MENA Tourism and Hospitality Industry 2025: Regional Growth, Investment Hotspots, and Market Outlook

The Middle East and North Africa (MENA) region is undergoing a tourism and hospitality renaissance, driven by ambitious national strategies, record-level infrastructure investments, and a sustained post-pandemic recovery. In 2025, the sector stands as one of the key pillars of economic diversification, attracting unprecedented levels of capital from both public and private sources.

Across the Gulf and North Africa, governments are repositioning tourism as a long-term growth engine. Mega-projects in Saudi Arabia, cultural and event-driven tourism in the UAE and Qatar, and revitalized heritage initiatives in Egypt and Morocco are reshaping the region’s global appeal. Meanwhile, smaller markets such as Oman and Tunisia are leveraging sustainable development and policy reforms to capture emerging traveler segments and foreign investment.

MENA’s tourism and hospitality market trends

The Middle East and North Africa (MENA) tourism sector has rebounded strongly post-pandemic. In 2025 the industry is projected to generate roughly US$367 billion in regional GDP and support 7.7 million jobs, with international visitor spending approaching US$194 billion (about 24 percent above 2019 levels).

Major GCC markets account for most growth: for example, Saudi Arabia saw a record 27.4 million arrivals in 2023 (58 percent for leisure) and is on track to contribute over 10 percent of GDP to tourism in 2025. Hotel development is also surging: by the first half 2025 the MENA pipeline hit a record 650 projects (161,574 rooms).

Saudi Arabia leads with about 92,000 rooms under development, followed by Egypt (28,000), the UAE (25,470), Oman (4,709) and Qatar (3,500).

This unprecedented investment reflects governments’ determined Vision 2030-type agendas: Saudi aims for 150 million visitors by 2030, Egypt for 30 million by 2028, and others have set similarly ambitious targets.

Country-by-country overview

United Arab Emirates

The UAE remains a regional tourism powerhouse. Dubai led with almost 12.5 million international visitors in the first eight months of 2025 (a five percent annual increase), and is on track for about 19.5 million by year-end. Dubai added roughly 5,000 hotel rooms (19 new hotels) by end-2025, bringing the emirate’s stock to 152,300 rooms across 818 properties.

Premium segments continue to dominate the UAE’s hospitality landscape, with five- and four-star hotels accounting for 64 percent of total supply. In the first half of 2025, the market demonstrated remarkable resilience: average occupancy reached 78.5 percent, up three percentage points year-on-year, while the average daily rate (ADR) rose by 4.6 percent to AED 526 (approximately US$143).

These figures reflect the enduring appeal of the UAE’s diversified tourism offering, supported by world-class infrastructure, effective destination marketing, and continuous investment in cultural and entertainment assets.

Looking ahead, the UAE’s Tourism Strategy 2031 sets an ambitious target of 55 million visitors by 2030, positioning the country as a year-round global destination. Landmark attractions such as the Louvre Abu Dhabi, the Museum of the Future, Dubai Parks’ new Aladdin-themed expansion, and major international events (from Formula 1 to the FIM World Championship) are central to this vision.

Meanwhile, pro-investment policies, including multi-year Golden Visas and streamlined visa procedures, continue to strengthen the UAE’s competitiveness. Reflecting these dynamics, hotels nationwide generatedAED 26 billion (US$7.1 billion) in revenue during the first half of 2025, achieving an impressive 80.5 percent occupancy rate—a clear indication of robust and sustained demand across the Emirates.

Saudi Arabia

Saudi Arabia has undertaken a sweeping transformation of its tourism sector under Vision 2030, positioning the Kingdom as one of the fastest-growing global destinations. In the first quarter of 2025, the country’s hotel occupancy reached 63 percent (up from 60.9 percent year-on-year), driven by strong leisure demand, high pilgrimage volumes, and a surge in event-driven travel.

The government has committed over US$1 trillion in tourism infrastructure and attractions, with mega-projects such as NEOM, The Red Sea Project, Diriyah, and Qiddiya redefining the national landscape. By 2030, Saudi Arabia aims to attract 150 million visitors annually and raise the tourism sector’s contribution to GDP to 10 percent.

