Saudi Arabia smells its new oil in tourism, foreign tourists’ spending up by 57%

Tourism has become a cornerstone of Crown Prince Mohammed bin Salman’s multi-trillion-dollar strategy to diversify Saudi Arabia’s economy away from oil dependency.

There’s a good reason for it. Since opening its borders to leisure tourists in 2019 — and weathering the pandemic-induced decline — Saudi Arabia’s tourism sector has soared.

According to the World Travel & Tourism Council, tourism accounted for a record 11.5 per cent of the kingdom’s GDP last year, with international visitors’ spending up nearly 57 per cent year-over-year. Tourism could be Saudi Arabia’s “new oil,” especially as the world moves towards renewable energy.

Central to this tourism momentum is Asfar, a tourism investment startup backed by Saudi Arabia’s sovereign wealth fund. The company is spearheading hotel and entertainment projects in tier-two cities across the kingdom.

Asfar’s first developments are expected by the end of the year in Al Bahah, a mountainous region in the southwest, and Yanbu, a port city on the Red Sea coast, Bloomberg cited Chief Executive Officer Fahad Bin Mushayt as saying in an interview.

These projects, along with others in nearly half a dozen lesser-known areas, aim to add 2,000 hotel rooms and attract five million new tourists by 2030.

The government plans to spend almost $1 trillion on tourism, with a goal of hosting 150 million tourists annually by 2030. Massive investments in entertainment, sports, and cultural events have helped fuel this surge in tourism spending, attracting both citizens and international visitors.

Much of the kingdom’s tourism efforts have focused on Riyadh, which will host the 2030 World Expo and the 2034 FIFA World Cup. However, Asfar has been tasked by the Public Investment Fund to promote travel to lesser-known destinations, encouraging visitors to extend their trips beyond major cities.

Each of Asfar’s projects will cost between $40 million and $107 million, with at least 30 per cent of the funding sourced from the private sector.

Saudi Arabia’s tourism sector attracted approximately $3.8 billion in private investment in 2024, according to Tourism Minister Ahmed Al-Khateeb. The government aims to attract as much as $80 billion in private capital by 2030.