A new whitepaper released by the Saudi Ministry of Tourism, titled Hospitality Investment Opportunities in Saudi Arabia, paints a compelling picture: Saudi Arabia’s hospitality sector is entering a phase of explosive growth, fuelled by surging visitor numbers, landmark infrastructure investment, and unprecedented government support.
The report, developed in collaboration with leading industry stakeholders, outlines why now — more than ever — is the optimal time for international and local investors to enter or expand within the Kingdom’s rapidly evolving tourism landscape.
Saudi Arabia’s tourism sector has already surpassed its original Vision 2030 target — seven years ahead of schedule. In 2023, the Kingdom welcomed more than 100 million visitors, both domestic and international, compared to an initial goal of reaching that figure only by 2030.
Following this achievement, Saudi Arabia has now set a new, even more ambitious target: 150 million annual visitors by 2030, with 70 million of these coming from international markets.
Visitor spending is rising sharply in tandem with arrivals. The first half of 2024 saw tourists spend SAR 150 billion (USD 40 billion) within the Kingdom. In 2023, the tourism sector’s total contribution to the economy reached approximately USD 68 billion, representing 4.4% of Saudi Arabia’s GDP. By 2030, the Kingdom aims to increase this contribution to 10%, highlighting tourism as a critical pillar of its economic diversification strategy.
Infrastructure development on an unprecedented scale
Saudi Arabia is not leaving growth to chance. Massive investments in infrastructure are laying the foundation for sustainable tourism expansion. Among the headline projects:
- King Salman International Airport, which upon completion will be the world’s largest, capable of handling 120 million passengers annually by 2030 and 185 million by 2050.
- The expansion of Saudi Arabian Airlines (Saudia) and the launch of Riyadh Air, a new national carrier, to dramatically increase global air connectivity.
- Direct air connectivity has grown by over 40% since 2019, ensuring easier access from major international markets.
- Giga-projects like NEOM, The Red Sea, Amaala, AlUla, Diriyah, and Qiddiya are creating entirely new tourism ecosystems designed around sustainability, luxury, culture, and adventure.
Collectively, these investments are expected to mobilise more than USD 800 billion by 2030 across tourism-related sectors, offering unparalleled opportunities for hotel operators, developers, and investors.
Saudi Arabia strengthens ties with China as an Approved Destination
Effective 1 July 2024, Saudi Arabia officially joins China’s Approved Destination Status (ADS) programme, enabling Chinese citizens to access the Kingdom’s eVisa system. This development marks a major milestone in Saudi Arabia’s efforts to tap into the world’s largest outbound travel market and is expected to drive strong growth in Chinese visitor numbers. The Kingdom has ambitious plans: by 2030, it aims to make China its third largest source market for international arrivals.
To support this surge, Saudi Arabia has significantly expanded air connectivity since 2023, with new direct flights launched by Air China, China Eastern, and China Southern, alongside existing Saudia services. These initiatives represent a 130% increase in inbound seat capacity and a doubling of weekly flight frequencies compared to the previous year.
Beyond connectivity, Saudi Arabia has introduced tailored travel products and forged strategic partnerships to enhance both group and flexible independent travel (FIT) experiences. The Saudi Tourism Authority has worked closely with trusted Chinese brands such as UnionPay, Trip.com, Huawei, and Tencent to streamline the traveller journey — from visa processes to digital platforms like the ‘Visit Saudi’ website — all now increasingly Mandarin-integrated across airports, tourist sites, and hospitality services.
“Saudi’s approval as a tourist destination for Chinese visitors reflects our continuous efforts and partnerships with leading Chinese organisations,” said Fahd Hamidaddin, CEO of the Saudi Tourism Authority. “We are committed to providing Chinese travellers with a seamless, enjoyable, and safe experience.”
In total, Saudi Arabia aims to attract five million Chinese tourists by 2030, reinforcing its position as a rising global tourism powerhouse.
Hospitality supply: a booming pipeline
The Kingdom’s hospitality supply is expanding at pace to match surging demand:
- As of mid-2024, Saudi Arabia had 426,000 licensed hotel rooms.
- An additional 74,000 hotel rooms are actively under development — representing almost 40% of the entire Middle East hotel development pipeline.
- Internationally branded hotel rooms currently account for 47% of supply, expected to rise to 65% as new partnerships and projects come online.
Notably, while the luxury segment continues to dominate new openings, there is growing diversification into midscale hotels, serviced apartments, and eco-tourism lodges to meet the evolving needs of business travellers, families, digital nomads, and new leisure segments.
Government reforms and incentives: a new investment landscape
The whitepaper highlights a range of measures introduced to facilitate and accelerate hospitality investment:
- Tourism Investment Enabler Program (TIEP) — drastically reduces licensing complexity and accelerates timelines (licences can now be obtained in five working days).
- Zero municipality licensing fees — applying across all accommodation types, significantly reducing cost structures.
- Tourism Development Fund (TDF) — has committed over SAR 7.4 billion (USD 2 billion) to support more than 1,200 tourism SMEs and larger-scale projects.
- Public-private partnerships (PPPs) — the government is proactively opening access to land banks, infrastructure, and development capital for co-investment.
- Financial incentives — including tax breaks, long-term land leases, and support for international companies establishing regional headquarters in Riyadh.
The result is a uniquely investor-friendly environment, rare among emerging global tourism markets.
Demand drivers: beyond religious tourism
Saudi Arabia’s historical strength in religious tourism remains critical, with Hajj and Umrah visitors accounting for around 55% of total tourism spend in 2023. However, diversification is rapidly underway:
- Leisure travel now represents 43% of the domestic market, driven by new destinations, shopping experiences, festivals, and heritage sites.
- Business travel is expanding with the rise of MICE tourism (Meetings, Incentives, Conferences, and Exhibitions), backed by major new convention centres and international event hosting.
- Sports tourism is surging, with Saudi Arabia hosting the Asian Winter Games 2029, FIFA World Cup 2034, and dozens of other global sporting events.
- New source markets are being aggressively developed, particularly China, where Saudi Arabia is targeting five million visitors by 2030 with newly relaxed visa regimes and direct flight expansions.
This diversified demand base reduces reliance on any single market and builds resilience into the long-term tourism growth story.
Talent development: supporting sustainable growth
The success of the hospitality sector relies on a skilled workforce. Saudi Arabia’s initiatives to develop human capital are ambitious:
- Over 500,000 Saudis have already been trained for tourism and hospitality roles since 2019.
- Programmes such as Tourism Pioneers aim to ensure that the sector’s rapid expansion is supported by a professional, customer-focused workforce.
- Saudi Arabia plans to create 1.6 million additional tourism jobs by 2030, offering investors and operators a deep, local talent pool.
A once-in-a-generation opportunity…
Saudi Arabia’s hospitality sector is thus at the heart of one of the most significant economic transformations of the 21st century. The Kingdom’s combination of soaring demand, exceptional government support, massive infrastructure investment, and an increasingly open business environment creates a unique proposition for investors.
With the sector forecast to grow at an annual rate of over 11% between now and 2030, and with national strategies firmly aligned towards achieving global leadership in tourism, the time to invest in Saudi Arabia’s hospitality sector is now.
This is not merely an opportunity to tap into a booming market — it is a chance to help shape the future of global tourism itself.
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Photo – top of page – Ritz Carlton Reserve Red Sea – RSG
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