Saudi Arabia’s private sector has emerged as a key engine of growth in the Kingdom’s rapidly expanding tourism industry, with investments totaling SAR219 billion ($58.4 billion), officials said, highlighting its growing role in developing destinations and enhancing the market’s appeal.
Speaking at the fourth edition of the Future Investment Initiative conference in Miami, Saudi Tourism Minister Ahmed Al-Khateeb said the Kingdom offers a model of a market fully prepared to attract investment, stressing that private sector participation is central to this success.
“The role of the private sector and its active participation are fundamental pillars, contributing around 48 percent of total tourism investment,” he stated.
Private sector role
Mahmoud Abdulhadi, Deputy Minister of Tourism for Destination Enablement, told Asharq Al-Awsat that total committed investments in the sector have reached SAR452 billion, with the private sector contributing SAR219 billion ($58.4 billion) and the Public Investment Fund accounting for SAR233 billion ($62.1 billion), reflecting a strategic partnership to support sustainable growth.
He added that Saudi Arabia ranked fifth among G20 economies in 2024 in terms of investment intensity, with investments accounting for 30 percent of gross domestic product — among the highest rates globally.
Between 2019 and 2024, the Kingdom attracted 56 major tourism projects valued at $1.9 billion, he said.
Abdulhadi added that investors benefit from a broad range of incentives, including long-term tax exemptions for multinational companies, wage support for roles subject to Saudization policies, reductions and exemptions on municipal licensing fees, and financing for projects of all sizes through the Tourism Development Fund.
He noted that the private sector accounts for around 60 percent of new hotel rooms and is leading investment projects across 10 regions of the Kingdom. Saudi Arabia has attracted more than 50 international hotel brands and over 40 new investors since 2020.
Record figures for 2025
Saudi Arabia’s tourism sector recorded strong performance in 2025, with about 122 million domestic and international tourists — up 5 percent from the previous year — while total tourism spending reached SAR301 billion ($80.3 billion), a 6 percent increase year-on-year.
Domestic tourists accounted for 92.9 million visitors, spending SAR128.2 billion ($34.2 billion), while international arrivals reached 29.3 million, with spending of SAR172.6 billion ($46 billion). The Kingdom aims to attract 150 million tourists annually by 2030.
Future investment priorities
Abdulhadi said investment priorities for the next five years include expanding hospitality capacity, enhancing booking and tourism promotion platforms, and developing a diverse range of tourism experiences spanning coastal, urban, heritage and adventure offerings.
Additional focus will be placed on agritourism, tourism supply chains and logistics services, creating significant opportunities for private sector participation and supporting sustainable growth.
He explained that Saudi Arabia has introduced mechanisms to ensure the sustainable growth of tourism projects, including covering 15–20 percent of capital expenditure for private investments, municipal fee exemptions for up to seven years, corporate income tax exemptions for foreign investments over the same period, up to 100 percent reductions in value-added tax on hotel rooms, and full support for land lease costs for up to 20 years.
Supporting sustainable growth
Abdulhadi underlined that the adoption of the 2025 Saudi Investment Law allows full foreign ownership, strengthens investor protections and facilitates capital flows, further enhancing the investment climate alongside specialized training programs developed in partnership with universities and educational institutions.
“This integrated ecosystem, together with public-private partnerships, represents the foundation for achieving Vision 2030 targets,” he said, including raising tourism’s contribution to GDP to 10 percent and creating more than 1.6 million jobs.
