RIYADH: Saudi Arabia’s tourism sector is projected to grow by 8 percent in 2025, building on a year of record-breaking performance and continued progress under Vision 2030, according to a top official. 

Speaking at the Future Hospitality Summit in Riyadh, Mahmoud Abdulhadi, deputy minister for destination enablement at the Ministry of Tourism, said direct tourism spending rose 14 percent in 2024, compared to the SR256 billion ($68.26 billion) recorded in 2023. 

“2023 was our first year that we hit 100 million. While I can’t tell you the exact numbers, hopefully, some of you can do the math. We are going to see growth this year. We’re talking 8 percent growth in the number of visitors,” he said. “We delivered SR256 billion worth of direct spend in 2023, and from 2023 to 2024, we’re looking at roughly 14 percent growth in spend.”   

He added, “There was some healthy skepticism around some of the objectives and what we wanted to do. But I think, as Saudis, we have proven time and time again that when we make promises, we deliver, and Vision 2030 is no exception to this.” 

Abdulhadi noted the Kingdom’s broader economic shift, stating that 50-51 percent of Saudi Arabia’s gross domestic product now comes from the non-oil sector, with 47 percent contributed by the private sector. 

“Hospitality is in our DNA — something we’ve been doing for thousands of years,” he said.  

He further emphasized the growing role of leisure tourism in driving sectoral change, stating: “Leisure today accounts for, if we’re looking at our domestic visitors, over 35 percent of visitors and over 30 percent of spend.”  

For international visitors, he noted that leisure contributes over 20 percent of both arrivals and spending. “We’ve had a major shift in how we do things, what we do, and it’s delivering in terms of the numbers,” Abdulhadi said. 

Structural reforms have played a key role, he said, including a 70 percent reduction in hotel operation fees since 2019 and streamlined licensing procedures, which led to a 168 percent increase in licensed tour guides.  

A new hospitality incentive program targeting emerging destinations has attracted nearly SR3 billion in private sector investment.  

“It is our ambition that tourism investment happens without somebody talking to the ministry or a government entity saying how, where, and help,” Abdulhadi said. “So, once we reach that position of maturity, our role moves from facilitator to pure regulator.”   

Opening the second day of the summit, Jonathan Worsley, chairman and CEO of The Bench, a hospitality investment and aviation development business events organizer, underscored the sector’s momentum, citing the launch of Riyadh Air, which aims to serve 100 international destinations by 2030.  

“They’re playing a crucial role in developing the tourism strategy for Vision 2030,” he said. 

Prince Bandar bin Saud bin Khalid, secretary general of the King Faisal Foundation and chairman of Al Khozama Investment Co., emphasized the cultural transformation driving the sector.   

“Saudi Arabia is no longer just about infrastructure and service,” he said. “It’s about identity, culture, talent, and future leadership.” 

He added: “In the coming days, we will explore many of the challenges and opportunities ahead — and most importantly, how to develop the human capital needed to sustain this extraordinary momentum.”   

From the private sector, Sultan Bader Al-Otaibi, CEO of Taiba Investments, announced plans to open over 2,000 rooms across Saudi cities in 2025. “We believe hospitality is more than business — it’s a way to connect with people and create a memory,” he said. 

The company’s first opening will be the soft launch of Saudi Arabia’s first Rixos hotel in Jeddah, followed by Makarem Burj Al Madinah and Novotel Al Madinah, two flagship properties expanding the group’s domestic and international brand partnerships. 

Coinciding with the summit, Knight Frank released its Saudi Arabia Hospitality Market Review 2025, offering fresh insight into the industry’s trajectory. According to the report, the Kingdom’s hospitality market is expected to reach 362,000 hotel keys by 2030. Currently, 167,500 keys are in operation, with an additional 99,500 under construction or in the final planning stages.  

Of the pipeline, 78 percent is expected to fall into the luxury, upper-upscale, or upscale categories, while 61 percent of existing inventory already fits within those segments. 

Saudi Arabia recorded its highest-ever travel surplus in 2024 at SR49.8 billion, up from SR46.2 billion in 2023, driven by a 13.8 percent increase in inbound visitor spending. Average hotel occupancy in March stood at 70 percent, with Madinah leading at 81 percent.  

