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:

• Rua Al Haram – over 70,000 keys

• Rua Al Madinah – around 47,000 keys

• Knowledge Economic City – about 42,000 keys

• 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:

• 36 percent favor long weekend trips (4–6 days)

• 20 percent take full-week stays

• 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:

• Makkah – the most visited city (42%)

• Riyadh – most popular among high earners (61%), tied with Jeddah (40%) as key business and cultural centers

• Dammam Metropolitan Area – 16 percent

• 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.”

Saudi Arabia’s aviation industry is moving into a new growth cycle as airlines expand their fleets and strengthen regional and international connectivity, supported largely by new narrowbody aircraft orders.

This rapid expansion is expected to significantly increase the need for trained pilots across the region. Industry projections from the Boeing Pilot and Technician Outlook estimate that the Middle East will require more than 58,000 new pilots over the next 20 years as carriers scale up operations and route networks.

Saudi Arabia is expected to account for a large portion of that demand, reflecting its ongoing investment in aviation development and airline capacity growth.

The pressure is not limited to the region. Global forecasts show similar trends across key markets. CAE’s Aviation Talent Forecast suggests North America could need over 130,000 pilots by 2032, while the Asia-Pacific region may face a shortfall of more than 250,000 pilots.

Aviation experts say this simultaneous expansion is placing significant strain on global training systems and simulator capacity.

Martynas Mazeika, Chief Growth Officer at BAA Training, part of Avia Solutions Group, said the pace of airline expansion is reshaping training requirements. He noted that as new aircraft enter service each year, demand for qualified pilots is rising in parallel, requiring airlines to rely on scalable training partnerships and international resources.

He added that access to simulator capacity and flexible training programs is becoming increasingly important for airlines managing long-term fleet growth.

Based on Boeing’s estimates and standard requirements of around 200 flight hours per pilot, training more than 58,000 pilots in the Middle East would require roughly 11.6 million flight training hours.

By comparison, a typical flight academy operating around ten training aircraft generates only about 12,000 to 15,000 hours annually, underscoring the scale of capacity expansion needed to meet demand.

Simulator training presents a similar challenge. Preparing pilots would require approximately 1.1 million hours on full flight simulators. With each simulator typically delivering 5,000 to 6,000 training hours per year, industry capacity will need to expand significantly.

Mazeika said fleet expansion is not limited to the Middle East, pointing out that airlines in North America, India, and Southeast Asia are also increasing aircraft orders. He stressed that access to global training infrastructure is becoming a key factor in supporting airline growth strategies.

As Saudi carriers continue to grow their narrowbody fleets, demand is expected to rise for type rating and recurrent training, which prepare pilots for new aircraft and maintain operational standards as networks expand.

BAA Training currently provides type rating, recurrent training, and simulator-based programs through its global network of training centres and partners.

With aviation expansion accelerating across Saudi Arabia and the wider Middle East, industry stakeholders say that scalable training systems and international cooperation will be essential to keep pilot supply aligned with fleet growth.

Source: ZAWYA

The Ministry of Hajj and Umrah has reiterated that international pilgrims must obtain a Hajj visa specifically issued for the pilgrimage. Officials stressed that entry for Hajj will not be allowed under any other visa category, including visit, transit, Umrah, or tourist visas.

For citizens and residents inside the Kingdom, Hajj arrangements are processed through the Nusuk, following completion of the official reservation procedures.

The ministry further stated that all bookings must be made strictly through approved and authorized platforms. It cautioned pilgrims against engaging with unofficial agents or unverified channels when arranging Hajj participation.

Source: Saudi Gazette

The Ministry of Tourism (Saudi Arabia) has announced a new regulatory framework detailing violations and penalties for hospitality providers operating in the holy cities of Makkah and Madinah during the Hajj season. The measures are designed to strengthen service quality for pilgrims and ensure consistent compliance across the sector.

According to the ministry, the Hajj season officially extends each year from the first day of Dhul Qadah until mid-Muharram. Under the updated rules, penalties will escalate for repeated violations, whether they occur before, during, or after the pilgrimage period.

