Saudi Arabia is gearing up to become one of the world’s largest tourist destinations, with the number of hotel rooms to more than triple in the coming decade. This is according to market analysis by Knight Frank.

With a current supply of around 134,000 hotel rooms, Saudi Arabia today lags Dubai (currently 140,000 keys) and other major tourism destinations. But fast forward seven to eight years, and the kingdom is expected to have leapfrogged many of its rivals, with 315,000 new hotel rooms expected to lift total supply to 450,000 by 2023.

“The volume of hotel room keys planned to be delivered in the kingdom by 2030 is nothing short of incredible,” said Faisal Durrani, a partner at Knight Frank and Head of Research for the Middle East. The total cost of the hotel room revolution is forecasted at $37.8 billion.

The development of the hospitality sector is a cornerstone of the Kingdom’s Vision 2030, which aims to propel Saudi Arabia into a top tourist destination, and broader economic diversification plans.

Domestic tourism will be the largest driver, according to Knight Frank. The industry is already alive and thriving, with 65% of Saudis travelling within the Kingdom between one and three times a month. “What’s fascinating however is the fact that 58% of Saudis we surveyed as part of our report opt not to stay in hotels,” said Durrani.

Turab Saleem, Head of Hospitality for Saudi Arabia at Knight Frank, said that the key to driving interest among domestic tourists will be to “cater to the diverse accommodation needs” of the group, including the younger generation.

“The prevalence of large families traveling together may clearly be a factor, but so is cost, quality and location. Notably, just 17% of the planned hotel supply falls in the 3 star or below category, and with 56% of the Kingdom’s population aged below 35, the demand for various accommodation types will likely continue to emerge as a significant consideration for the industry,” explained Durrani.

“The sector will need to think broader and incorporate the likes of luxury glamping sites and youth hostels to cater to this increasingly important segment of the market if it is to thrive and flourish, being mindful of the cultural sensitivities and the need for appropriate adaptations.”

Meanwhile, drawing more international tourists will require a supportive infrastructure including new airports and national airlines, both of which are in the works, combined with an awareness push in international markets.

Last month, the Saudi Tourism Authority signed a memorandum of understanding with China’s Trip.com to promote Saudi Arabia as a tourism destination. Saudi hopes to draw 3.9 million Chinese visitors per year by 2030. In comparison, in 2019, ‘only’ 100,000 Chinese tourists visited the kingdom.

According to the World Travel & Tourism Council, the largest number of international tourists currently flocking to Saudi Arabia come from Kuwait, followed by the United Arab Emirates, and Egypt.

In related news, a March 2023 report by Deloitte found that Dubai’s hotel market ranks as one of the best performing worldwide.