Saudi hospitality to outpace global growth, spurring investment: JLL

Trade Arabia

08-05-2025

Saudi Arabia's hospitality sector is expected to experience significant growth due to Vision 2030 and strategic tourism infrastructure investments, according to JLL's latest report. The MENA region has shown resilience, maintaining a 3% CAGR from 2019-2024.
The region's projected 4% CAGR from 2024 to 2028 is significantly outperforming the Americas, Europe, and Asia-Pacific.
Major development projects in Saudi Arabia are largely driving this growth. With approximately 160,000 quality hotel rooms in operation and an additional 106,000 in the pipeline, Saudi Arabia is expected to account for 58% of the total hotel supply in the MENA region by 2028.
The Kingdom's progress in transforming its tourism industry, driven by Vision 2030 and strategic infrastructure investments, has resulted in substantial growth in the sector.
The National Tourism Strategy, launched in 2016, has already exceeded its initial goals, with tourism contributing 11.5% to the GDP in 2023.
Since 2019, the MENA region has experienced the most substantial Revenue Per Available Room (RevPAR) growth globally (+28%), outpacing Europe (+25%), the Americas (+18%), and Asia Pacific (-12%).
Saudi Arabia's RevPAR has increased 9% annually since 2019, driving interest primarily from regional investors to date. Notably, international visitation growth is outpacing domestic at 14.4% to 13.7% since the launch of the tourist visa in 2019, with key cities like Riyadh and Madinah even outperforming established global tourism destinations.
Saud Al Sulaimani, Country Head of JLL KSA, said: 'Saudi Arabia's commitment to developing its tourism sector, coupled with its strategic investments and ambitious vision, is setting the country up to be a global leader in the hospitality industry. It has seen unprecedented hotel supply growth with Revenue Per Available Room in its major cities competing and often outperforming established hub and tourism centric cities across the world.
However, this report looks to show that this is just one segment of market opportunity available to global investors. The report highlights that Saudi Arabia's emerging destinations, for example, Taif and Al Ahsa, represent a new frontier for hospitality investment, offering a unique opportunity for first movers in these underserved markets. These promising cities, rich in cultural heritage and untapped potential, attract 23% of overall visitor numbers, translating to approximately 20 million visitors annually. However, quality supply in these cities remains limited, accounting for only 25-30% of the total, creating a significant gap for investors to capitalise on."