Saudi Arabia hits tourism target seven years early

Eric Lafforgue/Hans Lucas via Reuters Connect

• 100m annual visitors milestone
• New goal of 150m for 2030
• Tourists spent $66bn in 2023

More than 106 million tourists visited Saudi Arabia last year, surpassing the kingdom’s 2030 target and prompting it to set a new goal of welcoming 150 million annual visitors by the end of the decade, according to the Ministry of Tourism.

Achieving the milestone target of the Vision 2030 economic roadmap seven years early cements the kingdom’s status as an “emerging global tourism powerhouse”, the state-run Saudi Press Agency reported.  

The kingdom recorded more than 27 million international tourists in 2023 – up 56 percent since 2019 before the Covid-19 pandemic and a 65 percent increase over 2022, the ministry’s figures show. 

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The number of domestic tourists reached 79 million, also up 56 percent from 2019, and a 12 percent increase from 2022.  

Tourism has proved to be a “significant contributor to the nation’s economy”, the Saudi Press Agency added. International and domestic visitors spent a combined SAR250 billion ($66 billion) over the course of the year.

This represents four percent of overall GDP and seven percent of non-oil GDP, “reflecting the crucial role tourism plays in diversifying Saudi Arabia’s economy”, it reported.  

“Tourism is a key pillar in the nation’s economic transformation under Vision 2030, creating jobs and revenue for the kingdom,” tourism minister Ahmed Al Khateeb was quoted as saying. 

“We are committed to aligning with top-tier international experiences and practices,” he added, “to shape a prosperous future for our tourism industry… and bolster the kingdom’s position on the global tourism map”. 

Saudi Arabia launched its National Tourism Strategy five years ago as part of Vision 2030, setting out targets to attract 100 million visitors each year by 2030, increase tourism’s GDP contribution to 10 percent and create one million jobs. 

The United Nations agency UN Tourism and the World Travel & Tourism Council praised the achievement.

The introduction of tourist visas to Saudi Arabia in 2019 and subsequent regulations in 2022 to improve hospitality service provision and infrastructure were “pivotal”, the World Travel & Tourism Council said.  

CBRE’s Saudi Arabia Real Estate Market Review for the fourth quarter of 2023, published on Tuesday, noted that the kingdom’s hospitality indicators “mostly” outperformed their 2019 baselines over the course of last year. 

Average hotel occupancy rose 3.5 percentage points for the full year 2023 compared with 2019. Revenue per available room rose 18.9 percent, helped by a 12.3 percent uplift in the average daily rate (ADR). 

Riyadh was the best-performing Saudi tourist market in 2023. Average occupancy rates were up 3.1 percentage points in the year to December and ADR was up 17.5 percent, resulting in a 23.5 percent annual increase in revenue per available room. 

Jeddah, Makkah and Madinah all recorded positive indicators in 2023, and Khobar and Damman were the only markets in which ADR declined, by five percent year-on-year and 1.6 percent respectively, CBRE said. 

US-based hotel operator Hilton said it aims to quadruple its presence in the kingdom to 100 hotels by 2030, with two-thirds of its pipeline already under construction. 

Some of Saudi Arabia’s most important tourism mega-projects lie along the Red Sea coast, close to the politically turbulent shipping strait. 

The main one is The Red Sea Project, which forms part of the Vision 2030 agenda for boosting tourism, and is planned as a major mixed-use destination featuring 50 hotels, 8,000 rooms, 1,000 residential properties and its own international airport by 2030. 

A spokesperson for the developer, Red Sea Global, told AGBI the company remains “confident” in its ability to ensure the safety of its holiday destinations.

“The Middle East is a huge geographical area,” the spokesperson said. “Visitors to our destinations and the kingdom of Saudi Arabia can rest assured that this is a safe and welcoming place, far away from the current conflict.”