Saudi Arabia’s tourism sector generated US$22 billion in visitor spending during the first quarter of 2026, with tourist numbers rising 8% year-on-year to 37.2 million. Yet behind the headline growth lies a more nuanced story – one that highlights the enduring importance of high-spending international visitors, the continued strength of religious tourism and the increasingly divergent performance of the Kingdom’s hospitality markets.
According to the latest Saudi Arabia Hospitality and Tourism Snapshot from Cavendish Maxwell, domestic tourism continues to be the primary driver of visitor growth.
Between January and March, domestic travel increased by 16% to 28.9 million trips, accounting for 78% of all tourism activity in the Kingdom.
International arrivals, meanwhile, fell 13% to 8.3 million visitors as geopolitical tensions affected regional travel patterns and prompted some airlines to suspend services.
However, while overseas visitors represented just over one-fifth of total arrivals, they generated almost three-fifths of total tourism expenditure.
International visitors spent approximately US$12.8 billion during the quarter, compared with US$9.3 billion generated by domestic travellers. In other words, 22% of visitors accounted for 58% of tourism revenue.
Even more tellingly, although international arrivals fell by 13%, visitor spending declined by only 7%, indicating that average expenditure per visitor increased compared with last year.
For Saudi Arabia’s luxury tourism sector, the figures reinforce a critical reality: while domestic tourism is delivering volume, international travellers continue to provide a disproportionate share of economic value.
Religious tourism remains the Kingdom’s strongest hospitality performer
The data also confirms that religious tourism remains one of Saudi Arabia’s most resilient and strategically important tourism segments.
Accounting for nearly 20% of overall tourism activity and approximately 40% of inbound tourism, pilgrimage travel continues to underpin demand across the hospitality sector. The impact is particularly evident in Makkah and Madinah, which significantly outperformed most other destinations during the first five months of 2026.
Makkah recorded occupancy levels of 73%, up more than 12% year-on-year, while average daily room rates surged by more than 24% to approximately US$245 per night. The strong performance reflects demand generated by Ramadan, Eid and the Hajj season, which once again demonstrated the city’s unique ability to attract large volumes of visitors while simultaneously supporting premium pricing.
Madinah also delivered impressive results, achieving occupancy of 76% and average daily rates of approximately US$234 per night. While occupancy was slightly lower than last year, room rates continued to climb, highlighting the market’s ongoing strength. Analysts expect Madinah’s June results to benefit from the traditional post-Hajj movement of pilgrims from Makkah to the Prophet’s Mosque.
Kevin Duffield, Director of Built Asset Consulting at Cavendish Maxwell, noted that continued investment in pilgrimage infrastructure and accommodation capacity should support sustained growth across both cities.
Riyadh faces a different challenge
While the holy cities continue to thrive, conditions elsewhere in the Kingdom are more varied.
Perhaps the most surprising finding in the report concerns Riyadh. Despite the capital’s emergence as a major business, entertainment and events destination, hotel occupancy fell by more than 20% year-on-year to 48%, while average daily rates declined almost 7% to approximately US$206.
Jeddah also experienced softer conditions, with occupancy edging down to 67% and room rates declining to approximately US$169 per night. Similar trends were recorded in Al Khobar and Dammam.
These figures do not necessarily reflect weakening demand. Instead, they illustrate one of the challenges associated with Saudi Arabia’s unprecedented hospitality expansion programme: supply is increasing rapidly across many destinations, creating short-term pressure on occupancy and room rates even as visitor numbers continue to grow.
More than 105,000 new hotel rooms planned
Few tourism markets anywhere in the world are expanding at the scale currently seen in Saudi Arabia.
The Kingdom currently has approximately 176,000 hotel rooms spread across more than 1,200 hotels. Between now and 2030, a further 105,500 rooms across 382 hotels are expected to enter the market.
The numbers are particularly striking in the pilgrimage sector.
Makkah already offers more than 64,000 hotel rooms and is expected to add a further 22,560 by 2030. Madinah currently has just over 22,000 rooms but has another 22,440 in development – effectively doubling its hotel capacity over the coming years.
Riyadh is expected to add more than 22,000 additional rooms, while Jeddah will gain over 12,000. Nearly 18,150 rooms across 82 hotels are scheduled to open during 2026 alone.
The scale of this development reflects the Kingdom’s confidence in future demand, particularly as a series of globally significant events draw closer.
Building towards Expo 2030 and the FIFA World Cup
Saudi Arabia’s tourism ambitions extend well beyond current visitor numbers.
The Kingdom is targeting 150 million annual domestic and international visitors by 2030, supported by transformational projects including the Red Sea, Diriyah, AlUla, NEOM and numerous other Vision 2030 initiatives.
Riyadh Expo 2030 and the FIFA World Cup 2034 are expected to attract more than 42 million visitors between them, creating substantial opportunities across hospitality, aviation, transport, culture and entertainment.
For travel advisors and tourism professionals, the latest data highlights two important realities. First, Saudi Arabia’s tourism growth story remains firmly intact despite geopolitical uncertainty. Second, while domestic tourism is driving volume, international travellers – particularly higher-spending visitors – continue to generate a disproportionate share of revenue.
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