Published on March 21, 2026
In the current economic climate, the Saudi Arabia hotel sector is observed to be entering a phase of significant and sustained development. It is reported by industry analysts that the existing inventory of 171,650 rooms is being strategically augmented to accommodate an unprecedented rise in tourism demand. According to the latest Saudi Report issued by Knight Frank, it is estimated that approximately 94,500 additional keys are currently situated within the construction pipeline or have reached advanced stages of planning. This movement follows a period where the national
travel and tourism industry was seen to expand by 32 percent, indicating a robust level of activity across the sectors of hospitality and infrastructure.
It is suggested by Oussama El Kadiri, the head of hospitality at Knight Frank MENA, that this trajectory is being propelled by a combination of state-led initiatives and significant private sector contributions. In 2024, a record SAR444.3 billion was contributed to the national economy by the tourism sector, which represents 11.5 percent of the total GDP. This figure is noted as the highest within the region. Furthermore, international visitor spending was recorded at SAR49.4 billion during the first quarter of 2025, reflecting a year-on-year growth of nearly 10 percent.
Shifting Paradigms in Visitor Demographics
The nature of arrivals into the Kingdom is being fundamentally transformed. While religious journeys remains a cornerstone of the industry, it is observed that non-religious travellers now constitute 59 percent of total international arrivals. This is a marked increase from the 44 percent recorded in 2019. In 2024, it was noted that 29.7 million international visitors were hosted, alongside 86.2 million domestic tourists.
The geographic origins of these visitors are also diversifying. Asia has been identified as the primary source of international arrivals, with 9.7 million visitors. Within individual markets, Egypt is cited as the largest contributor with 3.2 million visitors, followed closely by Pakistan and Bahrain. It is remarked by Faisal Durrani of Knight Frank that the government’s revised target of 150 million annual visitors by 2030 underscores a dual ambition: maintaining the status of the Kingdom as the global hub for Islamic pilgrimage while simultaneously expanding into the international leisure and business segments.
Regional Developments and City-Specific Growth
A significant portion of the projected hotel supply is being concentrated within the Holy Cities and the capital. Riyadh is expected to witness a 19 percent increase in its quality room stock, with the inventory projected to reach 30,330 keys by 2027. In Makkah and Madinah, massive projects such as Rua Al Haram and Rua Al Madinah are expected to contribute over 252,000 rooms collectively. It is emphasized that 64 percent of these new developments are being positioned within the four- and five-star categories to cater to high-value travellers.
Beyond the major urban centers, regional destinations are also being prioritized. Locations such as Abha, Taif, and AlUla are being developed to attract domestic and international tourists seeking cultural and nature-based experiences. It is reported that AlUla now accounts for 20 percent of domestic travel, while coastal destinations like Umluj and Jizan are beginning to gain traction. The integration of regional connectivity is being viewed as a vital component of the National Tourism Strategy.