THE AEO INTERNATIONAL DINNER: INSIGHTS FROM SAUDI ARABIA

Monday 17th June 2024, saw more than 20 CEOs from across AEO membership meet at the Loft private dining room at the Ivy Club for the first International Dinner of the year, sponsored by long term AEO supporter DSV, who contributed to the conversations sharing their local knowledge of operating in the region. The AEO International Chair, Simon Foster from ARC, interviewed Tahaluf’s CEO Mike Champion, answering questions from delegates who also shared their owned experiences of operating in the region.

Central to the conversations were the Kingdom of Saudi Arabia’s drive for change, and shifts in culture in recent years, particularly towards women and education, which the AEO delegation to the UK’s largest trade mission in 10 years experienced during the GREAT Futures event last month.

Workforce

• The majority of the workforce is young Saudi nationals, with event businesses employing more than 50%, and perhaps not the same level of expats that people perceive
• The workforce is well educated and well paid, circa 25% more than other middle eastern regions.
• Every overseas employee has to be matched with by employing a Saudi national
• Those who have been working in Saudi for some time are living this change which is happening very fast

Infrastructure

• There are a significant number of construction and infrastructure projects underway
• The largest venue is circa 50ksqm, one hour’s drive from Riyadh and another near the city centre at 36k, with a plethora of new venues planned
• Venues can be extended using temporary structures and infrastructure to accommodate larger events
• There is a lack in scale of quality hotel rooms, and alcohol is not permitted in KSA so entertainment at events should adapt to factor this in.
• F&B can also scale up for events, via hotel infrastructures but this can be expensive
• Whilst expansion and improvements to customer service are in progress to venues and F&B and developing airline routes – this is holding back progress

Event landscape

• Some events are government owned, others privately owned
• The government has a clear industrial strategy and targets, and is keen to become market leaders in these markets
• Vision 2030 is a wholesale economic transformation plan for the region, with events being part of their strategy
• Government interference is minimal, but it is keen to see success and protect their brands – so as an event grows and develops they become less hands on
• Working with trusted partners and quality brands helps both in terms of support and quicker development
• KSA is keen to build their own IP, support others, but clear to promote key priority markets in line with their strategy (eg fintech, biotech, AI, etc)
• Due to the climate and religious festivals the operating window for events is around 5 months per year
• Build times are longer than in Europe (to ensure quality and maintain reputation) which also limits the operating window
• The supply chain operates across multiple event types (such as pop up festivals, theme parks), reducing availability for exhibitions
• As a result, costs are higher esp staff costs, other services such as cleaning, car parking, building temporary structures, etc.
• Payment terms are very long sometimes 18-24 months

Keeping a good margin is a challenge due to creating infrastructure, high F&B & Hotel costs, high labour costs, and long builds/availability of labour

Opportunities

• Current organisers and the government are keen to see more event activity to fuel the building of supporting infrastructure and raise standards
• Events, which benefit the KSA, with a positive look and feel and premium brands are a major focus for the government and more likely to succeed quicker

Challenges

• Venue space, availability of tenancies in key months, long build times and costs

We are hugely grateful to contributions from all the delegates, and in particular Mike for taking the time to share his experiences, hopes and aspirations for this exciting and developing market.

The next international dinner takes place on Monday 15th July, with a focus on India, with Ravinder Sethi from RE Rogers who is also sponsoring the event. We return to Europe on the 28th October for a focus in France, with Eric Pierrejean from JEC Composites, sponsored by AEO registration partner, Fusion.

If you’d like to register interest for any of these events, please contact Jess@aeo.org.uk.