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Saudi Arabia’s hospitality industry is entering a dynamic new phase of expansion, with around 94,500 hotel rooms currently under construction or in the final stages of planning. This growth builds on an existing base of 171,650 rooms, reflecting the rapid transformation underway across the Kingdom’s travel and tourism landscape.
The latest Saudi Report by global property consultancy Knight Frank highlights how the sector’s evolution mirrors the country’s wider economic diversification, with 2024 marking a particularly strong year as travel and tourism grew by 32 percent.
Robust performance and record spending
According to Oussama El Kadiri, Partner and Head of Hospitality, Tourism & Leisure Advisory for MENA at Knight Frank, the market’s momentum is being fueled by a mix of government-led reforms, private sector investment, and changing consumer behaviors.
In 2024, the tourism sector contributed SAR444.3 billion to the Saudi economy, accounting for 11.5 percent of GDP, the highest proportion in the region. Early 2025 figures continue that trend, with international visitor spending rising 9.7 percent year-on-year to SAR49.4 billion, and total tourism expenditure reaching SAR284 billion, up 11 percent.
Saudi Arabia welcomed 29.7 million international visitors in 2024—an 8 percent increase—alongside 86.2 million domestic trips, up 5 percent from the year before. International travelers accounted for SAR169 billion of total spending, a 19 percent jump compared to 2023.
“Saudi Arabia’s tourism scene is evolving fast, powered by higher-value travelers and world-class hospitality projects being delivered under Vision 2030,” said Faisal Durrani, Partner and Head of Research, MENA at Knight Frank. “The government has now raised its 2030 target from 100 million to 150 million annual visitors, with religious tourism expected to make up about one-third of that figure.”
Religious and leisure travel on the rise
Religious tourism remains the backbone of the market. In 2024, the Kingdom hosted 1.8 million Hajj pilgrims and 35.7 million Umrah pilgrims, including 16.9 million international visitors—a 25 percent increase and the highest number ever recorded.
At the same time, leisure travel is expanding rapidly. Non-religious international travelers now account for 59 percent of arrivals, up from 44 percent in 2019. Spending on holiday and leisure trips alone reached SAR36.4 billion in 2024.
Asia continues to lead as the top source region with 9.7 million visitors, followed by Egypt (3.2 million), Pakistan (2.8 million), and Bahrain (2.6 million).
Expanding hotel supply
Between January and August 2025, the average daily hotel rate nudged up to SAR746 ($199), while occupancy levels rose to 61 percent, pushing revenue per available room up by 1.3 percent. By September 2025, Saudi Arabia’s total quality hotel inventory reached 171,650 rooms, with an additional 18 percent increase expected by 2027.
Nationwide, about 358,000 new hotel rooms are in the pipeline. Four major “mega-projects” are leading this expansion, particularly in the holy cities and key urban centers:
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Rua Al Haram – over 70,000 keys
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Rua Al Madinah – around 47,000 keys
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Knowledge Economic City – about 42,000 keys
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Masar Makkah – roughly 41,000 keys
Domestic travel trends
Domestic tourism remains the largest segment, with Saudi citizens making up 74.3 percent of visitors in 2024. Roughly one in three Saudis travels within the Kingdom every two to three months, a number that rises to half among those earning more than SAR80,000 monthly.
Staycations are now a major trend:
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36 percent favor long weekend trips (4–6 days)
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20 percent take full-week stays
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67 percent of high earners prefer 7–10-day getaways
Since 2019, around 250,000 Saudis have relocated to Riyadh, largely due to the city’s strong job market—it has accounted for two-thirds of new employment opportunities since then.
Favorite domestic destinations include:
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Makkah – the most visited city (42%)
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Riyadh – most popular among high earners (61%), tied with Jeddah (40%) as key business and cultural centers
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Dammam Metropolitan Area – 16 percent
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Abha (24%), Taif (22%), and Al-Ula (20%) – appreciated for their cooler climate and heritage attractions
Rising demand for high-end hospitality
Currently, around 60 percent of Saudi Arabia’s hotel rooms fall under luxury, upper-upscale, or upscale categories—a share expected to rise to 76 percent by 2030. This shift reflects growing consumer preferences, with 83 percent of travelers favoring four- or five-star stays.
Serviced apartments have also gained popularity, representing 22 percent of total stays, while resorts have grown to 11 percent, helped by ongoing Red Sea projects that will add about 8,000 rooms by 2030.
El Kadiri summed up the trend, saying:
“Saudi Arabia’s tourism and leisure industry is on the verge of historic change. By merging pilgrimage, heritage, and modern leisure experiences, the Kingdom is building a tourism identity where luxury meets authenticity—and ambition meets results.”
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