If an offense committed during Hajj is a repeat of a previous violation, authorities will impose either the minimum fine (if it is higher than the earlier penalty) or double the previous amount if it is lower. Within the same season, any repeated breach will automatically result in doubled fines. Violations repeated after the season, but linked to Hajj-related offenses, will also face progressively higher penalties depending on frequency.

The regulations further state that repeated non-financial violations may lead to temporary suspension or closure of facilities during the Hajj period. A third recurrence could result in full license revocation. Authorities have emphasized a phased enforcement approach, allowing fines to be increased for repeat offenses while remaining within the maximum legal limit.

Hospitality establishments have been divided into five classifications, ranging from luxury five-star hotels to unclassified and temporary accommodations used specifically for pilgrims. Penalties are also adjusted according to business size, with micro enterprises fined at 25% of the base rate, small businesses at 50%, medium enterprises at 75%, and large establishments at 100%.

Financial penalties in Makkah and Madinah range between SAR 2,000 and SAR 14,000, alongside additional measures such as temporary closure or permanent license cancellation for repeated violations. For temporary Hajj accommodation providers, fines are significantly broader, ranging from SAR 1,000 to SAR 50,000, with enforcement actions including suspension until compliance is achieved or full revocation of operating licenses.

Source: Saudi Gazette

Saudi Railways (SAR) has expanded its freight operations with the introduction of five new logistics routes, further developing an integrated national transport network designed to enhance cargo efficiency across the Kingdom and beyond.

The new corridors link Arabian Gulf ports with Saudi Arabia’s central and northern regions, while also extending connectivity toward Red Sea ports and neighbouring countries to the north. By combining rail and road transport, the system is intended to improve supply chain performance and ensure smoother movement of goods across key domestic and international trade routes.

Operations are coordinated through a unified logistics framework that includes the Riyadh Dry Port, along with SAR freight facilities in Dammam, Jubail, Ras Al Khair, Al Kharj, Hail, and Qurayyat. These hubs are connected to major ports on both the Arabian Gulf and Red Sea coasts, strengthening links between industrial zones, economic centres, and global shipping networks.

The routes are designed to handle a wide variety of cargo, supporting national supply chains and key industries such as petrochemicals and mining. They are also expected to facilitate more efficient import and export flows, while improving transit options for regional markets.

According to Dr. Bashar Al-Malik, Chief Executive Officer of Saudi Railways (SAR), the initiative offers a comprehensive logistics solution aimed at improving supply chain reliability and efficiency under varying operational conditions. He highlighted that the system relies on multimodal integration and close coordination with relevant authorities to ensure seamless freight movement.

He further noted that the expanded network strengthens Saudi Arabia’s links with regional and global markets, reinforcing its strategic role as a trade corridor between East and West. This, he added, supports the Kingdom’s ambition to develop into a leading global logistics hub and a key participant in international trade flows.

The new routes are expected to serve a broad customer base, including major industrial firms, mining companies, and international shipping operators. By offering integrated transport services, the system aims to reduce delivery times and improve overall operational efficiency.

In addition, the initiative is projected to remove thousands of heavy trucks from highways, contributing to improved road safety, lower carbon emissions, and faster freight movement, further solidifying SAR’s role in Saudi Arabia’s evolving transport and logistics ecosystem.

Source: Saudi Gazette

Saudi Arabia recorded its highest-ever annual international tourism spending in 2025, with overseas visitors contributing SR159.9 billion to the economy. The figure marks a 4.1 percent increase from SR153.6 billion reported in 2024, reflecting steady growth in the Kingdom’s tourism sector.

The surge in visitor expenditure was mirrored in the country’s balance of payments, where the travel account posted a surplus of around SR49.4 billion for the year. This outcome highlights tourism’s expanding role in strengthening national economic performance and improving key financial indicators.

The upward trend builds on strong momentum from 2024, when international visitor spending reached SR153.6 billion. Continued investment in tourism infrastructure, destination development, and service enhancements has supported this growth, positioning the sector as a central pillar of Saudi Arabia’s economic diversification efforts.

Source: Saudi Gazette