Hospitality in Saudi Arabia Market Size
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 13.23 Billion |
| Market Size (2029) | USD 16.91 Billion |
| CAGR (2024 - 2029) | 5.03 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Hospitality in Saudi Arabia Market Analysis
The Hospitality Industry In The Kingdom Of Saudi Arabia Market size is estimated at USD 13.23 billion in 2024, and is expected to reach USD 16.91 billion by 2029, growing at a CAGR of 5.03% during the forecast period (2024-2029).
The hospitality industry in Saudi Arabia expanded dramatically in the past few years due to several noteworthy government initiatives to develop the hotel industry and increase the nation's total tourism targets. Saudi Arabia is the travel destination with the fastest growth rate in the world, according to the G20. The UNWTO reports that foreign visitor visits in the Kingdom rose by 125% to pre-pandemic levels last year, attracting around 94 million tourists and outpacing the global tourism industry's rebound.
Saudi Arabia plans to invest over USD 550 billion in new travel destinations in the coming six years, making it the world's largest investor in tourism. It is due to its efforts to grow its tourist and hospitality sectors. Saudi Arabia led the Arab ranks for inbound tourism in the first three quarters of the previous year, with about 20 million tourists visiting the Kingdom. With the recent approval of the legislation, the industry hopes to contribute 10% of GDP in the coming six years and reach the goal of 100 million annual tourist visits. Travel restrictions are lifted, and the door is opened for a flood of tourists into the Kingdom. It is due to the new visa regulations like e-visas and visas-on-arrival for visitors from 49 countries, further fueling the growth of the hospitality industry.
The hospitality sector is set up for faster expansion, and the area is currently at the top of the travel and hospitality world. In Saudi Arabia, Rotana is developing seven hotels, including five brand-new establishments in Riyadh that are now under negotiation. Over the next four years, these buildings will nearly quadruple the number of rooms the company operates in the Kingdom to 6,000.
Hospitality in Saudi Arabia Market Trends
An Increase in the Number of Hotels and Suggested Projects
A stunning eighty hotel projects are anticipated to be finished in Saudi Arabia in the current year, according to TopHotelsProjects. By the end of this decade, the Kingdom of Saudi Arabia hopes to welcome 100 million tourists within its borders as part of its Vision 2030 strategy. First, the Diriyah Gate Development Authority (DGDA) unveiled Diriyah Square, the commercial center of the USD 50 billion Diriyah giga project on the outskirts of Riyadh, scheduled to open in the current year. A total of 38 foreign hotel brands are anticipated. 16 of these are verified during the development thus far.
The enormous hotel giant Accor disclosed its intentions to grow in Saudi Arabia. Three agreements were reached to establish significant hotel and real estate projects across the country. Medina's Rua Al Madinah is one of these projects. Saudi Arabia plans to construct 315,000 new hotel rooms by the coming six years, with an estimated development cost of USD 37.8 billion, as part of its continuous efforts to diversify its economy away from the oil sector.
Increase in Online Hotel Booking in Saudi Arabia
According to an Insight Out Consulting analysis, the Middle East tourism market is expected to grow by 40% in the coming two years, with Saudi Arabia and the United Arab Emirates leading the way. The value of online travel reservations in the Middle East rose by 100% in the current year compared to the previous year. This growth is attributed to several factors, including an increase in tech-savvy travelers, the use of customer-facing tech solutions like AI chatbots, mobile apps, and loyalty programs, and the integration of increasingly complex online back-end systems by travel suppliers, particularly hotels, such as booking engines and distribution channels. Half of all reservations made in the KSA and UAE are anticipated to be made online in the coming two years.
Furthermore, Saudi Arabia's high-end and mid-scale hotels play a significant role in the rapid rise of the financial community through online hotel booking. Travelers to Saudi Arabia, both local and foreign, are more likely than ever to book their lodging online, primarily for trips to Makkah, Medina, Riyadh, Jeddah, and Dammam. The Saudi Arabian government is committed to implementing Vision 2030 in order to raise the living standards of its citizens.
Hospitality in Saudi Arabia Industry Overview
The hospitality industry in Saudi Arabia is a combination of several international brands and chain hotels and several domestically grown chain hotels. Many well-established international brands entered several strategic partnership programs with the leading hospitality companies with Middle East origination. They are operating through their brand name under the management contracts of reputed organizations. The market holds great growth opportunities and is welcoming many new investors into the industry. Major Players in the hospitality industry are Al Hokair Group, Dur Hospitality Company, Al Tayer Group, InterContinental Hotels Group, and Marriott International Inc.
Hospitality in Saudi Arabia Market Leaders
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Al Hokair Group
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Dur Hospitality Company
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Al Tayer Group
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InterContinental Hotels Group
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Accor S.A.
*Disclaimer: Major Players sorted in no particular order
Hospitality in Saudi Arabia Market News
- May 2023: Marriott International launched its 31st brand, City Express by Marriott, following its acquisition of the City Express brand portfolio from Hoteles City Express.
- April 2023: Saudi-based Taiba Investments Company acquired a 100% stake in Dur Hospitality Company in exchange for issuing new shares in Taiba. It includes following the deal inked by the duo in December 2022 on a possible securities exchange deal, including a non-binding agreement on structuring and share swap coefficient.
