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Saudi Arabia is set to add 362,000 new hotel rooms by 2030 as part of a $110bn expansion of its hospitality sector, according to data released ahead of the 2025 edition of the Future Hospitality Summit (FHS) Saudi Arabia.
The event will be held from May 11-15.
The kingdom’s ambitious growth in infrastructure, real estate, tourism, and hospitality is in line with Vision 2030 and is positioning Saudi Arabia as a global leader in the travel and tourism industry.
This expansion is creating substantial investment opportunities and setting new industry benchmarks, allowing investors to actively participate in the country’s long-term economic transformation, according to industry experts.
Strategic growth and investment opportunities in the kingdom
Oussama El Kadiri, partner and head of Hospitality, Tourism, and Leisure at Knight Frank, stated: “Fuelled by ambitious Vision 2030 goals, Saudi Arabia’s tourism sector presents a compelling investment landscape, evidenced by its record-breaking SAR444.3bn GDP contribution in 2023, accounting for 11.5 per cent of the national economy. This growth reflects the kingdom’s strategic initiative to position itself as a leading global tourism destination.”
El Kadiri also highlighted that international arrivals to Saudi Arabia reached 30 million in 2024, up from 27.4 million in 2023, demonstrating a robust upward trajectory.
This growth is expected to continue, with Saudi Arabia aiming to attract 70 million international visitors annually by 2030.
Impact of global events on Saudi’s hospitality, tourism sectors
The kingdom’s economic transformation will be further bolstered by a series of high-profile global events.
The 2029 Asian Winter Games, World Expo 2030, and the FIFA World Cup 2034 are expected to drive further growth in tourism, hospitality, and related industries, not only increasing visitor numbers but also enhancing Saudi Arabia’s global reputation as a premier destination for leisure, business, and mega-events.
Hotel sector performance
According to leading hospitality data provider STR, hotel room revenue in Saudi Arabia reached $5.6bn between January and October 2024, a 3.5 per cent increase from 2023 and 26.5 per cent higher than in 2019.
Key regions such as Riyadh and Medina saw significant growth in both occupancy and average daily rate (ADR) in 2024, with growth expected to continue in the coming years.
In Riyadh, ADR increased by 16 per cent on 2023, while Medina saw a 5 per cent rise.
Market challenges and forecast
“Saudi Arabia is undoubtedly one of the most exciting destinations in the world, undergoing a remarkable transformation into a world-class tourism hub,” said Philip Wooller, senior director, Middle East & Africa at STR.
“The key to sustaining this momentum lies in balancing the influx of new hotel developments with a competitive market edge. While we anticipate tremendous success driven by strong demand generators, STR also forecasts a slight softening in rates as new hotel supply enters the market in the short term. This adjustment will be crucial in attracting fresh demand and ensuring healthy occupancy levels across the kingdom.”
Read: Dubai to add over 11,300 hotel rooms by 2027; nearly 4,620 expected in 2025
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