Saudi Arabia’s Tourism Ambitions: Trends, Opportunities, and Strategic Challenges

Saudi Arabia’s tourism sector is undergoing depth transformations under Vision 2030, expanding from religious tourism to luxury, eco, and cultural experiences through massive infrastructure and regulatory reforms. While offering significant investment opportunities, entry requires navigating complex regulations, forming local partnerships, and aligning with long-term national goals. 

Saudi Arabia’s tourism development has significantly evolved under Vision 2030, shifting from a traditional focus on religious tourism to a more diversified strategy. Initially centered on Mecca and Medina, religious tourism laid the groundwork for the industry but revealed limitations due to its seasonal nature and narrow demographic appeal. Recognizing the need for diversification, the Kingdom expanded into cultural tourism, leveraging its rich heritage to attract a broader audience. 

More recently, Saudi Arabia has embraced eco-tourism and luxury tourism. Eco-tourism initiatives promote sustainability and conservation, though challenges remain in integrating local communities. Luxury projects like NEOM and the Red Sea Project aim to attract high-end tourists and boost economic diversification. 

Cultural and entertainment initiatives, such as festivals, art exhibitions, and concerts, are reshaping the Kingdom’s image globally. These efforts are supported by major infrastructure investments and digital tools, including improved transportation networks and streamlined visa services. Innovative offerings like adventure tourism and wellness retreats further expand market appeal, supporting economic diversification and international engagement. Overall, Saudi Arabia is positioning itself as a dynamic, multifaceted global tourism destination. 

Saudi Arabia’s new tourism strategy 

In recent years, the Kingdom has undergone a profound shift from an oil-dependent economy to a diversified model, with tourism as a key driver. At the heart of this transformation is an ambitious goal: attracting 150 million annual visitors by 2030, a significant leap from the 30 million achieved in 2024. This target is central to Vision 2030, which seeks to establish Saudi Arabia as a global leader in sustainable, innovative tourism.  

One notable initiative is TOURISE, a global platform bringing together key players from across the tourism sector. This article explores current tourism trends and future opportunities for foreign investment. 

In particular, Saudi Arabia’s new tourism strategy is built around six core objectives. These nclude, among others:  

• Enhancing government efficiency;  

• Promoting national identity through heritage and religious sites; and  

• Diversifying the economy by attracting foreign investment.  

Emerging trends in Saudi Arabia’s tourism sectors 

Luxury and heritage tourism 

Projects like AlUla, Diriyah Gate, and NEOM anchor Saudi Arabia’s luxury and heritage tourism ambitions. Specifically: 

• AlUla offers a blend of Nabatean archaeological sites and luxury hospitality. The “Journey Through Time” masterplan is a US$15 billion public-private initiative expected to add 38,000 jobs and contribute US$$32 billion to GDP by 2035. Key developments include a 250-room Marriott hotel (2025) and a Six Senses resort (2027). 

• Diriyah Gate aims to transform the birthplace of the First Saudi State into a global cultural and lifestyle destination. 

• NEOM, a US$1.5 trillion megacity, exemplifies future-facing development. Its Sindalah Island resort will feature 51 luxury retail outlets, 38 restaurants, a golf course, and a marina for superyachts. Costing nearly US$4 billion, it will create 3,500 jobs and host up to 2,400 daily visitors by 2028. 

Eco-tourism and adventure travel 

The Red Sea Project, led by Red Sea Global, is set to deliver 50 luxury hotels across 22 islands by 2030. Spanning 28,000 km², the project blends desert, coast, and volcanic landscapes in a regenerative tourism model. 

Another flagship destination is the Soudah Peaks in the Asir region. Covering 627 km² at elevations up to 3,015 meters, this project aims to boost eco-tourism and adventure travel. It will feature six zones (Tahlal, Sahab, Sabrah, Jareen, Rijal, Red Rock) offering hiking, cycling, paragliding, and wellness retreats. With an estimated US$7.7 billion investment, it’s expected to create 10,700 jobs and contribute US$7.8 billion to GDP by 2033.Religious tourism  

As the birthplace of Islam, Saudi Arabia is a global hub for religious tourism. The government is working to accommodate 30 million pilgrims by 2030, up from 24.7 million Umrah pilgrims currently. Key developments include: 

• Grand Mosque Expansion in Mecca: This expansion now allows over 2.5 million worshippers to gather simultaneously, enhancing infrastructure, safety, and spiritual experience. 

• The Pilgrim Experience Program (PEP) aims to improve pilgrim logistics, including upgraded airports, roads, hotels, and public transport systems. 

• In Medina, the Rua Al Madinah project will add 47,000 hospitality units by 2030 and create 93,000 jobs, enhancing the visitor experience near the Prophet’s Mosque. 

MICE tourism  

Saudi Arabia is also targeting the MICE (Meetings, Incentives, Conferences, Exhibitions) sector to become a regional business hub. Major venues include: 

• Riyadh Front Exhibition & Convention Centre; and 

• King Abdulaziz International Conference Centre in Jeddah.

These offer world-class AV systems, modular meeting spaces, and luxury amenities. The government aims to raise MICE’s GDP contribution from 3.8 percentto 8.8 percent by 2030. 

Recent milestones include: 

• IMS24 (International MICE Summit 2024) in Riyadh; 

• Announcement of 19 major international events for 2025; and 

• Strategic partnerships with global event organizers and the opening of regional offices. 

Barriers to entry for foreign investment 

Religious tourism regulations 

Religious tourism is tightly regulated. The Ministry of Hajj and Umrah oversees all aspects, including: 

• Visa issuance; 

• Accommodation standards; and 

• Transportation logistics. 

