Saudi Arabia's Tourism Sector: A Record-Breaking Journey to Economic Diversification

Saudi Arabia’s tourism sector is on a trajectory of unprecedented growth, setting new records in foreign tourist spending and positioning itself as a key pillar of the Kingdom’s Vision 2030 economic diversification plan.

The first half of 2024 has already seen foreign tourist expenditures surpassing 90 billion riyals (approximately $24 billion), indicating a strong likelihood that the Kingdom will break yet another record by the year’s end.

This follows a landmark year in 2023, where foreign tourist spending reached 141 billion riyals ($37.5 billion), the highest in the nation’s history.

Economic Impact and Strategic Goals

Tourism is not just a thriving industry but a central component of Saudi Arabia's Vision 2030 strategy, aimed at reducing the Kingdom’s dependence on oil.

The ambitious plan seeks to increase tourism’s contribution to the GDP to 10% and attract 150 million tourists annually by 2030, including 70 million international visitors.

Preliminary figures for 2024 reveal that tourism's direct contribution to Saudi Arabia's GDP has increased to 5%, up from 4.5% in 2023, according to Minister of Tourism Ahmed Al-Khatib.

Inbound Tourists: A Global Attraction

Saudi Arabia's appeal as an international tourism destination is growing rapidly. In 2023, the Kingdom welcomed 27 million international visitors, marking a significant influx of global tourists.

Of these, 15 million were inbound tourists in the first half of 2024 alone, contributing heavily to the SAR143 billion ($38 billion) spent by tourists during this period. T

his surge is largely driven by the Kingdom's strategic initiatives to enhance its global appeal, such as developing luxury destinations like Neom, Red Sea Global, and Diriyah.

The GCC countries, in particular, have been major contributors to this influx. Bahrain led the way with 3.4 million tourists, followed by Kuwait with 2.3 million, the UAE with 1.4 million, Qatar with 1.1 million, and Oman with 455,000 visitors.

The steady increase in international visitors underscores Saudi Arabia's successful efforts in positioning itself as a premier global tourism destination.

Domestic Tourists: The Backbone of the Sector

While international tourists play a crucial role in boosting Saudi Arabia's tourism revenues, domestic tourism remains the backbone of the sector.

In the first half of 2024, 44 million domestic tourists traveled across the Kingdom, significantly contributing to the SAR143 billion in total tourism spending.

Domestic tourism is vital to sustaining the tourism sector year-round, providing a consistent flow of visitors that supports local businesses and cultural attractions.

Saudi Arabia's strategy to boost domestic tourism includes promoting its diverse natural landscapes, cultural heritage sites, and modern attractions.

The government’s focus on creating engaging experiences for residents, such as family-friendly entertainment and heritage festivals, has played a significant role in encouraging Saudis to explore their own country.

The combined number of domestic and international tourists in 2023 exceeded 109 million, highlighting the robust performance of the Kingdom's tourism sector.

Strategic Investments and Future Outlook

To support the growing influx of tourists, both domestic and international, Saudi Arabia is making substantial investments in its tourism infrastructure.

The Kingdom is targeting up to $80 billion in private investments in the tourism sector by 2030 and has already secured $13 billion.

Additionally, Saudi Arabia plans to invest approximately $800 billion of its own funds into the tourism industry over the next decade.

These investments are crucial for achieving the Vision 2030 goal of attracting 150 million tourists annually and increasing tourism's contribution to GDP to 10%.

The Tourism Development Fund has been instrumental in this growth, contributing over 7.4 billion riyals (around $2 billion) to support more than 100 tourism projects with a total value exceeding 35 billion riyals ($9 billion).

These projects have added more than 7,500 hotel rooms and suites in key tourist destinations, further enhancing the Kingdom's appeal to both domestic and international travelers.