Saudi Arabia Hotel Market Analysis
The Saudi Arabia hotel market is experiencing a robust period of expansion, with the sector expected to grow from US$ 15.40 billion in 2024 to US$ 27.26 billion by 2033, driven by a CAGR of 6.55% between 2025 and 2033. Key drivers of this growth include the rise of upscale accommodations, the Saudi government’s strategic push to boost tourism through Vision 2030, and the introduction of visa reforms that have significantly boosted international visitor arrivals.
The hospitality sector in Saudi Arabia is being transformed by substantial government investments aimed at diversifying the economy, enhancing tourism, and creating a sustainable tourism infrastructure. These developments have placed Saudi Arabia on the global map as one of the fastest-growing travel destinations, attracting millions of visitors annually.
Request a free sample copy of the report: https://www.renub.com/saudi-arabia-hotel-market-p.php
Global Overview of the Saudi Arabia Hotel Industry
Saudi Arabia’s hospitality industry has witnessed significant growth in recent years, thanks to strategic government initiatives designed to promote tourism. According to the G20, Saudi Arabia is now recognized as the world’s fastest-growing travel destination, a testament to the success of its tourism policies. The United Nations World Tourism Organization (UNWTO) reported that the Kingdom’s international visitor numbers surged by 125% to pre-pandemic levels, welcoming nearly 94 million visitors in the last year alone. This resurgence highlights the ongoing recovery of the global tourism sector, with Saudi Arabia leading the charge.
In addition to these international achievements, Saudi Arabia is set to invest over USD 550 billion into new tourism and vacation projects, reinforcing its status as the largest global investor in the tourism sector. The goal is to increase annual tourist visits to 100 million by 2030 and to contribute 10% of GDP from tourism by the same year.
Market Drivers: What’s Fueling the Growth of the Saudi Hotel Industry?
1. Vision 2030: Diversifying the Economy and Promoting Tourism
One of the primary forces driving the Saudi hotel market is the ambitious Vision 2030 initiative, launched by Crown Prince Mohammed bin Salman. Vision 2030 aims to reduce Saudi Arabia’s dependency on oil revenues by diversifying the economy and boosting various sectors, with tourism and hospitality being central to this diversification. Key components of the initiative include the development of new airports, world-class transit systems, and mega-tourism projects like the Red Sea Project and NEOM.
These projects are designed not only to attract more international visitors but also to position Saudi Arabia as a major cultural and recreational hub. Vision 2030’s focus on enhancing tourism infrastructure, creating luxury hotel resorts, and expanding entertainment options has led to an increase in both domestic and international hotel investments.
2. Visa Reforms: Opening the Door to International Tourism
Saudi Arabia’s decision to ease visa restrictions and offer new e-visas and visa-on-arrival options for tourists from 49 countries has been a game-changer for the hospitality sector. This move has made the Kingdom far more accessible to international travelers, boosting both leisure and business tourism. The global tourism market has responded positively, with a notable increase in visitor numbers, driven by a combination of easier travel logistics and the country’s rising profile as a travel destination.
The government’s emphasis on hosting global events, including major sporting tournaments, concerts, and cultural festivals, has further fueled international interest in Saudi Arabia. These events not only increase visitor numbers but also help create a vibrant, culturally rich atmosphere that attracts travelers seeking unique and immersive experiences.
3. Increased Investment in Hospitality Infrastructure
Saudi Arabia’s rapid expansion of the hospitality infrastructure is another key driver of the hotel market. The development of new luxury and mid-range hotels, especially in cities like Riyadh, Jeddah, and Mecca, is helping to accommodate the growing number of both domestic and international visitors. As part of its broader tourism vision, the Kingdom is investing heavily in new hotels, resorts, and recreational facilities to cater to various types of tourists.
Regional Breakdown: A Closer Look at Key Markets
Makkah Hotel Market
Makkah is one of the central hubs of Saudi Arabia’s hotel industry, primarily driven by religious tourism. The city serves millions of Muslim pilgrims who visit annually for the Hajj and Umrah pilgrimages. Hotels in Makkah range from budget accommodations to luxury properties, particularly those located close to the Haram (the Grand Mosque). During peak pilgrimage seasons, the demand for hotel rooms soars, making Makkah one of the busiest hospitality markets in the Kingdom.
