March 19, 2025 | Press Release

Saudi Arabia is making significant strides in its hospitality sector, with plans to deliver 362,000 new hotel rooms by 2030 as part of a $110 billion expansion. The announcement comes ahead of the 2025 edition of the Future Hospitality Summit (FHS) Saudi Arabia, scheduled to take place from May 11-15.

This massive expansion aligns with the kingdom’s Vision 2030 strategy, reinforcing Saudi Arabia’s commitment to becoming a global leader in the travel and tourism industry. With international arrivals reaching 30 million in 2024, up from 27.4 million in 2023, the country’s tourism and hospitality sectors are experiencing a robust upward trajectory.

Strategic Growth and Investment Prospects
Industry experts highlight that Saudi Arabia’s hospitality growth is unlocking vast investment opportunities. According to Oussama El Kadiri, partner and head of Hospitality, Tourism, and Leisure at Knight Frank, the tourism sector’s contribution to GDP hit a record SAR444.3 billion in 2023, accounting for 11.5% of the national economy. This surge underscores the kingdom’s strategic ambition to position itself as a premier global tourism destination.

With a target of 70 million international visitors annually by 2030, Saudi Arabia is set to further enhance its tourism infrastructure, making it an attractive market for investors and hospitality stakeholders.

Impact of Global Events on Tourism
Saudi Arabia’s economic transformation is poised to receive a further boost through major upcoming global events, including the 2029 Asian Winter Games, World Expo 2030, and FIFA World Cup 2034. These high-profile events are expected to elevate the country’s global standing and drive increased visitor numbers, cementing its reputation as a key destination for leisure, business, and mega-events.

Hotel Industry Performance and Market Dynamics
Saudi Arabia’s hotel sector is already witnessing strong performance metrics. According to hospitality data provider STR, hotel room revenue reached $5.6 billion between January and October 2024, marking a 3.5% increase from 2023 and a 26.5% surge compared to 2019.

Major cities such as Riyadh and Medina recorded significant growth in occupancy rates and average daily rates (ADR) in 2024. Riyadh saw a 16% increase in ADR compared to 2023, while Medina experienced a 5% rise.

Challenges and Future Outlook
Despite the sector’s rapid growth, industry experts caution that managing the balance between new hotel developments and market sustainability is key. Philip Wooller, senior director for the Middle East & Africa at STR, emphasized that while strong demand will drive success, an influx of new supply may lead to short-term rate adjustments. This transition phase will be critical in attracting fresh demand and maintaining stable occupancy levels.

As Saudi Arabia continues its ambitious hospitality expansion, the kingdom is well on its way to becoming one of the most dynamic and sought-after tourism destinations in the world.