Tourism spending reaches SAR82.7 billion in Q1 as domestic travel, religious tourism, and Vision 2030 investments continue to reshape the Kingdom’s hospitality industry.
Saudi Arabia’s hospitality and tourism industry continues to demonstrate remarkable resilience in 2026, supported by strong domestic travel, year-round religious tourism, and one of the world’s largest hotel development pipelines. Although geopolitical uncertainty affected international travel during the first five months of the year, the Kingdom’s tourism sector maintained healthy growth, reinforcing its long-term Vision 2030 ambitions.
According to the latest industry data, tourism spending reached SAR82.7 billion during the first quarter of 2026, while total visitor numbers climbed to 37.2 million, representing an 8% year-on-year increase. The figures highlight Saudi Arabia’s evolving tourism landscape, where domestic tourism is increasingly supporting market stability while international visitors continue to generate significant economic value.
Domestic Tourism Emerges as the Industry’s Growth Engine
One of the biggest trends shaping Saudi Arabia’s tourism sector is the rapid growth of domestic travel.
Between January and March 2026, nearly 29 million domestic tourists travelled across the Kingdom, accounting for approximately 78% of all visitors during the first quarter. Domestic tourism grew by 16% compared with the same period last year, helping compensate for softer international arrivals.
Inbound visitor numbers declined to 8.3 million, reflecting the impact of geopolitical uncertainty across the region. However, despite representing only around one-fifth of total visitors, international tourists generated almost 60% of total tourism spending.
Foreign visitors contributed approximately SAR48 billion to the Saudi economy during Q1, while domestic tourists spent SAR34.7 billion, demonstrating that international travellers continue to deliver higher average spending per trip.
Tourism Spending Continues to Reach New Heights
Saudi Arabia’s tourism transformation under Vision 2030 continues translating into impressive economic performance.
Overall visitor expenditure reached SAR82.7 billion during the first quarter of 2026, reflecting sustained demand across religious, leisure, entertainment and business travel.
Although overseas arrivals declined compared with last year, total spending from international visitors decreased only slightly, indicating that visitors are staying longer, spending more, or choosing higher-value travel experiences.
This trend supports Saudi Arabia’s strategy of attracting premium tourism while simultaneously expanding mass-market tourism offerings.
Religious Tourism Keeps Hotel Performance Strong
Religious tourism remains the backbone of Saudi Arabia’s hospitality industry.
The holy cities of Makkah and Madinah continued to outperform every major tourism destination in the Kingdom during the first five months of 2026.
Hotels in Makkah recorded occupancy levels approaching 84% in January, while year-to-date occupancy remained around 73%, representing a 12% increase compared with the previous year.
Madinah also maintained exceptionally strong performance, reaching nearly 85% occupancy in January before stabilising around 76% during the first five months of the year.
Demand generated by Umrah, Ramadan and Hajj continues to provide a consistent stream of visitors, helping hotels maintain strong occupancy levels even during periods of weaker international leisure travel.
Continued investment in pilgrimage infrastructure, airport expansion, transport networks and hotel development is expected to strengthen both cities even further over the coming years.
Hotel Room Rates Continue to Increase
While occupancy moderated slightly during spring, hotel pricing remained strong across Saudi Arabia.
National occupancy started the year close to 75% in January before easing to approximately 63% year-to-date by May.
Despite this slight decline, hotels successfully increased average room prices.
The national Average Daily Rate (ADR) rose from SAR662 in January to approximately SAR825 by May, representing an annual increase of around 12%.
Performance varied considerably between cities.
Makkah achieved the strongest pricing growth, with ADR rising to SAR918, an increase of 24%.
Madinah followed with ADR reaching SAR878, up 5.7%.
Meanwhile, business-focused destinations experienced softer performance. Riyadh’s ADR declined approximately 6% to SAR771, while Jeddah fell around 7% to SAR635.
These figures demonstrate how pilgrimage destinations continue outperforming traditional business travel markets.
Saudi Arabia Expands One of the World’s Largest Hotel Pipelines
Saudi Arabia continues investing heavily in hospitality infrastructure as part of its Vision 2030 transformation.
The Kingdom currently offers more than 176,000 hotel rooms, including:
- 64,330 rooms in Makkah
- 28,000 rooms in Riyadh
- 22,115 rooms in Madinah
- 16,080 rooms in Jeddah
- 8,580 rooms in Al Khobar
- 4,465 rooms in Dammam
Approximately two-thirds of Saudi Arabia’s existing hotel inventory consists of upscale and luxury accommodation, reflecting the country’s focus on premium tourism experiences.
However, future developments are expected to include a broader mix of luxury, midscale and lifestyle hotels to accommodate growing visitor demand.
More Than 105,000 Hotel Rooms Planned by 2030
Saudi Arabia’s hospitality pipeline remains one of the largest globally.
More than 105,500 additional hotel rooms across 382 hotel projects are expected to be completed by 2030, significantly increasing the Kingdom’s accommodation capacity.
During 2026 alone, approximately 18,150 new hotel rooms are scheduled to enter the market.
Nearly 40% of this year’s new hotel supply will be concentrated in Makkah and Madinah, while Riyadh, Jeddah and Al Khobar will also receive thousands of additional rooms.
Emerging destinations such as Dammam are also preparing for rapid expansion, with nearly 2,000 additional hotel rooms expected between 2027 and 2029.
Vision 2030 Continues to Transform Saudi Tourism
Saudi Arabia’s hospitality growth remains closely aligned with the government’s ambitious Vision 2030 strategy.
The Kingdom aims to welcome 150 million domestic and international visitors annually by 2030, supported by massive investments in infrastructure, transport, entertainment, culture, sports and tourism.
Major giga-projects including NEOM, The Red Sea, Diriyah, Qiddiya and AMAALA continue attracting international hotel brands and investors.
Upcoming mega-events are expected to further accelerate tourism demand, including:
- Riyadh Expo 2030
- FIFA World Cup 2034
Together, these global events are expected to attract more than 42 million visitors, creating significant opportunities for hotels, airlines, restaurants, retail businesses and tourism operators.
Long-Term Outlook Remains Positive
Despite temporary geopolitical uncertainty affecting international travel, Saudi Arabia’s tourism industry remains on a strong long-term growth trajectory.
Growing domestic tourism, expanding religious travel, record levels of hotel development and continued government investment are creating a diversified hospitality market capable of supporting sustainable growth.
As thousands of new hotel rooms open across the Kingdom and international tourism continues recovering, Saudi Arabia is steadily positioning itself among the world’s fastest-growing hospitality destinations.
With Vision 2030 entering its final phase of implementation, the Kingdom is no longer viewed solely as a religious tourism destination but increasingly as a global hub for leisure, entertainment, business events and luxury travel.
Sources
- Cavendish Maxwell – Saudi Arabia Hospitality and Tourism Snapshot (January–May 2026)
- Saudi Vision 2030 – Tourism & Hospitality Development Initiatives