Saudi Arabia’s ongoing investments in the hospitality infrastructure in Makkah include major projects like the Makkah Royal Clock Tower, a landmark development that enhances the city’s status as a global pilgrimage destination. The government’s SAR 2.5 billion investment in Makkah’s hotel industry is expected to meet growing demand while improving the visitor experience.
Riyadh Hotel Market
Riyadh, the capital of Saudi Arabia, plays a pivotal role in the country’s hotel market, driven by business travel, government activities, and increasing leisure tourism. The city is a central hub for international conferences, exhibitions, and corporate events, making it a prime destination for both domestic and international tourists.
Riyadh boasts a wide range of accommodations, from upscale hotels in Olaya and Al Malaz to more affordable options for budget-conscious travelers. The ongoing expansion of Riyadh’s infrastructure as part of Vision 2030 has further boosted the demand for hotel rooms, especially in preparation for high-profile business events. As Riyadh becomes a key player in Saudi Arabia’s broader business and leisure tourism landscape, the hotel market in the capital is poised for significant growth.
Jeddah Hotel Market
Jeddah, Saudi Arabia’s second-largest city and its commercial capital, is also seeing a surge in hotel developments. As a major port city and gateway for pilgrims traveling to Makkah, Jeddah attracts both leisure and business travelers. The demand for hotels in Jeddah is particularly high during the Hajj and Umrah seasons, though the city also caters to a growing number of tourists year-round.
Recent investments in Jeddah’s hotel industry have focused on improving luxury and premium accommodations, with a focus on delivering world-class service. The city is also expanding its tourism infrastructure, with new developments along the Red Sea coast attracting tourists for both leisure and eco-tourism experiences.
Key Players in the Saudi Arabia Hotel Market
Several major global and regional hotel brands are operating in the Saudi market, including:
- Dur Group: A significant player in the Saudi hotel industry, known for a range of properties across various price points.
- InterContinental Hotels Group (IHG): A global hospitality leader with a strong presence in the Kingdom, offering luxury and mid-range hotels.
- Marriott International: One of the world’s largest hotel groups, Marriott has expanded its footprint in Saudi Arabia, introducing new brands and upscale properties.
- Accor Hotels: Known for its extensive portfolio of brands, Accor continues to grow its presence in Saudi Arabia’s hospitality sector.
- Hilton Hotels: With a strong reputation for luxury and business travel accommodations, Hilton is expanding its offerings in key Saudi cities.
- Al Hokair Group: A regional hotel operator that has made significant investments in the Saudi market.
Related Report :
Recent Developments in the Saudi Arabia Hotel Sector
- May 2023: Marriott International introduced its 31st brand, City Express by Marriott, after acquiring the City Express brand portfolio from Hoteles City Express. This addition expands Marriott’s footprint in Saudi Arabia, offering affordable and accessible accommodations for both business and leisure travelers.
- April 2023: Taiba Investments Company, based in Saudi Arabia, acquired a 100% stake in Dur Hospitality Company. This move is part of an ongoing effort to streamline and strengthen the company’s position in the rapidly expanding Saudi hotel market.
About the Company:
Renub Research is a Market Research and Consulting Company. We have more than 15 years of experience especially in international Business-to-Business Researches, Surveys and Consulting. We provide a wide range of business research solutions that helps companies in making better business decisions. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our wide clientele comprises major players in Healthcare, Travel and Tourism, Food Beverages, Power Energy, Information Technology, Telecom Internet, Chemical, Logistics Automotive, Consumer Goods Retail, Building, and Construction, Agriculture. Our core team is comprised of experienced people holding graduate, postgraduate, and Ph.D. degrees in Finance, Marketing, Human Resource, Bio-Technology, Medicine, Information Technology, Environmental Science, and many more.
Media Contact:
Company Name: Renub Research
Contact Person: Rajat Gupta, Marketing Manager
Phone No: +91-120-421-9822 (IND) | +1-478-202-3244 (USA)
Email: mailto:info@renub.com
0 Comments