Saudi Arabia wants big spenders for the first part of its Neom megaproject

• Saudi Arabia plans to open the first part of its Neom megaproject this year.
• Sindalah, an island resort, is aimed at a luxury clientele and the global yachting community.
• Saudi Arabia is pushing to distinguish itself in the high-end luxury market to compete with Dubai.

Saudi Arabia plans to open the first region of its Neom megacity by the end of the year.

The island of Sindalah will provide the first physical glimpse into the ambitious desert project, which has reportedly been scaled back from its initial plans due to financial struggles.

Developers say they want the island to be an "exclusive gateway to the stunning Red Sea," adding that they planned to cater to luxury clientele and the global yachting community.

Neom recently ended investor roadshows in China by confirming the luxury island resort would open this year, Arab News reported. It's set to have three luxury hotels, a golf course and sports club, beach club, marina, and dozens of restaurants and shops.

In January Marriott International said it had signed an agreement to bring Apartments by Marriott Bonvoy to Sindalah. Chadi Hauch of the hotel operator said the concept was a "great fit" for the island and reflected a "growing desire for premium and luxury apartment-style accommodation" from travelers.

The following month Saudi music entertainment company, MDLBEAST, announced it would operate the Sindalah Beach Club on the island.

Vives, Neom's chief urban planning and islands officer, said in a press release that Sindalah will be a "new model for luxury travel and living."

Capturing the luxury tourism market

The Saudi government's focus on the luxury market is an attempt to distinguish itself from nearby Dubai, part of the United Arab Emirates.

"Dubai goes for the mass market of people wanting to go and have fun in the winter," Kristian Coates Ulrichsen, a fellow for the Middle East at Rice University's Baker Institute for Public Policy, told Business Insider.

"The Saudis are increasingly pushing themselves toward a high-end luxury market, which is what Sindalah and, to some extent, some of the other Red Sea projects are going to cater for," he said.

Saudi Arabia hasn't been shy about its tourism aspirations, claiming it aims to attract between 100 million and 150 million visitors by 2030.

However, Dubai is a formidable competitor. It already has a 20-year head start in the tourism race, both in terms of infrastructure and aspirational appeal. It also has Emirates, the popular long-haul airline that brings tens of millions of people through Dubai annually.

If Neom's ambitious plans become a reality, the Saudis are betting that their megaprojects can attract some high-end travelers from the glitz and glamor of its neighbor.

Managing ambition

Developing luxury resorts like Sindalah may also help Saudi Arabia encourage tourism sooner by starting smaller.

Sindalah is one of the more realistic elements of Neom's futuristic plans. It pales in comparison to structures like the mirrored "horizontal skyscraper" known as The Line.

"It's less ambitious in scope and scale," Ulrichsen said. "That might mean that it's more realistic to open first."

Recent reports have indicated the Saudis may be facing a harsh reality when it comes to financing some of the megaprojects included in Saudi Crown Prince Mohammed bin Salman's Vision 2030 project.

Previous deadlines have already been pushed back for some of Neom's more ambitious projects.

Earlier this month, Bloomberg reported that the Gulf Kingdom had reduced estimates for the number of people expected to live in The Line.

The report said the realities of some of the trillion-dollar investments included in the Vision 2030 project were starting to cause alarm at the highest level of the country's government.

Neom did not immediately respond to a request for comment from Business Insider.