Saudi Arabia Hospitality Market

Hospitality in Saudi Arabia Market Size, Growth Analysis & Forecast:

The Saudi Arabia hospitality market size was valued at USD 48.6 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 109.6 Billion by 2033, exhibiting a CAGR of 9.5% from 2025-2033. The Saudi Arabia hospitality market is majorly driven by the rising number of international tourists, substantial government investments under Vision 2030, promotion of secondary cities as tourist destinations, adoption of advanced digital technologies, enhancing emphasis on sustainable tourism, increased demand for luxury accommodations, restoration of heritage sites, and the hosting of large-scale cultural and sports events.

The market in Saudi Arabia is primarily driven by the increasing arrival of international tourists, promoted by the country's ambitious plans to diversify its economy under the Vision 2030 agenda and strengthen tourism infrastructure. Moreover, increasing investments in luxury resorts, environment-friendly accommodations, and restoring heritage sites is bolstering the market. Apart from this, the accelerating number of cultural and sports events, such as Riyadh Season and Formula E race is further propelling the market. For instance, Losberger De Boer constructed high-end temporary event spaces for Formula E in Riyadh, accommodating 1,000 VIP guests. These custom eco-conscious structures were completed within a 10-day timeframe, offering premium hospitality and stunning viewing experiences. The project showcased the company's ability to handle tight schedules and complex logistics while meeting the high standards of an elite event. Media coverage of events follows the vision of 2030, which makes the country a prime destination. Moreover, modern racing circuits such as Qiddiya Speed Park are driving infrastructure and economic growth. For services in the market, governments have been strategically partnering their leading global hospitality chains, promoting increased service standards, favoring market growth.

Besides, the market is experiencing high growth with an increase in disposable incomes and altered consumer preferences for local experiences as well as luxury tourism. Moreover, the hospitality concepts with innovative developments, mixed-use developments, and wellness center integration are further diversifying the scope of this market. The growing momentum in sustainable tourism, assisted with green building initiatives in hospitality sectors, is further pushing the growth momentum of this market. Furthermore, utilizing digital solutions, like AI-based guest services and mobile platforms for booking, increases customer satisfaction and helps the market keep growing continuously. Besides, efforts from the government to brand secondary cities as destinations create new opportunities and guarantee that the hospitality market is in a steady progression. Saudi Arabia's hospitality sector is advancing sustainability through eco-friendly practices like energy-efficient technologies and local sourcing, with 83% of travelers valuing sustainable travel and 75% planning more eco-friendly trips. High-profile projects such as the Red Sea Development, AlUla, and Al-Balad emphasize tourism that preserves ecosystems and involves local communities. These efforts align with government initiatives and aim to balance environmental, social, and economic priorities in the Kingdom's expanding tourism landscape, ensuring long-term growth profile for this sector.

Saudi Arabia Hospitality Market Trends:

 Emphasis on Sustainable Tourism

The hospitality in Saudi Arabia market is majorly driven by an enhanced focus on sustainable tourism, in accordance with the country's Vision 2030 goals. For instance, almost 85% of all LEED-certified hotels in the Middle East and North Africa region are based in Saudi Arabia, an indicator of a commitment to environmental standards. This commitment to sustainability not only appeals to the environmentally conscious traveler but also positions the Kingdom as a leader in eco-friendly tourism, thereby improving its global reputation and attracting a growing segment of the market. Additionally, the smart hotel solutions include keyless room entry and IoT-enabled devices, thereby creating smoother and more modern guest experiences which in turn is propelling the market further.

Integration of Technological Innovations

Rising integration of cutting-edge technologies is among the major Saudi Arabia hospitality market trends. Moreover, hotels are embracing AI-powered solutions, such as chatbots and virtual assistants, for personalized services and streamlining customer interactions. Mobile applications facilitate hassle-free booking, check-in, and check-out, catering to the convenience needs of tech-savvy travellers. Smart hotel technologies with IoT-enabled systems optimize energy management and ensure tailored in-room experiences. These innovations meet the expectations of modern guests and strengthen operational workflows, positioning Saudi Arabia's hospitality sector as a hub for cutting-edge solutions. For instance, on 9^th October 2024, Shiji Group announced established a new entity in Saudi Arabia to support the Kingdom's rapidly growing hospitality sector, achieve more local presence, and encourage regional growth. The new office will provide advanced technology solutions and localized customer service in the region to hotels and F&B outlets.

