Tourism Breaking News
The kingdom is poised for a major expansion in its hospitality sector by creating 315,000 hotel units by 2030, according to global real estate consultancy Knight Frank. Knight Frank stated that this growth will highlight the increase in hotel room inventory in Saudi Arabia to become larger than Dubai’s current 140,000 hotel units. The development of the hospitality sector is a cornerstone of Saudi Arabia’s economic diversification plans.
Faisal Durrani, Partner and Head of Research in the Middle East, explained, “The size of the hotel room units planned to be delivered in the Kingdom is unbelievable, with the total number of rooms likely to reach nearly 450,000 hotel rooms. To illustrate, the UAE today has a total of approximately 200,000 hotel rooms, including Dubai’s 140,000 hotel units, meaning Saudi Arabia is poised to grow by up to 58% greater than the UAE. The bulk of the success of Saudi Arabia’s future tourism and hospitality market will be its local tourism sector. The sector is already thriving, with 65% of Saudis already traveling within the Kingdom one to three times a month. But what is surprising is the fact that 58% of Saudis we spoke to as part of the 2023 Saudi report choose not to stay in hotels.”
Speaking about the need for diversity in accommodation options, Durrani explains, “The prevalence of large families travelling together may be a factor, as can cost, quality and location. Our Saudi Report 2023. Only 17% of planned hotel fittings are for 3-star or lower-class hotels, and with 56% of KSA residents under the age of 35, the demand for different hotel accommodation types will continue to emerge as an important consideration for the industry. We need to think outside the box and then combine luxury campsites and youth hostels. so that we can meet the needs of this important and growing market segment to thrive and recover, taking into account cultural sensitivities and adaptations.”
The rapid expansion of hospitality-related offerings across the country is expected to play an important role in boosting domestic tourism, with Knight Frank predicting it will form a key part of the future of the Kingdom’s already booming hospitality sector.
Turab Salim, Head of Hospitality in Saudi Arabia, said: “Saudi Arabia is on the brink of becoming one of the world’s largest tourism markets, with a total planned cost of hotel room development in Saudi Arabia amounting to US$37.8 billion, according to our estimates, and mega projects such as the NEOM construction project, which is a pioneer in supplying supply lines. The key to achieving this goal lies in meeting the diverse accommodation needs of local tourists, including the younger generation. In addition, supporting the hospitality infrastructure, represented by the construction of new airports and national airlines, both of which are in progress, coupled with a legislative framework that facilitates access to the sector for international investors, will be crucial.”