Key highlights shaping Saudi Arabia’s tourism growth include:

• Largest hotel pipeline globally: Approximately 92,000 rooms across 342 projects, reflecting unprecedented development momentum.
• Mega-events and global visibility: Hosting the 2034 FIFA World Cup and Expo 2030 will further elevate Saudi Arabia’s international profile.
• Regulatory reforms: Introduction of e-visas for 60+ countries, plans for a unified GCC visa, and the 2026 foreign property ownership framework are increasing investor confidence and accessibility.
• Employment and spending: As of Q1 2025, tourism employment exceeded 983,000 (up 4.1 percent year-on-year), while international visitor spending rose 10 percent to SAR 49.4 billion (US$13.2 billion).
• Investment-driven innovation: Luxury resorts along the Red Sea, heritage developments in AlUla, and sustainable desert destinations are drawing leading global hotel brands and operators.

Through a combination of policy liberalization, large-scale capital deployment, and strategic marketing, Saudi Arabia is transitioning from an oil-dependent economy to a diversified global tourism hub, setting a benchmark for investment potential in the region.

Qatar

Qatar continues to capitalize on the momentum generated by the FIFA World Cup 2022, positioning itself as a high-value destination for sports, culture, and business tourism. In the first half of 2025, the country welcomed2.6 million international visitors, marking a 3 percent year-on-year increase. Roughly 36 percent of arrivals came from GCC countries, while Europe, Asia, and North America also showed strong growth—demonstrating Qatar’s expanding global reach.

Hotel performance has remained solid, with average occupancy reaching 71 percent in early 2025 (a two-point increase year-on-year) and 5.23 million room-nights sold, representing a 7 percent rise over the same period. New supply continues to enter the market as developers prepare for major upcoming events, particularly Expo 2030 in Doha, which is driving another wave of high-end hotel and mixed-use construction.

Key enablers of Qatar’s tourism growth include:

• Visa liberalization: The country now offers visa-free or visa-on-arrival access to over 95 nationalities, making it one of the most open destinations in the region.
• Infrastructure expansion: The Khalifa Port cruise terminal and continued development of Hamad International Airport have significantly boosted inbound capacity and connectivity.
• Strategic promotion: Under the Qatar Tourism 2030 strategy, authorities are investing heavily in global marketing and sector diversification, with a focus on MICE (Meetings, Incentives, Conferences, and Exhibitions), sports, and cultural tourism.
• Event-driven development: Qatar’s ongoing calendar of sports tournaments, art exhibitions, and business conventions sustains steady visitor flows and underpins hotel demand throughout the year.

Oman

Oman is rapidly emerging as one of the rising stars of MENA tourism, combining natural beauty, cultural authenticity, and strategic policy support to position itself as a premium yet accessible destination. In the first half of 2025, the country recorded 1.14 million tourist arrivals, an 18 percent year-on-year increase, while hotel revenues in the three- to five-star segment reached OMR 141.2 million (approximately US$367 million), a clear sign of post-pandemic recovery and growing international appeal.

Under Vision 2040, the government aims to increase tourism’s contribution to GDP to 10 percent by 2040 (from 5 percent by 2030). To achieve this, authorities have outlined an ambitious investment roadmap of US$31 billion, including US$5.9 billion earmarked for new resorts and supporting infrastructure. Over 40 new hotels, spanning luxury and boutique categories, are currently under construction, signaling strong investor confidence and long-term potential.

Egypt

Egypt’s tourism industry is experiencing a robust rebound, supported by renewed stability, major infrastructure upgrades, and policy reforms aimed at expanding the sector’s global competitiveness. In FY 2023/24, international arrivals reached 14.9 million (a 7.2 percent increase year-on-year) while tourism revenues rose to US$14.4 billion, marking a 34.6 percent surge.

Looking ahead, Fitch Solutions projects 17.76 million visitors by the end of 2025, increasing to 18.56 million in 2026, signaling sustained momentum in one of North Africa’s most dynamic tourism markets.

Currently, tourism contributes around 3.7 percent of GDP (FY 2024/25), but policymakers have set an ambitious target to raise this share to 15 percent through aggressive investment and diversification initiatives. Growth is underpinned by an expanding hotel inventory, particularly along the Red Sea, Sinai Peninsula, and Mediterranean coast, where international brands are accelerating development.

Morocco and emerging markets

Morocco remains the undisputed tourism leader in North Africa. In the first half of 2025, tourism revenuesreached MAD 54 billion (US$5.5 billion), a 9.6 percent year-on-year increase, supported by a 19 percent surge in international arrivals. The country attracts roughly 10 million visitors annually, primarily from Europe, and continues to expand its offerings under the government’s Vision 2020 and the new Tourism Roadmap 2023–2026. These initiatives prioritize diversification through eco-tourism in the Atlas Mountains, film and cultural tourism, and the development of luxury coastal resorts.

