The Transformations Of Saudi Arabia's Hotel Market

As Saudi Arabia opens its doors to travellers from across the globe, the hotel industry is responding with enthusiasm, introducing new properties and hospitality concepts that will put the country on the world business and leisure tourism map

- Gemma Greenwood

In September 2019, Saudi Arabia made history by issuing tourist visas online or on arrival to citizens of 49 countries for the first time. Within the first month,

77,000 e-visas were issued, with the figure rising to 350,000 for the final quarter of 2019, the Saudi Commission for Tourism & National Heritage’s (SCTH) Chairman, Ahmed Al Khatib, revealed at January’s World Economic Forum in Davos, Switzerland.

The bold initiative pushed up Saudi Arabia’s visitor number total to 15.5 million in 2019, a figure anticipated to grow by 7 per cent between 2020 and 2024 to around 21.3 million, according to Colliers International data.

The new liberal visa rules are just one facet of the wide-ranging Vision 2030 initiative – Saudi Arabia’s blueprint for rapid socio-economic transformation – with tourism earmarked as a primary growth sector.

Government targets include attracting 100 million visitors a year by 2030, growing tourism’s contribution to GDP to 10 per cent by that date (from the current 2 per cent).

With Saudi Arabia now easier to visit than ever before, local and international hotel operators have responded with vigour, announcing their accelerated growth plans.

At the recent Saudi Arabia Hospitality Investment Conference (SHIC) in Riyadh ( January 2020), global names including Accor, Hilton, InterContinental Hotels Group (IHG), Marriott International, Millennium Hotels & Resorts MEA, Hilton Hotels and Rotana unveiled their ambitious expansion strategies for the kingdom.

There are currently more than 38,912 rooms under construction in Saudi Arabia, equating to 38.3 per cent of existing supply, according to figures by industry analytics specialist STR, and this figure will continue to rise at pace if plans announced at SHIC come to fruition.