Saudi Arabia is set to embark on a massive expansion of its hospitality industry, with the goal of developing 315,000 new hotel rooms by 2030. This ambitious growth plan will see the Kingdom’s hotel room inventory surpass Dubai’s current 140,000 keys, making it one of the largest tourism markets in the world. The development of the hospitality sector is a crucial element of the Kingdom’s plans for economic diversification.
Global property consultancy Knight Frank predicts that the planned expansion of hotel rooms in Saudi Arabia will bring the country’s total to almost 450,000 by 2030. This figure is nearly 58% higher than the combined total of hotel rooms in the UAE, which currently stands at around 200,000.
Faisal Durrani, Partner – Head of Middle East Research at Knight Frank, explains that a significant factor in the success of the Kingdom’s tourism and hospitality market will be its domestic tourism sector. Currently, 65% of Saudis travel within the Kingdom between one and three times per month. However, 58% of Saudis surveyed in Knight Frank’s 2023 Saudi Report opt not to stay in hotels. Durrani points to the need for diversity in accommodation options, which could include youth hostels and luxury glamping sites, to cater to the younger generation and the country’s large families traveling together.
The planned expansion of the hospitality sector is expected to play a crucial role in boosting domestic tourism in Saudi Arabia, which is already a thriving industry. Knight Frank forecasts that domestic tourism will form a vital part of the future of the Kingdom’s hospitality landscape. This growth will be supported by new airports and national airlines, which are currently under development.
The total development cost for all the hotel rooms planned in Saudi Arabia is estimated at $37.8 billion. Giga projects like NEOM are leading the supply pipeline, and combined with the legislative framework that eases access to the sector for international investors, Saudi Arabia is on track to becoming one of the world’s major tourist markets.
As Turab Saleem, Head of Hospitality, KSA, explains, “Catering to the diverse accommodation needs of domestic tourists, including the younger generation, will be the key to achieving this goal.” Furthermore, Saleem emphasizes the importance of supporting hospitality infrastructure, such as new airports and national airlines, which will be critical in achieving this ambitious growth plan.
The rapid expansion of the hospitality sector across Saudi Arabia is set to transform the country’s tourism landscape and drive economic growth. With the right investment and support, Saudi Arabia is well-positioned to become one of the most dynamic and exciting destinations in the world.