?

Sue Harmsworth, advisory board member: As we emerge from the pandemic it is clear that people are taking much more ownership of their health. Countries and individuals who may not have been interested in health and wellness before are increasingly more aware and attentive.

These changes are already setting a precedent for the future of the health and wellness industry – especially where it intersects with travel and tourism. 

We’re seeing increasing personalisation of customer experiences, the integration of digital services and a renewed focus on both physical and mental wellbeing, each becoming integral components of the overall wellness experience. 

Destinations are starting to curate personal wellness programs that get under the skin of their guests’ needs, providing services that match them perfectly. Not only does this offer a better customer experience, but there’s a good financial reason to offer hyper personalisation. Health is much more than a one-time consideration, which is why at AMAALA I’d expect to see upwards of 50 per cent of bookings from repeat visitors. 

Because of this, enhanced digitalisation will become key to offering guests a seamless individual wellness journey. Expect to see data analytics and machine learning programs put to work creating personal health and wellness experiences. Consumers are increasingly comfortable with intelligent use of digital services, appreciating the standards of hospitality that can be delivered, which are impossible via traditional models.

A further legacy of the pandemic, which I believe will play an important role in the future of health and wellness, is the acceptance that wellbeing is about so much more than just seeking out physical benefits. Mental and cognitive health is now in the spotlight more than ever as a result of multiple lockdowns and isolation, and the industry has an opportunity to address this. Guests are looking for holiday destinations that offer a holistic approach to health and wellness, encompassing medical, physical and mental services. 

Of course, one in two people are predicted to be touched by cancer, so preventative and post-care areas also offer an opportunity for leaders to demonstrate their worth to clients. 

AMAALA is bringing this together within our wider destination so that clients can access all the services they need. I’m confident the tailored and holistic wellness experiences and evidence-based medical treatments planned will deliver benefits that stay with clients long after they’ve left the Red Sea.

• What benchmark will AMAALA set for future hospitality projects?

SH: As a trailblazer in the wellness industry, AMAALA will set new benchmarks by offering more wellness services than any other destination in the world, spanning a 4,166 kilometre-square site. Services will cover the full health and wellness spectrum, encompassing science-based medical support, diagnostics, natural remedies and spa treatments, as well as a selection of culturally diverse therapies and services. It is paramount that guests have all their needs met across the destination – in a place that is naturally beautiful and where sustainability considerations are prioritised as much as our guests.

Beyond the offering to guests, we are also broaching new frontiers in how services are delivered. Clients will benefit from the use of sophisticated algorithms and data analytic tools such as AI and machine learning. These will build in-depth customer profiles to shape individualised health and wellness programs. Of course, the combination of advanced technology and good data management will bring about personalisation and time efficiencies that benefit both guests and the operational team. 

Importantly, technology will be used in subtle ways, being almost invisible to guests. For those guests who desire a digital detox during their time at AMAALA, we will go even further, for instance offering the option of printed plans instead of app-based services. 

At AMAALA, this journey to health and wellness starts before guests even arrive. They’ll receive at-home diagnostics kits and wearable health tracking device pre-arrival. After they leave, the strategic use of technology will enable professionals to support clients all year round, with data-based coaching sessions to track progress. This continued communication is important, considering most people fall off the wellness wagon around six months after a more traditional diet or exercise regime. Ultimately, I believe that the benefits of a health and wellness destination of this scale should be far-reaching and that, if done right, we can aid guests with unlocking health transformations that last a lifetime. 

AMAALA is also setting new benchmarks when it comes to creating a thriving community that encompasses both guests and staff. This is evident in the employee village, which embraces the latest concepts in co-working and community living – a central, thriving hub where people can work, live and relax, with each detail carefully considered to create a safe, modern and enjoyable lifestyle for those working here. Guests will also experience part of this community spirit as they enjoy locally sourced produce that has been farmed by local farmers using sustainable techniques. 

This is a vast and ambitious project – there is no equivalent in the world today. To achieve this, I am working with AMAALA in my capacity as an advisory board member, as they gather a coalition of expert partners and major international brands in one place, drawing on the pre-existing expertise of industry leaders to deliver a truly one-of-a-kind health and wellness experience.

• Do you think the requirements for capital access and the issuing of green loans and bonds will become easier or stricter for sustainable projects? And how will this shape sustainability standards?

Jay Rosen, chief financial officer: As the growing trend for sustainability has resulted in a heightened focus of ESG, both on Main Street and Wall Street, so too has the scrutiny on what it means and how it’s measured. All stakeholders, whether it be ESG funds, sustainable debt market, government, the boardroom, etc, have embraced the “green” moniker. Unsurprisingly, more and more capital is flocking to this space. However, organisations that fail, or fall markedly short, of meeting their “green” missions or targets or making good on their “green” promises are now being accused of “greenwashing”, thus casting a shadow on their intentions and with deleterious consequences to their reputations and standing.

We believe it is critical that the meaning of sustainability not be diluted. Greenwashing is a serious issue, and it is critical to substantiate claims with metrics on use of proceeds and the related environmental impact. Last year, we at the Red Sea Development Company (TRSDC) secured the first ever Riyal-denominated green finance (a ~$3.8bn term loan and a revolving credit facility) in Saudi Arabia. We developed a Green Loan Framework for our green financing with HSBC acting as green loan coordinator, aligned our approach with both the Green Bond Principles (2018) and Green Loan Principles (2020) set out by the International Capital Markets Association (ICMA) and the Loan Market Association (LMA), respectively, and received requisite independent third-party accreditation from DNV.

We have established an entire dedicated team to actively and regularly monitor the use of our green finance proceeds to projects that are covered under our Green Loan Framework against clearly defined KPIs. At TRSDC, we are conducting materiality assessments to identify, refine, and assess numerous potential environmental, social and governance issues that could affect TRSDC and its stakeholders. We have also developed comprehensive reporting via an annual TRSDC sustainability report which will showcase our achievements and progress on our sustainability goals to the public.

We believe the implementation and ongoing execution of our green finance will reinforce and complement our company’s commitment towards ESG and sustainability. The integration of ESG into our investment strategy from the onset has influenced our assessment of investment partners and whether they are aligned with our values towards sustainable and regenerative development. At the end of the day, accountability for ESG matters with investors.  

ESG regulations and standards are still evolving as well as the peripheral green taxonomy. Whether the rules dictating the issuance of green loans or green bonds become more or less lenient or stringent is anyone’s supposition. However, what is certain is that issuing requirements around green finance will constantly evolve with the goal of meeting investors’ and regulators’ requirements. It will behoove issuers to seek to have clear and identifiable requirements that support them to issue green finance but with clearly defined KPIs around the implementation of sustainability related projects in order to avoid being accused of greenwashing.

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