Saudi outpaces neighbours as prime tourist destination

Hyatt Hotels Newsroom

• Kingdom wants 100m annual visitors by end of decade 
• Major tourism developments such as Red Sea Global underway
• Hotel brands including Hyatt and Hilton expanding presence

In the space of only three years, Saudi Arabia has been transformed into the biggest Arab market for international tourists.

Religious tourism has traditionally been one of the few ways visitors could enter the kingdom, with 2019 records revealing 9.5 million pilgrims visited the holy cities of Mecca and Medina between the Hajj and Umrah.

Figures released by the United Nations World Tourism Organisation (UNWTO) show that Saudi Arabia attracted more than 18 million inbound visits in the first three quarters of 2022.

The kingdom exceeded the UAE, including the tourism hotspot of Dubai (14.8 million tourists) and Morocco (11 million tourists), which ranked second and third in the region.

Tourism spending in Saudi Arabia also skyrocketed last year, hitting $7.2 billion in the first six months of 2022, according to data from the country’s Ministry of Investment. 

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Saudi Arabia’s growth is part of a Middle East success story with the region registering the strongest relative increase as arrivals climbed to 83 percent of pre-pandemic numbers.

According to UNWTO, more than 900 million tourists travelled globally in 2022 – double the number recorded in 2021 although still only 63 percent of pre-pandemic levels.

In September 2019, Saudi Arabia opened its doors to the world for the first time. The launch of the kingdom’s tourism visa saw visitors from 49 countries around the globe able to explore the country. 

Fast forward to 2023 and Saudi Arabia aims to attract 100 million annual visitors by the end of the decade, supported by the likes of Red Sea Global, the developer behind the world’s most ambitious regenerative tourism destinations, the Red Sea and Amaala. Earlier this week, it awarded an infrastructure and utility contract valued at $270 million. 

Amaala’s first phase of development, focused on the Triple Bay masterplan, will encompass eight hotels and upwards of 1,200 hotel keys. Upon full completion in 2027, the destination will offer 3,000 hotel rooms across 25 hotels as well as high-end retail establishments, fine dining, wellness and recreational facilities.

The tourism transformation has led to a rush of international hotel brands looking to open in the kingdom including Diriyah, the birthplace of Saudi Arabia, which was recently afforded giga-project status by Crown Prince Mohammed bin Salman.

Diriyah Gate Development Authority, responsible for the project, has recently announced the addition of 16 new global hotel brands, taking the total of management agreements to 32, with the first hotel planned to open later this year.

Stuart Deeson, Hyatt Hotels Corporation’s newly appointed vice president of operations for the Middle East and Africa, said Saudi Arabia is on track to becoming a major international tourism destination.

Planned openings in the kingdom over the next few years include Grand Hyatt The Red Sea, Miraval The Red Sea and Park Hyatt Riyadh Diriyah.

“Saudi Arabia is a market that continues to play a pivotal part in Hyatt’s growth strategy in the Middle East. Hyatt anticipates room growth of more than 80 percent in the kingdom by late 2025,” he said.

Hilton Hotels and Resorts is also chasing growth in Saudi Arabia. Kamel Ajami, vice president of operations, Saudi Arabia, Egypt and Levant, Hilton, said: “Saudi Arabia represents a significant opportunity for Hilton to grow its portfolio as we expand our presence to more than 75 hotels in the coming years.”

Hilton has been operating in the kingdom since the debut of Makkah Hilton in 1995. Last year, DoubleTree by Hilton Riyadh Financial District opened, bringing the number of operating properties to 16 under five brands. 

With the world’s largest hotel pipeline, Saudi Arabia is expecting a 67.1 percent increase in room supply over the next three years, according to analysts STR. 

On the back of this rapid growth, Arabian Travel Market, the region’s biggest hospitality show which takes place in Dubai in May, will hold a Saudi Summit which will offer travel professionals and policymakers from across the Middle East and beyond the chance to explore opportunities.

Danielle Curtis, exhibition director ME, said: “From upcoming giga-developments such as Neom and the Red Sea Project to how the kingdom’s latest visa reforms are bolstering its travel sector, we expect Saudi Arabia to represent a major drawcard during the upcoming edition.”

Under the Saudi Arabia Vision 2030 strategy, the tourism sector’s contribution to gross domestic product aims to increase to more than 10 percent, while providing 1.6 million additional job opportunities by 2030.

Figures also show that 1.3 million tourist visas were issued from 2019 to 2022. The kingdom has also advanced 10 positions to 33rd over the past three years on the Travel and Tourism Development Index, which was topped by Japan, followed by the US, Spain, France and Germany.

At the World Tourism and Travel Council Summit last month, Saudi Arabia’s ambition to become one of the top five destinations in the world in the next decade was described as “unparalleled”.

Arnold Donald, chair of the World Tourism and Travel Council, said: “Over the past three years it has been a great privilege to see the progress made here with our own eyes.”

Giga projects valued at over $1.1 trillion are underway in the country. This includes more than 555,000 residential units, more than 275,000 hotel keys, in excess of 4.3 million sq m of retail space and over 6.1 million sq m of new office space expected by 2030, prompting Knight Frank to describe the kingdom as “the largest construction site the world has ever known”.

Saudi Arabia has also recently unveiled a plan for King Salman International Airport, a major transport hub expected to span 57 sq km and boost annual passenger numbers from the current 29 million to 120 million by 2030.