320,000 new hotel rooms expected in...

Data analysed by Knight Frank suggests more than 70% of properties will be luxury and upscale

Saudi Arabia is gearing up for a major expansion in its hospitality sector by adding 320,000 hotel rooms to its hospitality offering to cater to the projected surge in tourism, with 150 million domestic and international tourists expected by 2030.

According to property consultancy Knight Frank, 66% of existing hotel supply in the kingdom falls into the luxury, upper upscale and upscale category. However, by 2030, this segment of the market will expand further to 72% of the market, equating to 251,500 hotel rooms.

By the end of 2023, Saudi Arabia welcomed almost 100 million domestic and international tourists, with the tourism and hospitality sector contributing to nearly 6% of the kingdom’s GDP. This puts the sector well on track to achieving the government’s 10% target by the end of the decade.

According to the Saudi Ministry of Tourism, tourism spending in the first half of 2023 rose to SAR87 billion, marking a 132% increase compared to 2022. At the same time, international visitor numbers soared by 142%, totalling 14.6 million arrivals, reflecting the sector's strongest performance in a half-year period.

Knight Frank partner and head of Hospitality, Tourism & Leisure Advisory, MENA Turab Saleem said: "With a target of welcoming 150 million visitors by 2030, a 50% increase from its previous goal, the government is actively exploring various strategies to attract international travellers. This includes the development of cultural and entertainment offerings nationwide, which complement existing attractions like the Jeddah F1 Grand Prix and numerous 'Entertainment Seasons'."

Noteworthy additions to the country's attractions will include Boulevard World theme park in Riyadh, alongside the licensing of 24 additional theme parks by the Saudi General Entertainment Authority over the past year.

Riyadh winning the bid to host the 2030 World Expo is expected to inject a substantial economic boost of US$94.6 billion into the nation's capital, with an estimated 40 million visitors expected during the six-month exhibition.

With 30 million religious tourists expected to visit the Holy Cities by 2025 and the government projects that this figure will rise to 50 million visitors by 2030. Knight Frank’s analysis of hotel supply in the Holy Cities of Mecca (Makkah) and Medina (Madinah) reveals a significant figure of 221,000 hotel rooms announced, planned or under construction, with 40,000 in Masar Makkah and a further 39,000 in Thaker Makkah.

Although the numbers are speculative, it suggests the scale of development in the Holy Cities will account for about 25% of the total expected nationwide by 2030.

For more information, visit www.knightfrank.com.sa

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