Ongoing Development of Secondary Cities

The Saudi government is also promoting secondary cities as sources of tourism destinations to diversify its tourism sectors. Based on the report by Arab News, this strategy helps attract up to 150 million visitors annually by 2030 and improves the contribution of tourism to the GDP of the nation. By investing in infrastructure and marketing for cities beyond the traditional hubs, Saudi Arabia is expanding its hospitality market, creating new opportunities, and ensuring steady progression toward its economic diversification goals. Moreover, the focus on secondary cities allows Saudi Arabia to promote its diverse regional identity through traditional crafts, cuisines, and festivals that attract travellers who want to have authentic cultural experiences. Local businesses in these cities are benefiting from increased tourism activity, accelerating job creation and thereby propelling the regional economy.

Key Growth Drivers of Saudi Arabia Hospitality Market:

Government efforts to promote leisure and entertainment tourism

Government initiatives to promote leisure and entertainment tourism are driving the market expansion by broadening options beyond religious tourism and establishing the Kingdom as a worldwide tourism center. Vision 2030 has emphasized tourism as a crucial economic sector, leading to the creation of entertainment areas, theme parks, cultural events, and large-scale projects, such as NEOM that draw in both local and foreign visitors. Programs like eased visa regulations, cultural activities, and music festivals are broadening visitor demographics and lengthening their stay, resulting in increased demand for hotels, resorts, and serviced housing. This change is generating opportunities for hospitality providers to create customized experiences that match leisure and entertainment-focused tourism activities. With an increasing number of travelers discovering Saudi Arabia for various experiences, the hospitality industry is experiencing significant growth and development.

Increasing investments in luxury hotels and resorts

Rising expenditure on luxury hotels and resorts is propelling the market growth by enhancing the country’s ability to cater to affluent domestic and international tourists seeking premium travel experiences. Global brands and investors are entering the Kingdom with high-end developments in key destinations, such as Riyadh, Jeddah, and the Red Sea coast, creating a thriving luxury tourism landscape. These investments focus on world-class amenities, spa facilities, gourmet dining, and sustainable designs that align with the expectations of upscale travelers. Luxury resorts near mega projects are further boosting Saudi Arabia’s reputation as a luxury tourism destination. By attracting high-spending visitors, such developments are not only generating significant revenue but also elevating the overall hospitality ecosystem, supporting the sector’s growth trajectory.

Rising adoption of digital booking platforms

The adoption of digital booking platforms is streamlining access to accommodation, enhancing customer convenience, and broadening the market reach for hotels and resorts. With the growing penetration of smartphones and internet usage, travelers increasingly rely on online booking channels and apps to compare prices, read reviews, and make instant reservations. This digital shift allows hospitality providers to optimize occupancy rates, manage real-time pricing, and engage with customers through personalized offers and loyalty programs. Additionally, assimilation of advanced technologies like mobile check-ins further enriches the guest experience. Digital platforms also provide greater visibility to lesser-known destinations and boutique stays, supporting tourism growth across the Kingdom. As user preferences are shifting towards seamless digital interactions, online booking platforms are fueling hospitality sector expansion.

Saudi Arabia Hospitality Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Saudi Arabia hospitality market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on type and segment.

Analysis by Type:

• Chain Hotels
• Independent Hotels

Chain hotels are an important part of the hospitality industry in Saudi Arabia, offering standardized services and amenities for international travelers looking for quality consistency. Most chain hotels are branded internationally, and therefore, known to many tourists. Therefore, their presence in the Kingdom contributes to the attainment of the goals of the Vision 2030. Chain hotels attract business and leisure travelers due to modern facilities and strong global marketing networks.

Independent hotels are a crucial part of Saudi Arabia's hospitality market as they offer unique, locally inspired experiences that reflect the rich culture and traditions of the country. They particularly appeal to tourists who require customized services and authentic regional hospitality. Their flexibility to adapt to innovative concepts, such as boutique themes and eco-friendly practices, adds relevance to the growing landscape of tourism, supporting secondary cities and niche markets.

Segment Insights:

• Service Apartments
• Budget and Economy Hotels
• Mid and Upper Mid-scale Hotels
• Luxury Hotels

Service apartments play a crucial role in the Saudi Arabian hospitality market as they are linked to the increasing demand from business travellers and expatriates for long-term stays. Such service apartments offer the convenience of a hotel with the comfort of home, including fully equipped kitchens and ample living space. Service apartments target travellers who want flexibility and value-for-money, which suits the rising preference for personalized and extended stay options in the Kingdom.

