Saudi Arabia Hotel Market Size And Forecast Report 2024-2032

Saudi Arabia Hotel Market Outlook

The Saudi Arabia Hotel Market is projected to reach US$ 62.57 billion by 2030, driven by ambitious tourism initiatives under the Vision 2030 plan. This strategy aims to position Saudi Arabia as a leading global tourist destination, targeting 100 million annual visitors by 2030.

Key Highlights of the Saudi Arabia Hotel Market

• Market Growth: The Saudi Arabia hotel market is anticipated to experience a compound annual growth rate (CAGR) of 12.23% from 2023 to 2030. This growth is fueled by the country’s ambitious tourism initiatives and strategic projects aimed at enhancing the hospitality landscape.
• Current Valuation: As of 2023, the market was valued at approximately US$ 27.90 billion, reflecting the significant investment and development occurring within the sector.
• Hotel Expansion: The country plans to introduce 315,000 new hotel rooms with an estimated investment of US$ 37.8 billion. This expansion is part of Saudi Arabia’s Vision 2030 initiative, which aims to boost tourism and accommodate an expected 100 million annual visitors by 2030.

Growth Drivers of the Saudi Arabia Hotel Market

The Saudi Arabia hotel market is poised for significant growth due to several key drivers:

1. Vision 2030 Initiative:
   • The government’s Vision 2030 plan aims to diversify the economy and enhance tourism, targeting 100 million annual visitorsby 2030. This initiative includes substantial investments in infrastructure and hospitality.
2. Increased Tourism Activities:
   • The rise in both religious and leisure tourism has led to a surge in hotel demand. Events like Hajj and Umrah attract millions of visitors each year, boosting the hospitality sector.
3. Major Development Projects:
   • Ambitious projects such as NEOM, Qiddiya, and The Red Sea Developmentare set to create new tourist attractions and hotel accommodations, attracting global travelers and investments.
4. Government Support and Investments:
   • The Saudi government is actively investing in the tourism sector, offering incentives for hotel construction and renovation, which enhances the overall hospitality landscape.
5. Growing Middle-Class Population:
   • The expanding middle class in Saudi Arabia, along with increased disposable income, is driving demand for varied hotel options, from budget to luxury accommodations.
6. Improved Connectivity:
   • Enhanced transportation infrastructure, including new airports and improved road networks, facilitates easier access for international travelers, contributing to hotel growth.
7. Digital Transformation:
   • The rapid adoption of online booking platforms and mobile applications is making hotel reservations more accessible and appealing to tech-savvy travelers.
8. Cultural and Entertainment Initiatives:
   • The introduction of various cultural, entertainment, and sporting events is attracting tourists, further driving the need for hotel accommodations.

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Major Projects:

• GIGA Initiatives: Projects like Qiddiya, The Red Sea Development, and NEOM are crucial to achieving tourism goals.

Market Segmentation of the Saudi Arabia Hotel Market

The Saudi Arabia hotel market can be segmented based on various criteria:

1. By Hotel Type

• High-End Hotels:
  • Focus on luxury accommodations and premium services. This segment is experiencing rapid growth, attracting affluent travelers seeking unique experiences.
• Mid-Scale Hotels:
  • Offer comfortable and affordable lodging, catering to both business and leisure travelers. This segment is expanding to meet the demands of a growing middle-class population.
• Budget Hotels:
  • Provide economical options for travelers, emphasizing value for money. This segment is gaining traction as domestic and international tourism increases.

2. By Ordering Platform

• Online Booking:
  • Rapid digitalization and consumer preference for convenience have led to a surge in online reservations through mobile apps and websites. This segment is expected to dominate the market.
• Offline Booking:
  • Traditional booking methods through travel agencies and direct hotel visits remain relevant, particularly for certain demographics and business travelers.

3. By Region

• Makkah:
  • A key pilgrimage destination with a high demand for hotel services, particularly during Hajj and Umrah seasons.
• Riyadh:
  • The capital city, known for its business and conference facilities, has a robust hotel market catering to corporate travelers.
• Madinah:
  • Another significant pilgrimage site, attracting visitors year-round, necessitating a range of hotel accommodations.
• Jeddah:
  • A vibrant city along the Red Sea, known for its luxury and boutique hotels, appealing to both tourists and business travelers.
• Al Khobar and Dammam:
  • These cities are growing as business hubs, with increasing demand for hotels catering to corporate guests

Company News in the Saudi Arabia Hotel Market

Here are some recent developments related to key companies in the Saudi Arabia hotel industry:

1. IHG Hotels & Resorts:
   • In 2023, IHG announced a franchise agreement for a new Hotel Indigoin Oxagon, a coastal city part of the NEOM project, enhancing its presence in the region.
2. Marriott International:
   • Marriott continues to expand its portfolio in Saudi Arabia, focusing on high-end properties as part of the Kingdom’s tourism vision.
3. Accor Middle East:
   • Accor has been actively involved in developing luxury hotels across the country, aligning with Saudi Arabia’s Vision 2030 goals for increasing hotel capacity.
4. Hilton Hotels:
   • Hilton is expanding its footprint in major cities like Jeddah and Riyadh, targeting both business and leisure travelers to cater to the growing demand.
5. Dur Group:
   • Dur Group is investing in new projects aimed at enhancing the hospitality experience in Saudi Arabia, focusing on luxury hotel offerings.
6. Al Hokair Group:
   • The group is renovating existing properties and exploring new projects to capture the growing tourist market.
7. Altyaar Group:
   • Altyaar is actively seeking partnerships with international hotel brands to diversify its offerings and improve service quality.

Key Players in the Market:

• Dur Group
• Al Hokair Group
• Altyaar Group
• IHG Group
• Marriott International
• Accor Middle East
• Hilton Hotels