Exercise 3

Here is an excerpt from the article “24,000 visitors to Saudi Arabia within 10 days of new tourist visa system” that appeared on October 7, 2019 in Arab News.

24,000 foreign visitors entered Saudi Arabia within the first 10 days of the implementation of instant tourist visas at airports in the Kingdom, according to a Saudi Foreign Ministry statement on Monday.

The ministry revealed the number of visitors from the top 10 countries using the new system — with China topping the list, with the UK and the US in second and third respectively.

European nations France and Germany were also in the list, with Canada, Malaysia and Russia just behind the top three. Australia and Kazakhstan were in ninth and tenth place.

Your task is to conduct an economic analysis of the impact of tourist visas on tourism in Saudi Arabia. Of course, “tourism” is a very broad term; hence, I would like you to focus on the lodging industry (hotels, inns, motels, etc.). Please keep in mind that you are to conduct an economic analysis (equilibrium price and quantity). You should determine what (if anything) will happen with the demand and supply curves; provide a graphical analysis (supply-demand) and explanation. Be as specific as possible.