Saudi Arabia’s tourism sector has emerged as a key driver of the country’s ambitious economic diversification efforts, as highlighted by the International Monetary Fund (IMF) in its 2024 Article IV Consultation report. The Kingdom has surpassed its Vision 2030 target of attracting 100 million visitors annually by 2023, achieving this milestone seven years ahead of schedule.
Tourism revenues reached an impressive $36 billion in 2023, with a 38% increase in net tourism income. The sector’s direct and indirect contribution to Saudi Arabia’s GDP reached 11.5% in 2023 and is projected to grow further to 16% by 2034. This rapid growth is fueled by a combination of robust domestic demand and a surge in international tourists, further boosted by major international events such as Formula One, the 2027 Asian Cup, and the 2030 World Expo.
The sector has seen substantial growth in non-religious tourism, particularly in leisure travel and visits to friends and relatives. The IMF report emphasizes the positive impact of tourism on Saudi Arabia’s service balance, which has shifted to a surplus. The Kingdom now earns more from international visitors than it spends on outbound tourism, with significant gains from transportation and service exports. This positive balance was already established by 2022, and 2023 saw further improvements. Notably, Saudi nationals’ spending on outbound tourism has decreased, while expatriates within the Kingdom have increased their leisure spending since the post-COVID recovery.
The report also acknowledges the diverse linkages the tourism sector has established with various industries, including food, beverage, travel, cultural industries, and accommodation. This integration has contributed to reducing the Kingdom’s dependency on oil-based sectors. Key giga projects like Red Sea Global and Diriyah Gate play a pivotal role in driving this transformation, focusing on luxury tourism, cultural preservation, and infrastructure enhancement. These projects are at the heart of Vision 2030, Saudi Arabia’s ambitious economic reform plan, signifying the Kingdom’s commitment to building a sustainable and thriving tourism industry.
