Saudi Arabia is set to expand its hospitality sector by adding 362 000 new hotel rooms by 2030. This ambitious project is part of a $110 billion investment aimed at enhancing the kingdom’s tourism and hospitality landscape, as detailed in data released ahead of the 2025 Future Hospitality Summit (FHS) Saudi Arabia.

The expansion is aligned with the country’s Vision 2030 initiative, which aims to position Saudi Arabia as a global leader in the travel industry. This initiative is expected to create significant investment opportunities and set new benchmarks in the hospitality sector, allowing investors to engage actively in the kingdom’s long-term economic transformation.

Oussama El Kadiri, the partner and head of Hospitality, Tourism, and Leisure at Knight Frank, noted that Saudi Arabia’s tourism sector is a compelling investment landscape. He highlighted that the sector contributed a record-breaking SAR 444.3 billion to the GDP in 2023, making up 11.5 percent of the national economy. El Kadiri also pointed out that international arrivals to Saudi Arabia reached 30 million in 2024, a rise from 27.4 million in 2023, reflecting a strong upward trend in tourism.

Looking ahead, Saudi Arabia aims to attract 70 million international visitors annually by 2030. This growth is anticipated to be supported by a series of major global events, including the 2029 Asian Winter Games, World Expo 2030, and the FIFA World Cup 2034. These events are expected to significantly enhance the kingdom’s tourism and hospitality sectors, boosting visitor numbers and improving Saudi Arabia’s global reputation as a top destination for leisure and business activities.

According to STR, a leading hospitality data provider, hotel room revenue in Saudi Arabia reached $5.6 billion from January to October 2024. This marks a 3.5 percent increase from the previous year and a 26.5 percent rise compared to 2019. Key regions such as Riyadh and Medina have experienced notable growth in both occupancy rates and average daily rates (ADR), with expectations for continued growth in the coming years.

In Riyadh, the ADR increased by 16 percent in 2024, while Medina saw a 5 percent rise. Philip Wooller, the senior director for the Middle East and Africa at STR, stated that Saudi Arabia is transforming into a world-class tourism hub. He emphasized the importance of balancing the influx of new hotel developments with a competitive market edge. While strong demand is expected to drive success, there may be a slight softening in hotel rates as new supply enters the market, which will be crucial for attracting new demand and maintaining healthy occupancy levels across the kingdom.