Only approved operators may offer Hajj or Umrah packages, and licenses are limited and highly competitive. Foreign entrants must either partner with local firms or undergo rigorous licensing processes, limiting direct market access despite high demand. 

 Land ownership restrictions 

Foreign land ownership is generally prohibited in Mecca and Medina. In other regions, foreign investors may: 

• Acquire land via long-term leases, not freehold; 

• Face minimum investment thresholds (for example, US$13 million for commercial property); and 

• Be required to submit detailed five-year investment plans. 

 These requirements create entry barriers, especially for smaller investors unfamiliar with local processes. 

Long-term investment commitment  

Mega-projects like NEOM demand high capital, extended timelines, and deep collaboration with Saudi authorities. Minister of Investment Khalid bin Abdulaziz Al-Falih clarified that NEOM is not a short-term opportunity, calling it a “generational investment”. 

Foreign firms must prepare for intensive due diligence and alignment with Vision 2030’s long-term goals, limiting access for short-term investors. 

Government ecosystem 

Key players: 

Saudi Arabia’s tourism ecosystem is shaped by a network of government and semi-autonomous bodies: 

• Ministry of Tourism: Issues licenses, sets regulatory frameworks, and coordinates policy direction. 

• Saudi Tourism Authority (STA): Handles global tourism marketing and promotional campaigns. 

• Public Investment Fund (PIF): Finances giga-projects (NEOM, Red Sea Project, AMAALA), driving Vision 2030 through capital injection and strategic oversight.

Other key institutions include: 

• Royal Commission for AlUla 

• Diriyah Gate Development Authority 

• Red Sea Global 

These bodies manage the planning, preservation, and development of high-value cultural and natural destinations. 

Forms of support for investors 

Tax incentives 

Saudi Arabia offers generous tax relief, particularly under the Regional Headquarters (RHQ) Programme, which includes: 

• A 30-year corporate tax holiday for multinationals establishing RHQs in the Kingdom; and 

• Starting in 2025, a VAT refund scheme for tourists on eligible purchases, aiming to boost spending and attract global visitors. 

Public-Private Partnerships (PPPs) 

PPPs are integral to Vision 2030, facilitating collaboration between public agencies and private investors. The National Center for Privatization & PPP (NCP) oversees a pipeline of 200+ approved projects across 17 sectors as of 2023. 

Notable examples include: 

• Healthcare: Over 420 international companies applied to build long-term care hospitals in partnership with the Ministry of Health and NCP; and 

• Transport, housing, and water projects: Actively inviting global partners to co-develop infrastructure. 

The legal framework ensures transparency, risk mitigation, and strong alignment with strategic objectives. 

Access to Sovereign Wealth Fund co-financing 

The Public Investment Fund (PIF) is a central enabler of tourism growth: 

• With over US$925 billion in assets, the PIF co-finances major projects and offers investors capital support and strategic alignment. 

• Recently secured a US$7 billion credit facility from 20 international banks to support project financing. 

Projects under PIF’s portfolio—NEOM, AMAALA, and the Red Sea Project—offer scalable opportunities for co-investment in tourism, infrastructure, sustainability, and technology. 

Risks for new entrants 

Although Saudi Arabia has undertaken significant legal reforms under Vision 2030, many regulatory frameworks—especially those governing foreign investment, licensing, and land use—remain in flux. This creates a level of uncertainty for new entrants attempting to navigate rules that may lack transparency or consistency across regions. For instance, zoning laws, environmental regulations, and requirements for joint ventures can vary depending on the project or location, making it difficult for investors to anticipate compliance costs or approval timelines. 

Additionally, some of the Kingdom’s most ambitious tourism developments, like NEOM and the Red Sea Project, involve custom-built legal frameworks that may not yet be fully implemented or tested in practice. This creates a risk that interpretations of regulatory compliance may shift over time. While the Saudi Arabian General Investment Authority (SAGIA, now part of the Ministry of Investment) has created tools to support investors, such as licensing portals and investor guides, the evolving nature of these reforms means newcomers may still face bureaucratic delays or unclear application processes. 

Skills gap 

Saudi Arabia’s rapid expansion of its tourism sector has created a demand for hospitality workers and tourism professionals that currently outpaces local supply. Despite initiatives like the Human Capability Development Program under Vision 2030, there remains a notable shortage of trained Saudi nationals in key service roles, especially in customer service, hotel management, and culinary arts. As a result, many firms rely heavily on immigrant labour, which brings its own challenges in terms of recruitment, visa processing, and localization policies. 

The government has introduced “Saudization” policies (Nitaqat system) requiring companies to hire a minimum quota of Saudi citizens. While these policies aim to improve local employment, they can create operational difficulties for companies in sectors where the domestic talent pipeline is underdeveloped. For example, luxury hotels and eco-tourism operators have struggled to find locally trained staff for multilingual guest services and specialized adventure tourism roles. 

Saudi Arabia stands at a pivotal moment in its economic transformation, with tourism positioned as a central pillar of Vision 2030. For forward-looking investors, the Kingdom offers a wealth of opportunities across hospitality, transport, entertainment, cultural heritage, and smart tourism technologies. From megaprojects like NEOM and The Red Sea to heritage-driven initiatives in Diriyah and AlUla, the breadth of opportunity caters to a range of investor profiles—from multinational infrastructure firms to boutique hospitality brands. 

However, successful market entry in Saudi Arabia depends heavily on forging strategic partnerships. This includes joint ventures with local developers, partnerships with government bodies like the Saudi Tourism Authority (STA), or collaborations with semi-autonomous project-specific entities such as Red Sea Global and the Diriyah Gate Development Authority. 

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