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HOTEL AND TOURISMIn 2008, the sector’s P/B multiple averaged 1.7x in 2008. As of 2008, the sector’s average RoEstood at 5.9% in 2008. As illustrated below, in 2008, Saudi Hotels had better RoE (11.4%) atattractive P/B multiple (1.2x) compared with TECO.Exhibit 174: Comparison of P/B and RoE, 2007 Exhibit 175: Comparison of P/B and RoE, 200816161212SHARCOROE (%)84SHARCOTECOROE (%)840TECOPB00 2 4 6 8 10PB(4)0 1 2 3Source: Gulfbase, Bloomberg, TadawulSource: Gulfbase, Bloomberg, TadawulTECO, however, topped the average trading volume chart in 2007-08.Exhibit 176: Average daily trading volume of stocks (‘000s), Jan 2007 – Dec 20083,0002,5002,4282,0001,9601,5001,0005000SHARCOTECOSource: ReutersKSA government maintains infocus on developing tourisminfrastructure to support longterm demandGoing forward, we expect KSA to maintain focus on religious tourism (both domestic andinternational), the backbone of the tourism sector. The KSA Government has allocatedSR385bn for fortifying the overall infrastructure of tourism sector in its 2009 budget, a 10.9%rise compared with the 2008 budget. The rapid development of infrastructure facilities,liberalization of airlines, capacity expansion at airports, and SCT’s easing of restrictions on nonreligiousvisas and introduction of multiple-entry one-year business visas will likely drive growthin KSA’s hotel and tourism sector. The World Travel and Tourism Council (WTTC) expect KSAto attract 45.3mn tourists by 2020. Furthermore, WTTC also expects revenue from KSA’stourism sector to increase to USD56.1bn in 2016, driven largely by religious tourism. Thesefactors will also underpin growth in the hotel industry, with hotel revenue expected to grow 4%annually to reach SAR14.3bn by 2020.However, we expect the growth in the tourism sector of KSA to be slow in the near-term asdiscretionary spending, and hence travel rate, take a hit in case of domestic as well as foreignJUNE 2009SAUDI ARABIA FACTBOOK106