Saudi Arabia To Add 362,000 New Hotel Rooms By 2030 To Boost Tourism

Amidst an ambitious national transformation, Saudi Arabia is on the verge of a significant expansion in its hospitality sector, with plans to introduce 362,000 new hotel rooms by the year 2030.

This development is part of a broader $110 billion investment aimed at redefining the kingdom's role in the global travel and tourism industry. This initiative is a key component of the Vision 2030 agenda, which seeks to diversify the country's economy and establish it as a leading destination for tourists worldwide.

The trajectory of growth within Saudi Arabia's tourism sector is evident, with international visitor numbers expected to soar to 70 million annually by 2030, up from 27.4 million in 2023 and reaching 30 million in 2024. This increase is a testament to the country's strategic efforts to boost its global tourism appeal, supported by a robust investment pipeline that underscores the kingdom's ambition.

Oussama El Kadiri, expert at Knight Frank, highlights the burgeoning investment potential within Saudi Arabia's tourism and hospitality sectors. "Fuelled by ambitious Vision 2030 goals, Saudi Arabia's tourism sector presents a compelling investment landscape, evidenced by its record-breaking $118.46 billion GDP contribution in 2023, accounting for 11.5% of the national economy. "This growth reflects the kingdom's strategic initiative to position itself as a leading global tourism destination," El Kadiri noted.

Moreover, Saudi Arabia's commitment to hosting major international events is poised to further accelerate its economic and tourism growth. The 2029 Asian Winter Games, World Expo 2030, and FIFA World Cup 2034 are among the high-profile events expected to attract global attention and visitors, reinforcing the kingdom's stature as a prime location for both leisure and business travelers.

The kingdom's hotel sector has seen remarkable revenue growth, with STR reporting a $5.6 billion income from hotel rooms between January and October 2024, marking a 3.5% increase compared to 2023 and a significant 26.5% rise from 2019. This growth is evident in key regions such as Riyadh and Madinah, where both occupancy and average daily rates (ADR) have shown substantial improvements.

For instance, Riyadh experienced a 16% increase in ADR, while Madinah saw a 5% rise in 2024. Philip Wooller, Senior Director at STR, Middle East & Africa, commented on the trend, "Saudi Arabia is undoubtedly one of the most exciting destinations in the world, undergoing a remarkable transformation into a world-class tourism hub. 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."