Saudi Arabia’s hospitality sector is scaling up rapidly. Nearly 80% of its future hotel supply targets the luxury, upscale, and upper-upscale categories. According to Knight Frank’s Saudi Arabia Hospitality Market Review – 2025, the Kingdom aims to develop 362,000 hotel rooms by the end of the decade. This expansion supports Saudi Arabia’s ambitious target of welcoming 150 million domestic and international visitors annually. Therefore, Saudi Arabia’s hospitality sector expansion reflects its vision to become a global luxury destination.
As of the first quarter of 2025, Saudi Arabia had 167,500 hotel keys. 61% of these properties are already in the high-end segments. An additional 99,500 rooms are either planned or under construction. Of these, 78% focused on premium markets. Faisal Durrani, Partner and Head of Research, MENA at Knight Frank, highlighted the strategic focus on luxury development. “The focus on high-end hotel development plays to Saudi Arabia’s growing reputation as a luxury destination,” Durrani said. However, he also noted the need for more modest accommodation options to meet domestic demand, which remains a crucial component of the sector’s stability. Thus, Saudi Arabia’s hospitality sector expansion is crucial for achieving its Vision 2030 goals.
The Kingdom’s tourism sector has already shown remarkable growth. In 2024, Saudi Arabia hosted 127 million visitors, contributing 4.7% to its GDP. Furthermore, the government is on track to reach its target of a 10% GDP contribution by 2030. International arrivals surged by 9.5%, reaching 30 million visitors. Also, inbound tourism spending hit a record SAR153.61 billion ($40.9 billion). This reflects a 13.8% year-on-year increase, according to the Saudi Central Bank. Saudi Arabia’s hospitality sector expansion is driving significant economic growth. It is solidifying its place in the global tourism market.
One of the key enablers of this growth is the Kingdom’s streamlined eVisa platform. The platform allows citizens from 66 countries, including the US, UK, China, and Japan, to enter Saudi Arabia for leisure, Umrah, business events, and family visits. The simplified visa process has made travel easier and more accessible for visitors. However, Hajj remains under a separate visa system, ensuring dedicated arrangements for the annual pilgrimage.
Saudi Arabia’s hospitality sector expansion is more than just a response to growing tourist numbers—it is a critical element of Vision 2030. By focusing on luxury and upscale accommodations, the Kingdom aims to transform itself into a premier global destination. This will reshape its economic landscape in the process.
