Saudi Arabia is looking to leave its mark on the world tourism stage by setting in motion its plan of reaching 100 million visitors by 2030. This signifies the tourism industry’s role as one of the main factors in diversifying an economy historically dependent on the export of oil.
With the machinery firmly put in place, Saudi Arabia is now experiencing a boost in investment levels with hotels and the tourism industry, in general, benefitting from exponential growth. We take a closer look at how the Saudi government sets out to develop its hospitality industry under the transformative Saudi Vision 2030 framework.
Saudi Arabia’s impressive hotel portfolio
In accordance with the Saudi Vision 2030, Saudi Arabia has set out to deliver 310,000 completed hotel rooms by 2030 or earlier. In line with developing its hospitality market for domestic and international tourism, Saudi Arabia currently has an impressive hotel construction pipeline worth more than USD 110 billion.
Hospitality analytics firm, STR, stated that Saudi Arabia’s transformative Vision 2030 has propelled the Kingdom into one of the world’s fastest-growing countries for hotel development largely thanks to the giga-projects nearing their first phases of completion. With new giga-projects being announced, the Kingdom is now the world leader in hotel supply growth.
Additionally, data released by global property consultancy Knight Frank, shows that Saudi Arabia’s future hotel portfolio will mostly be centered around these ambitious giga-projects, including the Red Sea Project, Neom, and the Al-Ula project. It’s estimated that the bulk of the hotel supply pipeline, around 73%, will be anchored to these giga-projects according to Knight Frank’s report.
Giga-project developments underway
Spurred by the development of ambitious tourism giga-projects, the Saudi government has rendered investing in the Kingdom a highly attractive proposition. Specifically, a list of brand hotels will be concentrated around these high-profile tourism projects.
Case in point, the colossal Red Sea Project is a massive luxury and sustainable tourism undertaking easily the size of Belgium. The project encompasses a vast nature reserve consisting of some 90 pristine islands, dormant volcanoes, heritage sites, as well as coral reef dive areas.
Slated to be completed in 2030, the Red Sea Project will allow visitors to choose from a collection of 50 hotels and approximately 1,000 residential properties. In total, around 8,000 new hotel rooms will be available and the list of confirmed hotels includes Grand Hyatt The Red Sea, InterContinental Resort Red Sea, Raffles Red Sea, Fairmont Red Sea, and many others.
The Diriyah Gate project will highlight the historic city of Diriyah as a gateway to explore Saudi Arabia’s 300+ years of authentic culture and history. The project plans on delivering world-class residential living and outstanding lifestyle offerings. So far, 16 international hotel brands have been confirmed at the Diriyah Gate Development in Riyadh including Armani Hotel Diriyah, Four Seasons Hotel Diriyah, and The Ritz-Carlton, Diriyah, Riyadh among numerous others. The Diriyah Gate project will feature a total of 38 hotels upon completion.
Elsewhere, the Royal Commission for the Al-Ula project has confirmed that it will deliver close to 10,000 new hotel rooms by the year 2030. The USD 15 billion giga-project will offer hotel brands the likes of Habitas, Banyan Tree, and Aman.
Tourism set to provide growth and opportunities
With the objective of attracting 100 million tourists in 2030, including 55 million international visitors and 45 million domestic visitors, the Saudi government has taken steps and laid out plans to significantly boost the demand for tourism in the coming years.
Saudi Arabia’s tourism industry is a major growth area and is expected to contribute 10% to the Kingdom’s GDP by 2030. Specifically, it is forecasted that the Red Sea Project alone will contribute USD 5.8 billion to the GDP upon completion in 2030. Additionally, it will create around 70,000 employment opportunities either directly, indirectly or induced, which means that the Saudi tourism industry will provide opportunities to tourists, local businesses as well as Saudi’s younger generation.
