Saudi hospitality revenue to surge 7.5% by 2028

 

Saudi hospitality industry to play a bigger role in economy 

Saudi Arabia’s hospitality sector is poised for substantial growth, driven by economic initiatives and tourism expansion under Vision 2030. According to Alpen Capital’s latest report, the kingdom's hospitality revenue is projected to achieve a compound annual growth rate (CAGR) of 7.5% from 2023 to 2028.

Sameena Ahmed, Managing Director at Alpen Capital, highlighted, “The sector’s growth will be bolstered by economic recovery, thriving tourism, and governmental efforts to diversify revenue sources away from hydrocarbons.”

 

Read More       Neom to establish itself as a pioneer in the future of hospitality: Chris Newman

 

GCC Hospitality Sector Outlook

The GCC hospitality sector is expected to reach approximately $48.1 billion in revenue by 2028, growing at the same CAGR of 7.5%. This expansion is underpinned by economic development, rising tourist arrivals, and the hosting of major events, conferences, and exhibitions across the region.

Improving Operational Metrics

Key metrics such as occupancy rates, average daily rates (ADR), and revenue per available room (RevPAR) are forecasted to improve. Occupancy rates are expected to rise from 64.6% in 2023 to 69.3% in 2028, while ADR is projected to grow at a CAGR of 1.9%. RevPAR is anticipated to increase at a CAGR of 3.3% over the same period.

 

Read More       Saudi Arabia’s Dur hospitality becomes a member of UNWTO

 

GCC’s Global Tourism Footprint

The GCC continues to strengthen its global tourism footprint through successful hosting of major MICE (Meetings, Incentives, Conferences, and Exhibitions), cultural, and sporting events, attracting millions of tourists and stimulating hospitality sector growth.

Challenges and Sustainability

While the outlook is positive, challenges such as global economic uncertainties, geopolitical conflicts, inflation, and labor shortages pose risks. The sector is responding by embracing digitalization and sustainability practices to enhance guest experiences and meet the demand for responsible travel.

 

Read More       Red Sea Global appoints former senior executive of hotel chain as Group Head of Hospitality

 

Expansion Plans

Looking ahead, Saudi Arabia plans to add 320,000 new hotel rooms by 2030, with a focus on upscale and luxury categories to accommodate an expected surge in tourism. Riyadh’s winning bid to host the 2030 World Expo is expected to inject $94.6 billion into the economy, attracting 40 million visitors and necessitating substantial hospitality infrastructure development.

This ambitious growth trajectory underscores Saudi Arabia’s commitment to becoming a global tourism hub and diversifying its economy through Vision 2030 initiatives.

Source: https://economymiddleeast.com/