Religious tourism also surged, with 35.8 million pilgrims performing Umrah in 2024 — a 33 percent year-on-year increase — including 16.9 million international pilgrims. The Hajj quota for 2025 has been raised to 2 million, up 11 percent from 2024. 

Giga-projects such as NEOM, Rua Al Madinah, Jabal Omar, and the Red Sea Project are projected to deliver 252,000 hotel keys in the Holy Cities by 2030, with 64 percent of them in the four- and five-star categories. 

With a national target of 150 million annual visits by 2030, Saudi Arabia is integrating its tourism, religious, and hospitality strategies to cement its status as a leading global destination. 

RIYADH: Investor confidence in Saudi Arabia’s hospitality sector is being reinforced by tangible progress on Vision 2030 goals, including accelerating international interest and a surge in hotel signings, a major gathering has heard. 

On the second day of the Future Hospitality Summit in Riyadh, global and local executives cited a powerful combination of leadership, domestic demand, and delivery momentum as key factors driving investment decisions.  

Vision 2030 is an initiative designed to diversify the Saudi economy away from oil, with ambitious reforms aimed at boosting tourism, entertainment, and non-oil industries. 

In a panel discussion, Christophe Beauvilain, managing partner at Pygmalion Capital, said Saudi Arabia presents a compelling opportunity for investors, describing Vision 2030 as “extremely ambitious and exciting.”  

He highlighted the rapid achievement of tourism milestones as a key performance signal, saying: “When the Vision was first launched, the goal was to attract 100 million tourists by 2030. That target was reached by 2023, so it was revised upward to 150 million by 2030 — and I wouldn’t be surprised if that figure is raised again.”  

Hotel signings, Beauvilain added, are a critical metric for institutional investors.  

“There has certainly been a flurry of activity, particularly among international brands signing new projects,” he said.  

While macroeconomic and geopolitical risks remain a consideration, Beauvilain noted the decreasing reliance on oil revenues as a positive structural shift.  

“The oil sector’s contribution to gross domestic product is declining rapidly, which is a very positive and encouraging sign,” he said.  

Amin Ismail, managing director of travel and tourism-focused private equity firm Certares, emphasized the changing global perception of Saudi Arabia. 

“The leadership has done a pretty good job marketing the destination and raising global awareness,” he said.  

“On a personal note, I was in Miami a couple of months ago, and someone I never expected mentioned they were interested in visiting Riyadh. They even referenced Diriyah by name,” Ismail said.  

The managing director believes the country’s cultural depth is emerging as a differentiating factor.  

“Saudi Arabia’s strength lies in its culture and heritage. The hospitality, the people, and the unique cultural experience are what really draw visitors,” he said.  

Noting the rising interest among global travelers — including his own family — he added, “Today, it’s at the top of their (his family’s) travel bucket list — with Japan coming second.”  

On the domestic front, Saudi Arabia’s hospitality development is being backed by robust local demand and substantial government support.  

In a separate panel, Naif Al-Madi, chief business officer of the Tourism Development Fund, said: “Saudi Arabia has a unique advantage in that we have a large domestic market,” adding that it accounts for approximately 70 percent of the tourism sector, compared to 30 percent from international tourism. 

He added that while global economic fluctuations may affect other markets, “we believe Saudi Arabia will feel only minimal shock.”  

The fund has already supported over 2,400 tourism-related projects, and is expected to deliver more than 9,000 rooms. 

Luc Delafosse, vice president of Hospitality Management at Al Khozama Investment Co., said the pace and consistency of project execution are setting Saudi Arabia apart.  

“What I was very pleased to hear this morning is that 90 percent of the projects within the Kingdom are actually being delivered,” he said.  

“Another key figure that stood out was that 50 percent of the development currently underway in Saudi Arabia is being produced and delivered by non-oil sectors.”  

Delafosse, who has been in the Kingdom since 2019, noted the transformation firsthand.  

“It’s not just about the number of projects, but also the overall evolution of the sector,” he said.  

“The Kingdom has truly led the way in hospitality — not just in the region, but globally,” he added.