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The Tourism Sector in Saudi Arabia

An Industry Where Timeless Traditions Meet Futuristic Visions

Saudi's economic tool for diversification

Saudi Arabia, traditionally known for its rich history and religious significance, is now drawing the world’s attention with its innovative, luxurious, and restorative tourism destinations. With the government's unwavering support and strategic investments through the Saudi Tourism Investment Company (Asfar), the nation is revealing its hidden gems to visitors from the world at large. From the ancient ruins of AlUla to the bustling streets of Riyadh, Saudi Arabia’s diverse and vibrant landscape represents an untapped opportunity for tourism companies eyeing expansion to the Saudi market.

Saudi Tourism Sector Key Statistics

94.5 million

Tourists visited Saudi Arabia in 2022, including both domestic and international visitors

$54 Billion

Total tourism expenditure for 2022, highlighting the sector's economic significance.

16.6 Million

International tourists, marking a near-complete recovery from pre-Covid-19 levels.

77.8 Million

Domestic tourists in 2022, setting a new record over the past five years.

Source: The National News

Saudi Top Tourism Projects for 2024

Growth of the Tourism Sector

The first quarter of 2023 alone saw the Kingdom host about 7.8 million tourists, marking a 64% increase compared to the same period in 2019, so pre-pandemic. This surge in tourism resulted in a revenue of $9.9 billion during that period, which is three times more than in previous years.

The unparalleled growth in the sector indicates that Saudi Arabia will become the next leader in tourism in the Middle East.

The Kingdom's strategic decision to release tourist visas in 2019 and to recognize existing US, UK, and Schengen Area visas in 2020 has significantly broadened its appeal to international travelers. In addition, the devotion to building an innovative leisure hospitality landscape through giga-projects like Amaala dubbed the "Middle East Riviera," will certainly bring in even more tourists in the upcoming years.

The Amaala project alone is expected to contribute to the tourism sector through 2,500 new luxury hotel rooms and 22,000 new job openings by 2028.

The world’s largest living museum, AlUla is another standout heritage destination in Saudi, that is on the forefront of driving tourism in the Kingdom. One of the forces of tourism in AlUla is also its SMEs – in 2022, AstroLabs, a leading business expansion partner in the Gulf, collaborated with Vibes AlUla for the Vibes AlUla SME Program to transform emerging SMEs into economic powerhouses. The program enabled 42 SMEs across different sectors including, Food & Beverage, Agriculture, Tourism, Entertainment, Hospitality, Media, and Communications & Advertising. Spanning across 3 cohorts the SMEs, established more than 200 strategic and business partnerships, and developed and enhanced over 130 products to attract a global audience and spread the AlUla brand by entering and exporting to new markets in the region and across the world.

Other monumental projects, such as the $500 billion investment in the futuristic city of Neom and the Red Sea Project that encompasses 90 islands, will further transform the tourism landscape and position Saudi Arabia as the go-to destination for luxury, leisure, and adventure.

Ahmed Al-Khateeb, speaking at the France-Saudi Investment Forum, emphasized the sector's potential, projecting a growth of 130% by 2032. These projections are aligned with Saudi Arabia’s goal to increase the sector’s contribution to the country’s GDP from the current 3-4% to 10% by 2030.

Future Outlook

Saudi Arabia's Vision 2030 aims to shape the nation's future, placing significant emphasis on the growth of tourism, the events industry, and entertainment. The contribution of these sectors to the economy and their growth is expected to continue upon an upward trajectory thanks to tireless governmental support and an exciting, thriving business ecosystem.

By 2030, the Kingdom aims to attract 100 million visitors for both leisure and religious tourism. Vision 2030 has set ambitious targets in this sector, including doubling the number of religious visas for the Umrah, which would indirectly spur tourism across the country – including an anticipated surge in demand for accommodation and services in transit cities like Jeddah.

Sources: Hospitality Insights, Arab News, The National News, Statista, and OECD Tourism Trends and Policies 2022.

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Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF), founded the Saudi Tourism Investment Company (Asfar), whose sole purpose is to boost tourism by supporting local and international businesses in the private sector. In a bid to witness the sector grow from contributing 3% to national income to contributing 10%, the government has focused on building strategic partnerships worth billions of dollars. In fact, earlier this year, Saudi Arabia signed a multimillion-dollar deal with Habitas to build a luxury camping site at the annual Burning Man festival in the US desert.

While the pandemic did affect inbound tourism, the numbers in 2022 showed a remarkable recovery, achieving 95% of the pre-Covid-19 figures from 2019.

Beyond its historical and religious sites, Saudi Arabia is investing in entertainment hubs, luxury resorts, sports, and cultural events and venues. The aim is to cater to a diverse range of tourists, from history buffs to adventure seekers.

The Ministry of Tourism (MT) is the entity responsible for issuing tourism sector-related licenses (i.e. hotels, furnished apartments, organizing tourist trips, etc.)

1. Obtaining MISA license

2. Obtaining commercial registry

3. Obtaining tourist license

4. Site license

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