According to the latest Middle East Travel Market Report by Insight Out Consultancy, in partnership with Phocuswright, Saudi Arabia’s hospitality market recorded US$17 billion in gross bookings in 2023, marking a 16% year-on-year growth. This impressive expansion underscores the kingdom’s efforts to position itself as a global tourism hub, driven by the ambitious Vision 2030 initiative.
Key developments such as the Red Sea Project, Neom City, and the cultural restoration of AlUla are reshaping the country’s tourism offerings. These projects are crucial to diversifying Saudi Arabia’s appeal, extending beyond religious tourism to attract a wide range of leisure, adventure, and business travellers.
Vision 2030: expanding the tourism landscape
Vision 2030 is central to Saudi Arabia’s long-term economic strategy, aiming to reduce reliance on oil by expanding sectors like tourism. As part of this vision, the kingdom plans to triple its hotel room capacity by 2030, with investments covering a range of accommodation types, from luxury resorts to budget options. Additionally, the forthcoming launch of Riyadh Air and the expansion of aviation infrastructure will further enhance the country’s ability to welcome international visitors.
The report by Insight Out and Phocuswright highlights the rapid evolution of Saudi Arabia’s tourism infrastructure. A key trend is the rise of online bookings, which accounted for 48% of the market in 2023, reflecting the growing role of digital platforms in shaping travel choices.
Regional competition drives innovation
Saudi Arabia’s tourism boom is part of a broader regional trend. The UAE continues to dominate the Middle Eastern travel market. In 2023, the UAE saw gross bookings reaching an impressive $44.5 billion—a 12% increase from the previous year. This growth was driven by strategic investments in airline routes, hotels, and attractions, supported by the country’s advanced tourism infrastructure. The hotel sector alone saw a 16% rise in bookings, fuelled by a diverse range of accommodations and increased domestic and inbound tourism.
The aviation sector, dominated by Emirates and Etihad, experienced strong revenue growth, further solidifying the UAE’s status as a global aviation hub. Online Travel Agencies (OTAs) also gained significant traction, with bookings expected to rise even more in 2024. Despite challenges such as fluctuating demand and increasing competition from Saudi Arabia and Qatar, the UAE’s focus on innovation, sustainability, and diversification in tourism ensures its continued growth.
Qatar, building on the momentum of the 2022 FIFA World Cup, reached $16 billion in bookings. Looking ahead, Qatar’s tourism strategy focuses on diversifying offerings, developing cultural and ecotourism attractions, and leveraging technology to enhance travel experiences. Despite challenges like maintaining hotel occupancy during off-peak seasons, Qatar’s commitment to innovation and infrastructure development ensures sustained growth.
Egypt welcomed nearly 15 million visitors, signalling a strong recovery post-pandemic. The nation’s success is credited to effective safety measures, strategic marketing, and a global surge in travel demand. Despite challenges such as currency devaluation, geopolitical tensions, and global economic fluctuations, Egypt’s tourism sector remains resilient, with a 63% increase in gross bookings in local currency. The government’s ambitious plans, including expanding eco-friendly practices, diversifying accommodations, and enhancing infrastructure, aim to attract 30 million tourists by 2028.
These countries are collectively pushing the Middle Eastern tourism industry forward, with each nation seeking to modernise and diversify its offerings to remain competitive in the global market.
Digital transformation fuels growth
The digital revolution in the Middle East travel market reached a tipping point in 2023, with online bookings accounting for a remarkable 46% of total gross bookings. This growth was driven by increased adoption of customer-facing technologies by travel suppliers and rising demand from a tech-savvy customer base. Online travel agencies saw a 14% year-over-year increase in booking values, with hotels making up 55% of these bookings. Airlines and car rentals also experienced substantial growth in digital bookings, contributing to the ongoing digital transformation of the region’s travel industry.
Li Hawkins, Managing Director of Insight Out Consultancy commented, “The sector is rapidly evolving particularly with the acceleration of digital technology and the increasing demand for experiential travel. With these significant transformations in the travel landscape in the region, comes higher expectations from today’s visitors to the Middle East who seek more profound, meaningful engagements that showcase the rich history and diverse traditions of the region.”
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Photo – top of page: View of the lobby at Al Faisaliyah hotel (photo STA)