Budget and economy hotels play an important role in catering to the growing segment of cost-conscious travellers in Saudi Arabia. These hotels offer cheap accommodation without sacrificing basic amenities, which appeals to local tourists and pilgrims visiting holy cities such as Mecca and Medina. Their strategic locations and competitive pricing ensure accessibility, making them an integral part in meeting the varied tourism needs of the Kingdom under Vision 2030.

Middle to upper mid-scale hotels play an important role in the Saudi Arabia’s hospitality sector as it forms a bridge between budget accommodation and luxury accommodation, catering for leisure and business travellers alike. They offer comfort with a quality and affordability balance with modern amenities such as conference rooms, fitness centres, and dining options. Their representation in the Saudi hospitality market reflects the Kingdom's aim of attracting a broader audience with high-quality services offered at competitive price points for changing consumer preferences.

Regional Analysis:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

The Northern and Central regions of Saudi Arabia are significant for the hospitality market, given their historical and cultural importance. Riyadh, being the capital, attracts business travellers and government-related tourism, thus increasing demand for luxury and mid-scale accommodations. Investment in modern infrastructure, including convention centres and mixed-use developments, is further enhancing the appeal of the region. Cultural landmarks such as Diriyah offer unique experiences, attracting both domestic and international visitors.

The Western region is a keystone in the hospitality market due to its religious and coastal tourism. Makkah alone attracts millions of pilgrims to Hajj and Umrah every year, which in turn requires continuous accommodation - from budget to luxury accommodations. Jeddah as a gateway city combines religious tourism with leisure and business attractions such as the Jeddah Corniche and Red Sea developments, putting the region on the multi-faceted destination map.

The Eastern region plays a crucial part of the hospitality market in Saudi Arabia, driven by its oil-based economy and proximity to the Gulf Cooperation Council countries. Cities such as Dammam and Al Khobar have become major business and convention destinations, supported by an increasing variety of hotels and conference facilities. Tourism to the coastal areas as well as family-friendly attractions such as Half Moon Bay is also attracting the leisure tourists, complementing strong business-oriented hospitality.

The Southern region is crucial in the Saudi hospitality market due to its cooler climate and natural landscapes, it is popularly sought after for destinations such as Abha and Al Baha for eco-tourism and cultural explorations that provide unique experiences bound to the region's heritage. Investment in boutique hotels and adventure tourism activities, such as hiking and exploring the Asir mountains, is creating new opportunities catering to both local and international visitors seeking distinctive travel experiences.

Competitive Landscape:

The competitive landscape of Saudi Arabia's hospitality market is characterized by rapid expansion and innovation, driven by ambitious national strategies and increased global attention. The market features a blend of luxury, mid-scale, and budget accommodations catering to diverse traveler segments, including religious pilgrims, business professionals, and leisure tourists. Developers are focusing on integrating advanced technologies, eco-friendly practices, and unique cultural experiences to differentiate offerings. Additionally, the influx of international investments and partnerships is intensifying competition, while government-led initiatives are fostering opportunities in secondary cities and sustainable tourism. This dynamic environment is reshaping the industry and driving its continuous evolution.

Saudi Arabia Hospitality Market News:

• August 2025: The Hospitality Network (THN), a top platform linking essential decision-makers in the hospitality and real estate industries, revealed its expansion into Saudi Arabia. THN's Riyadh hub would facilitate impactful discussions, create new alliances, and customize its solutions to help stakeholders stay aligned with the rapidly evolving developments in the hospitality and real estate sectors.
• July 2025: IDS Next finalizes over 50 hotel installations in Saudi Arabia. IDS Next’s ERP solutions were tailored for multi-property management, intricate integrations, and regulatory requirements, while accommodating various languages, which made them perfect for Saudi Arabia’s varied workforce and global clients.
• October 2024: New Murabba Development Company, a part of Saudi Arabia's Public Investment Fund, declared its platinum sponsorship for the Future Hospitality Summit taking place in Dubai from September 30 to October 2. During the event, CEO Michael Dyke announced plans for a 27 Million square meter project that would include 18 communities, more than 100,000 housing units, 9,000 hotel rooms, and the Mukaab, a 400-meter cubic building that combined contemporary Najdi architectural style with cutting-edge digital technologies.

Saudi Arabia Hospitality Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia hospitality market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia hospitality market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia hospitality industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.