Saudi Arabia to Add 320,000 Hotel Rooms by 2030 to Accommodate Surging Tourism

Saudi Arabia plans to add 320,000 new hotel rooms by 2030 to meet surging tourism demand, with the hospitality sector contributing 6% to the Kingdom's GDP. This massive expansion reflects Saudi's ambition to become a global tourism hub.

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Hadeel Hashem
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Saudi Arabia to Add 320,000 Hotel Rooms by 2030 to Accommodate Surging Tourism

Saudi Arabia to Add 320,000 Hotel Rooms by 2030 to Accommodate Surging Tourism

Saudi Arabia plans to add 320,000 new hotel rooms by 2030 to host an expected 150 million domestic and international tourists annually, according to a report by property consultancy Knight Frank. The expansion aims to cater to the anticipated surge in tourism, with the government actively exploring strategies to attract more international travelers.

Currently, 66% of the existing hotel supply in the Kingdom falls into the luxury, upper upscale, and upscale categories. This segment is projected to expand further to 72% of the market by 2030, equating to 251,500 hotel rooms "of the planned hotel room supply in the 'upscale' or 'luxury' categories requiring 1-2 staff per room," the report states.

The tourism and hospitality sector in Saudi Arabia is already contributing nearly 6% of the Kingdom's GDP, with tourism spending in the first half of 2023 rising by 132% to SAR 87 billion. International visitor numbers also soared by 142% to 14.6 million arrivals, driven by a significant influx of visitors from Muslim-majority countries.

Why this matters: The massive expansion of Saudi Arabia's hospitality sector reflects the country's ambitious goals to diversify its economy and become a global tourism hub. The development of cultural and entertainment offerings nationwide, along with the hosting of major events like the 2030 World Expo in Riyadh, is projected to attract millions of visitors and inject billions into the economy.

The rapid growth in the hospitality sector is projected to require a significant number of key workers, estimated between 232,000 and 387,000. "The provision of key worker accommodation for the hospitality sector will be essential to ensure its future success," the report emphasizes.

The Holy Cities of Makkah and Madinah are also projected to see significant hotel development, with 221,000 hotel rooms announced, planned, or under construction, accounting for about 24.7% of the total projected nationwide by 2030. The government projects an increase in religious tourist numbers from 30 million to 50 million by 2030.

The scale of the hospitality expansion is estimated to require around $104 billion in construction costs, with $70 billion needed for the Holy Cities alone. Marriott International is projected to become the largest hotel operator in the country by 2030, with around 26,200 hotel keys under management, surpassing Accor Hotel Group.

Key Takeaways

  • Saudi Arabia plans to add 320,000 new hotel rooms by 2030 to host 150M tourists annually.
  • 72% of the hotel supply will be in the luxury, upper upscale, and upscale categories by 2030.
  • The tourism sector contributes 6% of Saudi Arabia's GDP, with 142% growth in international visitors.
  • The hospitality expansion will require 232,000-387,000 workers and $104B in construction costs.
  • Marriott International is projected to become the largest hotel operator in Saudi Arabia by 2030.