Case Study: The Tourism Sector in Saudi Arabia
- Aman Zaid
- Jul 4
- 4 min read
Updated: Jul 28
Recent reports indicate that the tourism sector in the Kingdom of Saudi Arabia is experiencing remarkable growth in alignment with Vision 2030. Tourism revenues are projected to rise by 148% in 2024 compared to 2019, contributing 5% to the country's GDP. Furthermore, the Kingdom is expected to welcome 116 million visitors in 2024 alone.
The Tourism Market in Saudi Arabia
The World Travel & Tourism Council's 2024 Economic Impact Report revealed that the tourism market has experienced unprecedented expansion, contributing more than SAR 400 billion, or 11.5% of the national GDP, in 2023. The total number of visitors is projected to increase from 64.7 million in 2019 to 116 million in 2024, marking a 79% growth.
This increase is a reflection of advancements supported by Vision 2030, which include improvements in visa processing, infrastructure development, and streamlined regulations. The Tourism Development Fund has allocated SAR 16 billion to support 23 major projects, demonstrating the government's commitment to expanding the Kingdom's tourism sector.
Market Segmentation and Diversification
Reports indicate that the development of the tourism market in Saudi Arabia includes various sectors, such as:
Religious Tourism: This sector is of great importance to the Kingdom, representing 41% of inbound visits in 2024.
Leisure Tourism: Currently, leisure tourism accounts for 59% of inbound visits. This sector has been boosted by mega-projects such as NEOM, the Red Sea Project, and cultural initiatives in AlUla.
Business Tourism: Corporate and government travel grew by 27% in the second quarter of 2022, reaching SAR 600 million visitors. Major international conferences and events have solidified Saudi Arabia's position as a regional business hub.
Ecotourism and Adventure Tourism: Although relatively new to Saudi Arabia, this type of tourism has provided unique experiences for environmentally conscious travelers, ranging from desert explorations to diving in the Red Sea.
Consumer Behavior in the Saudi Tourism Sector
A study conducted by Adel Ghoneim and Abdul Rahim Awad on tourism strategies in Saudi Arabia highlights that the Vision 2030 initiative has stimulated investment in tourism, making digital strategies a crucial factor in attracting both domestic and international visitors. Foreign tourists are showing significant interest in cultural heritage sites, such as AlUla, the Old City of Jeddah, and other UNESCO World Heritage sites. Tourism spending increased by 27.25% in the third quarter of 2024, reaching SAR 25.5 billion. Hani Attia Allah Al-Youbi, in his research on the future potential of tourism in Saudi Arabia, adds that a safe environment is the primary consideration for 96% of potential visitors, followed closely by natural attractions at 92%.
How Does Digital Marketing Impact Consumer Behavior in the Saudi Tourism Sector?
In 2020, to celebrate Saudi National Day on September 23, Spirit of Saudi Arabia launched a Twitter campaign to showcase the Kingdom’s diverse travel destinations and rich history, encouraging people to express their national pride. The campaign began with a video created using user-generated content from Visit Saudi's previous summer campaign, "Tanfas." This was accompanied by the hashtag #LuckySaudis, which spurred the creation of a campaign emoji. The campaign generated 63 million impressions, 11 million video views, and 900,000 interactions, successfully promoting domestic tourism during the COVID-19 pandemic.
Investment Opportunities in the Saudi Tourism Sector
Saudi Arabia is currently undergoing an unprecedented boom in tourism investment, supported by the Tourism Investment Empowerment Program (TIEP), which aims to attract investments totaling SAR 42 billion. Key opportunities are emerging in several areas, including:
Hospitality Infrastructure: The goal is to develop over 320,000 new hotel rooms by 2030, with investments estimated at $37.8 billion.
Leisure and Cultural Tourism: Mega-projects such as NEOM, the Red Sea project, AlUla, and Qiddiya represent unique destinations that blend luxury, culture, and entertainment.
Digital Innovation: This involves supporting technologies like artificial intelligence, virtual reality, and sustainable tourism as part of the sector's digital transformation strategy.
Incentives Available:
Funding exceeding SAR 100 million from the Tourism Development Fund.
Regulatory reforms that reduce licensing periods to five days and ease land acquisition processes.
Facilitation of foreign investment through the e-Visa and Investor Visitor Visa programs.
According to Asharq Al-Awsat, by 2030, the tourism sector is expected to contribute 10% of the GDP and create over 120,000 jobs, reflecting tourism's potential as one of the Kingdom's strongest growth drivers.
How SteadyPeace Consultancy is Transforming Visitor Experience Measurement
At SteadyPeace Consultancy, we believe that a deep understanding of visitors is essential to creating exceptional tourism experiences. We serve as your tourism consulting partner, specializing in market research that enhances our knowledge of visitor behavior and expectations, while also measuring the impact of various initiatives to ensure optimal outcomes.
We provide our tourism partners with integrated solutions to help them:
Understand Visitor Behavior: Conduct field studies and precise research to gauge market trends and visitor preferences, both locally and internationally.
Improve Visitor Experiences: Design and develop innovative tourism experiences that meet and exceed visitor expectations.
Measure the Impact of Initiatives: Evaluate the economic and social effects of projects and initiatives on local communities and visitors alike.
Our Consulting Solutions:
We offer a comprehensive range of research and consulting services, including:
In-depth visitor experience studies.
Testing of new concepts and experiences.
Awareness and impression analysis.
Marketing campaign evaluation.
Transparent, trustworthy, and actionable recommendations.
In conclusion, the tourism sector in Saudi Arabia presents immense opportunities for economic diversification and for showcasing its rich cultural heritage to the world. Through smart investments, technological innovation, and sustainable development, this sector is steadily progressing towards the ambitious goals of Vision 2030, emerging as a new global model for tourism growth.
