Skift Take
We all read about Saudi Arabia’s ambitious giga-projects and want for international tourists, but for now, business is still coming from more traditional sources.
Saudis are exploring their own country in bigger numbers and foreigners are bringing the cash. That’s the takeaway from a report by the International Monetary Fund (IMF) on the state of the Saudi economy.
“The surge of visitors has been mostly domestic-driven while the surge in visitors’ spending was mostly inbound-driven (i.e., international arrivals),” said the IMF report.
Saudi reported 109 million visitors in 2023, beating its initial target of 100 million visitors by 2030 – a goal it has since lifted to 150 million.
Domestic tourists accounted for 74.9% of visits last year, or 81.9 million people. The Saudi government doesn’t share how they measure a domestic tourist, but Skift has been told by the Saudi Tourism Authority it partly involves tracking mobile phone signals to see when people cross land borders in the country.
International tourists spent 141.2 billion Saudi Riyals (about $37.6 billion) last year compared to 114.4 billion Saudi Riyals (about $30.5 billion) by domestic travelers.
By 2030, the goal is for 70 million foreign tourists. ‘Giga-projects’ such as Neom and The Red Sea are being built with Western tastes in mind, with a string of luxury hotels and restaurants. However, the projects themselves are unlikely to make a big contribution to overall visitor targets due to the small size of the hotels.
The estimates of the World Travel & Tourism Council indicate that Saudi Arabia’s tourism sector’s overall (direct and indirect) contribution to GDP reached 11.5% in 2023 — and is expected to increase to 16% by 2034.
There was a substantial increase in tourism spending post-Covid, which was primarily driven by international travelers visiting friends and relatives — while Saudi nationals’ leisure spending abroad experienced a significant decline of 51% from 2019 to 2023.
For international travelers, religious tourism is still the main purpose of a visit, accounting for 11.46 million of the 27.42 international visits last year. Visiting friends and family was almost tied with leisure at 6.2 and 6.25 million visitors, respectively.
For domestic tourists last year, leisure was the main purpose of travel for 35 million people.