There are eight sectors that are expected to account for the majority of KSA’s economic growth into 2030. Travel, tourism, and hospitality is expected to account for 11% of total GDP growth in that time period. This part of the series will take a closer look at these sectors and their expected changes over time. The sectors’ growth will slow due to the 2020 pandemic, but they will likely remain a key growth area well into 2030. Even during the pandemic, domestic tourism is on the rise while international tourism has slowed.
Saudi Arabia is home to Makkah, the most holy Islamic religious site, in addition to several natural tourist locations such as beaches, mountains, and valleys. The Kingdom is taking active steps to make tourism and hospitality more accessible. This includes the privatization of certain tourism services and the preservation of important cultural and historic sites.
Rising International Tourism in the Kingdom
- International tourists have more than doubled in KSA since 2005; this is largely due to the easing of restrictions for tourist visas to enter the country
- 10 to 13 million Muslims visit the holy sites of Makkah and Medina every year, including more than two million during the annual Hajj pilgrimage period
- The Kingdom possesses a wealth of archaeological sites such as UNESCO world heritage site Madain Saleh and areas of natural beauty such as coasts and mountains; therefore,J&A sees opportunity for thriving profit driven tourism
Domestic Tourism Is a Large Opportunity for Growth
- Domestic tourism presents significant opportunity for economic growth, as locals prefer to vacation and travel outside the region
- The Ministry of Tourism launched the Saudi Summer campaign to encourage domestic tourism during the 2020 pandemic
- The Saudi Summer led to a $1.6B consumer spend, 26% more than the same period in2019
- As tourism sites become more developed, J&A expects domestic tourism spending to increase and compete with locations such as Dubai, UAE
In the next part of our series we will review steps the KSA government is taking to grow business lending and trade.