Hospitality Industry In The Kingdom Of Saudi Arabia Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
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4.1 Market Drivers
- 4.1.1 Increase in the Number of Restaurants and Bars in the Industry
- 4.1.2 Increase in the Number of Tourist Attractions and Activities
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4.2 Market Restraints
- 4.2.1 Inadequate Research and Development, Unpredictability of the Market
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4.3 Market Opportunities
- 4.3.1 Increased Interest in Serviced Apartments and Mid-scale Brands
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4.4 Porter's Five Forces Analysis
- 4.4.1 Bargaining Power of Suppliers
- 4.4.2 Bargaining Power of Buyers/Consumers
- 4.4.3 Threat of New Entrants
- 4.4.4 Threat of Substitute Products
- 4.4.5 Intensity of Competitive Rivalry
- 4.5 Impact of COVID-19 on the market
- 4.6 Insights on Revenue Flows from Accommodation and Food and Beverage Sectors
- 4.7 Insights into Leading Cities in Saudi Arabia with Respect to Number of Visitors
5. MARKET SEGMENTATION
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5.1 By Type
- 5.1.1 Chain Hotels
- 5.1.2 Independent Hotels
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5.2 By Segment
- 5.2.1 Service Apartments
- 5.2.2 Budget and Economy Hotels
- 5.2.3 Mid and Upper-Mid Scale Hotels
- 5.2.4 Luxury Hotels
6. COMPETITIVE LANDSCAPE
- 6.1 Market Concentration Overview
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6.2 Company Profiles
- 6.2.1 Al Hokair Group
- 6.2.2 Dur Hospitality Company
- 6.2.3 Al Tayer Group
- 6.2.4 InterContinental Hotels Group
- 6.2.5 Accor S.A.
- 6.2.6 Marriott International Inc
- 6.2.7 Hilton Hotels & Resorts
- 6.2.8 Millennium Hotels and Resorts
- 6.2.9 Cristal Group*
- *List Not Exhaustive
7. FUTURE MARKET TRENDS
8. DISCLAIMER
Hospitality in Saudi Arabia Industry Segmentation
Hospitality falls under the broad umbrella of the service industry, a tertiary sector of the economy. It includes food & beverages, stay, travel, theme parks, hotels, and event planning, amongst others. The Saudi Arabian hospitality industry is segmented by type and segment. By type, the market is segmented into chain hotels & independent hotels. By segment, the market is segmented into service apartments, budget and economy hotels, and mid-scale and upper-mid-scale luxury hotels. The report offers market size and forecasts for the Saudi Arabian Hospitality Market in value (USD) for all the above segments.
| By Type | Chain Hotels |
| Independent Hotels | |
| By Segment | Service Apartments |
| Budget and Economy Hotels | |
| Mid and Upper-Mid Scale Hotels | |
| Luxury Hotels |
Hospitality Industry In The Kingdom Of Saudi Arabia Market Research Faqs
How big is the Hospitality Industry In The Kingdom Of Saudi Arabia Market?
The Hospitality Industry In The Kingdom Of Saudi Arabia Market size is expected to reach USD 13.23 billion in 2024 and grow at a CAGR of 5.03% to reach USD 16.91 billion by 2029.
What is the current Hospitality Industry In The Kingdom Of Saudi Arabia Market size?
In 2024, the Hospitality Industry In The Kingdom Of Saudi Arabia Market size is expected to reach USD 13.23 billion.
Who are the key players in Hospitality Industry In The Kingdom Of Saudi Arabia Market?
Al Hokair Group, Dur Hospitality Company, Al Tayer Group, InterContinental Hotels Group and Accor S.A. are the major companies operating in the Hospitality Industry In The Kingdom Of Saudi Arabia Market.
What years does this Hospitality Industry In The Kingdom Of Saudi Arabia Market cover, and what was the market size in 2023?
In 2023, the Hospitality Industry In The Kingdom Of Saudi Arabia Market size was estimated at USD 12.56 billion. The report covers the Hospitality Industry In The Kingdom Of Saudi Arabia Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Hospitality Industry In The Kingdom Of Saudi Arabia Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
What initiatives are driving the transformation of Saudi Arabia's Hospitality Market?
The transformation of Saudi Arabia's Hospitality Market is being driven by initiatives such as the Red Sea Project and Qiddiya entertainment park. These strategic endeavors are aimed at diversifying tourism offerings and attracting both leisure and business travelers to the region.
Hospitality Industry In The Kingdom Of Saudi Arabia Industry Report
The hospitality industry in Saudi Arabia is experiencing robust growth, driven by strategic initiatives aimed at diversifying the economy and enhancing the tourism sector. The market, segmented into chain and independent hotels, service apartments, and various hotel scales from budget to luxury, is thriving due to government efforts to ease visa regulations and promote tourism with significant investments in infrastructure and luxury accommodations. This expansion has spurred increased demand for diverse lodging options, catering to both domestic and international travelers seeking unique, high-quality experiences. The integration of technology in hotel operations and the rise of online booking platforms are streamlining operations and enhancing guest experiences, further stimulating market competition and growth among hospitality companies in Saudi Arabia. The sector's evolution, focusing on luxury and technology, aims to attract a broader spectrum of tourists and establish Saudi Arabia as a premier travel destination. For detailed statistics and a market forecast, refer to industry reports by Mordor Intelligence™, which provide an in-depth analysis and historical overview of the hospitality market in Saudi Arabia. Get a sample of this industry analysis as a free report PDF download.
