TOURISM

SAUDI SURPASSES VISITOR TARGET AHEAD OF SCHEDULE

Saudi attracted more than 109 million tourists in 2023, including more than 20.9 million visitors from Asia and 27 million from other parts of the world, generating a total of USD 25.7 billion in spending. This puts the kingdom way ahead of its goal of welcoming 100 million tourists by 2030, according to the Ministry of Tourism. 

The country is building on those achievements. Non-religious tourism has surged, with increased leisure travel and visits to friends and relatives to be driven further by major international events such as the Saudi Arabian Grand Prix (F1), the 2027 AFC Asian Cup, and the Riyadh 2030 World Expo.

DRIVER OF ECONOMIC GROWTH

The World Travel & Tourism Council (WTTC) estimates Saudi tourism sector’s overall (direct and indirect) contribution to GDP to have reached 11.5% in 2023. By 2034, this share of the GDP is anticipated to expand to 16%.

“Tourism becomes the main driver of the service balance in the external sector,” according to the International Monetary Fund (IMF). “Annual net travel service shifted into a surplus in 2022 and further increased by 38% to USD 12.8 billion in 2023, compared with large historical deficits – particularly during 2010-2015.

In its latest country report on Saudi Arabia in September, the IMF noted that tourism revenue registered a record high of USD 36 billion in 2023, on the back of a substantial increase in outbound tourism spending post-COVID-19, which was primarily driven by expatriates’ trips to visit friends and relatives, while Saudi nationals’ leisure spending abroad experienced a significant decline of 51% from 2019 to 2023.

“In addition, tourism has contributed to higher transportation, as inbound visitors’ spending on airline tickets are categorised under transportation. Service exports are expected to maintain an upward trend if tourist inflows continue to grow,” the IMF noted. 

Continued policy measures are expected to sustain this growth and help achieve the goal of 10% direct GDP contribution by 2030. Other successful key initiatives identified by the IMF include regulatory support, such as the introduction of an E-visa programme, has made it easier for tourists to obtain visas online or on arrival.

Infrastructure developments, in the form of giga-projects, are creating new tourist destinations, while upgrades to road, rail, and air transport, including a new international airport, has enhanced accessibility.

Finally, international campaigns, partnerships with global travel platforms, and participation in major tourism fairs have raised Saudi Arabia’s profile. The kingdom is also hosting numerous cultural, entertainment, and sports events, such as Riyadh Seasons, Boulevard World, and the upcoming Asian Games and Asian Cup, along with key conferences.

These measures are pivotal in driving continued growth and supporting Saudi Arabia's tourism ambitions.

INVESTMENT ENABLERS

To accelerate the industry’s growth, authorities have introduced the Tourism Investment Enablers Program, designed to streamline business activities in the Saudi tourism sector. One key component, the Hospitality Investment Enablers initiative, offers numerous opportunities for investors to expand hospitality facilities across the kingdom. 

The initiative aims to significantly boost accommodation capacity in key tourism hubs, drive private investments up to USD 11 billion, and contribute USD 4.3 billion annually to GDP by 2030. Additionally, it is expected to create 120,000 new jobs, supporting the country’s broader economic diversification goals.

Investors are offered incentives such as corporate tax exemptions, value added tax (VAT) reductions, and access to government-owned land under favourable terms, making entry into the Saudi market more attractive and cost-effective.

The Ministry of Tourism has encouraged investors to capitalise on the significant developments in the tourism sector, emphasising Saudi Arabia’s strong infrastructure, strategic location, and commitment to sustainable growth.

TOURISM RANKINGS

Saudi Arabia's international tourism performance in 2023 was remarkable, ranking 14th globally in international arrivals, an 11-place jump since 2019. The kingdom also ranked 12th in international tourism receipts, rising 15 places compared to 2019. According to a recent UN Tourism Barometer, Saudi Arabia ranked first among large tourism destinations in terms of growth in international arrivals and tourism receipts compared to pre-pandemic levels.

The growth has continued in 2024, with the kingdom welcoming 17.5 million international visitors between January and July 2024, a 10% increase over the same period in 2023 and a 73% increase compared to the 2019 figures, according to the Ministry of Tourism. 

“Most striking is the 656% increase in the number of tourists arriving specifically for entertainment and holiday purpose. The ministry said that 4.2 million tourists arrived for these purposes in the first seven months of 2024, a 25% increase over the previous year and an enormous leap over pre-pandemic levels in 2019,” the Ministry said.