Fueled by ambitious tourism goals, Saudi Arabia is embarking on a major expansion of its hospitality sector, aiming to build an impressive 320,000 new hotel rooms by 2030, according to a study by Knight Frank.

The focus is on luxury: 67% of the planned rooms will fall in the upscale (4-star) or luxury (5-star) categories. This aligns with the kingdom’s strategy to attract many international tourists.

“With a target of welcoming 150 million visitors by 2030 — a 50% increase from its previous goal — the government is actively exploring various strategies to attract international travelers,” said Turab Saleem, Partner and Head of Hospitality at Tourism and Leisure Advisory in Middle East and Africa.  

This strategy goes beyond just hotel rooms. The government is also investing heavily in cultural and entertainment offerings, including theme parks like Riyadh’s Boulevard World and many more planned nationwide.

The study also predicts a shift in the hotel operator landscape. While Accor Hotel Group is currently the leader, Marriott International is expected to take the top spot with an estimated 26,200 rooms under management by 2030.

Another factor driving the hotel boom is the upcoming 2030 World Expo in Riyadh. The event is projected to inject $94.6 billion into the city’s economy and attract 40 million visitors.

This influx of tourists will require a substantial workforce in the hospitality sector. Knight Frank estimates that between 232,000 and 387,000 key workers might need accommodation, highlighting the potential demand for dedicated staff housing.

Ensuring that key workers have proper accommodation is crucial for the long-term success of the tourism sector, emphasized Faisal Durrani, Partner and Head of Research in the Middle East and North Africa. “Not only does accommodation of this type help to mitigate against staff attraction and retention issues, but it also creates investment-grade assets,” Durrani added.

With nearly 100 million tourists visiting the country in 2023 and tourism already contributing 6% to GDP, Saudi Arabia appears well on track to achieving its ambitious 10% target by 2030.