From ancient history to modern luxury, Saudi Arabia’s tourism offerings continue to expand

Saudi tourism is set to surge with significant investments being made throughout the kingdom to enhance both religious and non-religious tourism

by Divsha Bhat

May 3, 2023

According to data released by the General Authority of Statistics (GASTAT), the Saudi Arabian economy achieved impressive growth in 2022, with a GDP growth rate of 8.7 per cent. This is the highest growth rate among G20 countries and has surpassed international expectations of a maximum of 8.3 per cent. GASTAT also highlighted the GDP report and national accounts’ indicators for Q4 2022, stating that this growth rate is the highest annual rate achieved in the last decade.

Revamping its tourism landscape is among the kingdom’s key priorities to help diversify its economy. In recent years, Saudi Arabia has made significant efforts to attract international visitors, including easing visa requirements for tourists from established markets.

The launch of a free 96-hour stopover visa for passengers booked on flynas or Saudia flights by the Saudi Tourism Authority is among a raft of initiatives aimed at making the country’s tourism offerings more convenient.

The Saudi government has committed $100m to the Tourism Development Fund in partnership with the World Bank to diversify the country’s income from fossil fuel activities and increase tourism. The sector aims to welcome up to 100 million visitors annually by 2030, representing 10 per cent of the country’s GDP.

International tourism

According to Minister of Tourism Ahmed Al-Khateeb, Saudi Arabia has set its sights on attracting 25 million foreign tourists in 2023 and creating one million jobs in the vital tourism sector. In 2022, the total tourism expenditure amounted to SAR185bn, an increase of 93 per cent over the previous year, with the kingdom reporting a record number of tourists from among the G20 countries. Despite the pandemic-related economic disruptions and inflationary pressures in 2021 and 2022, the most affluent segments have been largely unaffected by price pressures, which bodes well for niche tourism segments such as ecotourism and heritage tourism.

The Saudi government aims to attract a diverse group of tourists to its giga-projects, which include The Red Sea Project’s sustainable luxury experiences, AlUla’s landmarks, Diriyah’s cultural heritage developments, and NEOM’s unique nature experiences. In addition to targeting Muslim pilgrims, the government seeks to increase arrivals from both Western and Asian markets for non-religious tourism.

Modernising transport infrastructure

Expanding Saudi Arabia’s tourism sector will require improvements in transport infrastructure, human resources and digital expertise. Facilitating more arrivals to the kingdom and enhancing internal mobility is equally important. The recent launch of Riyadh Air, Saudi Arabia’s new national carrier, by Public Investment Fund (PIF) is expected to add $20bn to the non-oil GDP growth of the kingdom, generating over 200,000 direct and indirect jobs.

Riyadh Air will offer tourists from around the world the chance to visit Saudi Arabia’s cultural and natural attractions.
Meanwhile, in March, Saudi Arabia Railways also signed a memorandum of understanding with Italy’s Arsenale Group to launch the region’s first luxury train named Dream of the Desert, which will be inaugurated in 2025. The luxury train is expected to promote tourism and cultural affairs in the kingdom and offer visitors and residents a unique and integrated luxury transportation experience.

Major projects

Saudi Arabia is building a host of giga-projects and attractions in partnership with PIF to deliver the goals of Vision 2030. Qiddiya Investment Company, in collaboration with Bjarke Ingels Group, developed the masterplan for a colossal entertainment destination in Riyadh known as Qiddiya, which is poised to become the world’s most extensive entertainment city. Over 300 facilities, such as theme parks, water parks, and a sports city, will be available to visitors. In February 2022, Qiddiya Investment Company awarded a construction contract worth $750m for Saudi Arabia’s first and the Middle East’s most massive water park, comprising nine themed zones and 22 rides and attractions.

Meanwhile, Saudi’s grand project NEOM, which is estimated to cost $500bn, will feature cognitive cities, research centres, ports, tourist destinations and entertainment venues. Saudi officials are aiming to attract approximately one million visitors by 2025 and five million by 2030 to NEOM.

Sindalah, NEOM’s first luxury island, is scheduled to open in early 2024, offering a marina, beach club, golf course and yacht club, as well as hotels and various food and beverage outlets. Among the project’s highlights are The Line, a zero-carbon city with “vertically layered” buildings for living, working, and leisure; Trojena, a mountain resort with a ski village, ski slope and a nature reserve and Oxagon, an octagonal floating port city.

The Red Sea, an eco-tourism-focused giga-project in Saudi Arabia, is being developed by Red Sea Global, which is owned by the PIF. It is set to open its doors to visitors in 2023 and is being touted as the world’s most sustainable luxury tourism destination.

Red Sea Global is also spearheading the development of the Amaala project and has awarded more than 1,300 contracts for both projects, amounting to almost $8.5bn. The company is also exploring and implementing various eco-friendly concepts, including green concrete to reduce emissions, sustainable food production and clean mobility strategies. The destination will rely entirely on renewable energy sources to operate.

PIF has recently announced Diriyah as its fifth giga-project in Saudi Arabia. The $50bn development is situated on the outskirts of Riyadh and is primarily focused on culture and lifestyle, providing entertainment, dining and shopping options. Diriyah encompasses At-Turaif, a UNESCO World Heritage Site, and historical district offering cultural and educational activities, hotels, museums, and retail spaces.

Visitors and residents can explore Saudi Arabia’s history at the museums, as well as enjoy the arts district with galleries, restaurants and retail experiences. Another major attraction in Saudi Arabia is AlUla, considered the world’s most massive living museum. The Royal Commission for AlUla is investing $5.2bn in the first phase of the $15bn project. This is in collaboration with the French government agency Afalula. The project will be developed in three phases by 2023, 2030 and 2035.

Following a robust recovery in 2021 and sustained momentum in 2022, underpinned by improved domestic and international demand, the Saudi Arabian economy is forecasted to gain pace towards a complete revival this year.

The outlook looks promising, as considerable investments are being made throughout the country to enhance both religious and non-religious tourism, indicating a surge in the kingdom’s travel industry, which is projected to expand significantly by 2030.