Saudi Arabia offers unique opportunities to invest in hotels and leisure assets. As the fastest growing destination in the world, the country features a varied and growing number of attractions, as well as providing substantial governmental support for the tourism sector. In addition, the Kingdom boasts a great variety of microclimates and topographies, especially compared to other GCC (Gulf Cooperation Council) countries like UAE and Qatar. Indeed, the country had the greatest number of hotel projects in the active pipeline (318 with 75,761 rooms) in the Middle East at the end of Q1 2024, according to Lodging Econometrics. Furthermore, the country’s Vision 2030 plan, a transformative initiative, has inspired other national strategies such as the National Tourism Strategy (NTS). This comprehensive plan sets ambitious goals to achieve economic diversification. In alignment with Vision 2030, the tourism sector aims to open 320,000 new hotel rooms by 2030, catering to all market segments, including both luxury and budget options.
Fastest growing in the world
Saudi Arabia recorded over 100mn (109.3mn) tourist arrivals in 2023, thus surpassing a target, originally set for 2030, seven years ahead of schedule. The 2023 figure represents an increase of 56% compared to 2019, and a more than 16% increase over 2022. Notably, international visitors surged by 65% over the 2022 figure to reach 27.4mn. Encouraged by this success, the Kingdom has set a new target of attracting 150 million tourists by 2030.
While Saudi Arabia is currently 14th-ranked for incoming arrivals, it is set to have by far the greatest growth worldwide in 2024, according to Tourism Economics, who predicts that tourists from abroad will be almost 80% above the 2019 level.
Saudi's new eVisa for 66 countries
This surge in the country's incoming tourism is being facilitated by Saudi Arabia’s new online visa portal, that allows international visitors from 66 eligible countries to apply for an eVisa, which is a one-year, multiple entry visa, allowing tourists to spend up to 90 days in the country. The eVisa enables tourists to take part in tourism-related activities such as events, family and relatives visits, leisure, and Umrah, but excludes the Ḥajj (which has specific dates according to the Islamic lunar calendar), as well as other activities, such as study. The visa process is easier, allowing more people to come into the Kingdom, including citizens of 66 countries, holders of US, UK, and Schengen visas, and residents of the GCC countries, even if their nationalities are not among the 66 eligible countries. All the major outbound markets in the world (e.g., US, Germany, UK, Japan, Australia, and China) are eligible.
TIEP facilitates investment
Launched in early March 2024, TIEP (Tourism Investment Enablers Program) aims to make it easier and more cost-effective for international and local investors to do business in Saudi Arabia. Specifically, Hospitality Investment Enablers, part of the wider TIEP, should stimulate private investment in key tourism sites across the Kingdom by up to SAR 42bn ($11bn). Key enablers include facilitating access to government-owned land on favourable terms, streamlining project development processes, and reducing barriers to market entry. Multiple regulatory adjustments are part of the effort to lower operational costs and encourage industry growth. Saudi Arabia expects the initiative to create 42,000 new hotel rooms and some 120,000 jobs.
The country is also enhancing its infrastructure with new airports and is amending laws and regulations to attract international investors. In addition, Saudi Arabia has been courting around 7,000 firms globally by offering incentives like tax breaks and support for staff relocation to establish their regional bases in Riyadh.
New cities and attractions
A series of mega projects is dramatically transforming the nation's cityscapes, which include AI-driven, futuristic cities, large cultural complexes, luxurious resorts nestled within ancient archaeological sites, etc. NEOM and The Line are prominent mega-projects. Additionally, the Kingdom boasts geographic diversity, natural beauty assets, climatic variety, and hosts major global events in sports, business, arts, and entertainment. Strategically located, the Kingdom offers excellent air accessibility, with a significant percentage of the global population being less than six hours away by air.
The Line
As part of NEOM, The Line will be a vertical city in the northwest Tabuk province. The city encased in a mirrored exterior, running from the Red Sea to the desert, will be car-free, prioritizing pedestrian access and environmental sustainability and will be powered by clean energy.
Trojena
Also part of NEOM and located in the Tabuk Province, Trojena, will become the Arabian Gulf's first outdoor ski resort. The eco-friendly development spans 60 sq km and is located 50km from the Gulf of Aqaba (Red Sea).
Trojena will offer varied residential options like chalets, villas and high-end hotels across 6 themed districts. Located at 1,600m, the resort will host the 2029 Asian Winter Games.
Oxagon
By 2030, NEOM's Oxagon will become the largest floating structure in the world, covering 48 sq km in the Red Sea near the Suez Canal. It will serve as a centre for innovation, trade, and eco-friendly technology. Oxagon will host factories, development facilities, as well as a physical and digital logistics hub, all powered by clean energy, and will provide waterfront living for 90,000 people.
Sindalah
Extending over an area of some 84 hectares, Sindalah is one of a chain of islands that will be developed in NEOM. In the form of a sea horse, the resort destination will showcase the future of luxury travel and yachting. The opening is scheduled for 2024.