Saudi hospitality sector sees record double-digit growth
Across Saudi Arabia's hospitality sector, the average daily rate (ADR) climbed by 10.8%, and revenue per available room (RevPAR) rose by 12.3% in the 12 months to March. This growth has been driven largely by strong demand in the holy cities and the capital.
In 2024, Saudi Arabia welcomed a record 30 million international visitors, highlighting growing global interest in the country as a travel destination. Looking ahead, the target is to attract 70 million international tourists by 2030, stated Knight Frank in its latest report.
Makkah remains a critical destination for religious tourism, supported by infrastructure upgrades and increased hotel capacity, it stated.
In Q1 2025, ADR rose by 28.9% year-on-year to SAR 859, while RevPAR was up by 35.7% to SAR 673. The surge in performance reflects heightened demand linked to the rise in issued Umrah visas, which grew by 8.3%, according to Ministry of Hajj data.
With more than 8,500 rooms under construction across 12 hotel developments, Makkah's total inventory is set to increase from 63,428 to 71,643 rooms by 2027, according to Knight Frank.
Large-scale masterplans such as Masar Destination and Rua Al Haram aim to open up Makkah, as the spiritual heart of Islam, to a greater number of visitors, improving access, capacity and guest flow within walking distance of Al Haram, it stated.
In Q1, the ADR in Madinah reached SAR891 ($237) – the highest in the Kingdom and an 11.8% year-on-year increase – while RevPAR increased by 15.1% to SAR 724.
Madinah currently has 20,673 hotel rooms, and an additional 2,100 keys expected to be delivered by 2027. Major international operators continue to expand their presence, including Hilton and Marriott, with planned openings totalling over 6,000 rooms by these two operators alone.
In parallel, Rua Al Madinah, a new giga project located east of the Prophet's Mosque, is set to reshape the hospitality landscape with over 47,000 planned hotel rooms, integrated transit and public realm enhancements, said the industry expert in its report.
Amar Hussain, Associate Partner – Research, Middle East, said: "These latest figures point to resilient demand amid limited new supply and further highlight Madinah's pricing strength."
"Pilgrim arrivals in the city are expected to reach 30 million by 2030, up from 17.3 million in 2025, reflecting the city's growing role as a global hub for religious tourism," he added.-TradeArabia News Service
Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).
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