Flagship programs such as “Go Siya7a”, which nurtures tourism-focused startups, and a “Project Bank” of over 900 ready-to-invest opportunities are helping channel private capital into high-value segments, including hotels, theme parks, and heritage attractions. Incentives like tax breaks and streamlined licensing procedures further enhance the investment climate.

Owing to its political stability, cultural richness, and competitive pricing, Morocco continues to outperform regional peers and was ranked the top-performing destination in Africa and the Middle East in the first half of 2025.

Beyond Morocco, smaller North African markets are staging a recovery. Tunisia is rebounding steadily, recording 9.7 million arrivals in 2024 and on track to reach 11 million in 2025, supported by reforms under the New Tourism Code, including tax relief, hotel renovation subsidies, and a national development fund. Tourism now contributes about 9 percent of GDP and sustains 400,000 jobs.

Government incentives and strategic enablers

Across the MENA region, governments are actively reshaping their investment ecosystems to attract foreign participation in the tourism and hospitality industry. These initiatives combine financial incentives, regulatory reforms, and strategic partnerships designed to make market entry easier and returns more competitive.

• Financing programs: Egypt, for instance, has launched a EGP 50 billion (US$1.05 billion) hotel financing initiative running through 2026, offering subsidized interest rates to stimulate hotel construction and renovation. At the same time, Gulf sovereign wealth funds are co-investing in large-scale resort and mixed-use developments, ensuring steady liquidity for investors entering the sector.
• Land and development zones: Dedicated tourism zones in Saudi Arabia (such as Red Sea, AlUla, and Qiddiya) now permit 100 percent foreign ownership and provide access to reduced land acquisition costs. Similarly, Oman’s Duqm and Al-Sawadi special economic zones offer long-term land leases and duty exemptions for hospitality projects, enhancing cost efficiency and long-term investment viability.
• Visa and regulatory reforms: Simplified travel and residency frameworks are another major driver of investment appeal. Saudi Arabia’s e-visa system and forthcoming Foreign Property Ownership Policy(2026), alongside theUAE’s long-term Golden Visa and Qatar’s visa-free access for over 95 nationalities, collectively strengthen mobility for investors and increase the region’s accessibility to global talent and visitors.
• Tax and PPP frameworks: Several jurisdictions now provide tax holidays, customs exemptions, and flexible public–private partnership models to attract international developers. Abu Dhabi’s hospitality masterplan, for example, includes numerous PPP ventures between global hotel operators and government-linked entities, demonstrating a mature collaboration model that balances state oversight with private sector innovation.
• Marketing and strategic partnerships: Finally, regional tourism boards, from the UAE and Saudi Arabia to Qatar and Morocco, are intensifying global outreach through partnerships with airlines, digital platforms, and travel operators. These initiatives expand source markets and visibility, while investors can leverage government-backed marketing campaigns and international trade events such as Arabian Travel Market (ATM) and ITB Middle East to strengthen brand exposure and networking opportunities.

Opportunities for foreign businesses and investors

For foreign businesses and investors, the outlook remains highly favorable. Mega-events such as the Dubai Expo legacy, the upcoming Riyadh Expo 2030, and the FIFA World Cups of 2022 and 2034 are transforming the MENA region into a global tourism and investment hub. The regional hospitality market is projected to expand from US$310 billion in 2025 to US$487 billion by 2032, supported by large-scale infrastructure rollouts and diversified tourism strategies.

Governments across the region are broadening their tourism portfolios, from ultra-luxury desert resorts and heritage hotels to adventure, wellness, and cultural experiences, allowing operators to tap into a wider range of traveler segments and spending behaviors.

Performance indicators remain robust: Dubai’s hotel occupancy reached approximately 81 percent in the first half of 2025, with an average daily rate of US$159, signaling sustained profitability and strong demand fundamentals.

At the same time, liquidity across the sector is accelerating as high-net-worth individuals, sovereign wealth funds, and institutional investors increase allocations to mixed-use resorts, branded residences, urban hospitality assets, and large-scale tourism infrastructure. This influx of capital underscores rising confidence in the sector’s medium-term growth trajectory and its alignment with national diversification agendas.

In brief

Overall, the MENA tourism and hospitality sector in 2025 is characterized by rapid expansion and diversification. Governments are opening doors and underwriting growth, while a young, experience-hungry population and rising global interest drive demand.

For investors and businesses, this translates into strong market potential: pipeline projects and high occupancy/ADR levels suggest robust returns. Coupled with generous state support (financing, land, visas) and a push to diversify economies away from oil, MENA’s tourism scene is at an inflection point – poised to cement the region’s status as a premier global destination.