Why does tourism matter?
Tourism is a key engine of economic growth and one of the most important business sectors. The travel and tourism industry accounted for nearly 10% of global GDP, and it employs about one tenth of the world’s population, representing roughly 1 in every 10 jobs. Tourism contributes to both advanced and developing economies, and the industry has a profound impact on sectors such as hospitality, transport, retail, and entertainment. In some countries, tourism represents more than 20% of GDP.
The pandemic year and the benchmark for comparisons
The pandemic year of 2020 was catastrophic for tourism across the whole world: air travel between countries stopped, cities and tourist sites closed, cafe and restaurant patrons disappeared, and millions lost their jobs. For this reason, 2019 is viewed as a reference year, the last season before the pandemic, against which other years are measured. Over the past year, the direct tourism GDP recovered to pre-pandemic levels globally, and the World Tourism Organization confirmed that tourism reached 97% of pre-pandemic levels during the first quarter of 2024, as more than 285 million international tourists traveled in the first three months, a 20% year-on-year increase, confirming that the sector is close to full recovery with arrivals growing 2%.
The world’s leading destinations and Saudi Arabia’s position
According to 2023 figures, Spain led globally as the most preferred destination for travelers, receiving a record 85.1 million international tourists, followed by France with about 72.4 million people, then Turkey, which recorded notable growth over the past decade as it received 49 million tourists. In Saudi Arabia, the number of inbound tourists from abroad reached 27 million over the past year, with their spending exceeding SAR 141 billion.
Saudi Arabia ranked among the world’s best-performing tourist destinations during the first quarter, with 98% growth in tourist numbers compared to 2019, placing third after Qatar in first place, which achieved 177% growth, followed by Albania at 121%, while Tanzania came fourth with 53% growth.
Did Saudi tourism start from zero?
Saudi tourism is not a fledgling newcomer that started from zero. From the holy lands in Makkah and Madinah, home of serenity and the longing of Muslims’ hearts, to the green lands and towering mountains in the south, through the deep-rooted heritage and civilization of AlUla, the Red Sea coastlines, the enchanting deserts across the length and breadth of the country, and not least the snow on the peaks of Tabuk, tourism in Saudi Arabia sets off possessing every asset and is anything but starting from zero. And before the land, there is the generous, hospitable people, the foundation of tourism and the primary pillar in building it: a friendly people who love their country and others.
The launch moment
In September 2019, Saudi Arabia launched the National Tourism Strategy, and the Ministry of Tourism announced the availability of an electronic visit visa for citizens of 66 countries, alongside 7 other categories. Saudi Arabia hopes for tourism to be a key support for the economic reform program and a primary contributor to non-oil revenue, and it aspires to raise the sector’s contribution to GDP to 10% and attract 100 million tourists by 2030.
The latest figures
Tourist numbers
The number of domestic tourists in 2023 rose by about 71% compared to pre-COVID levels, ranging from 47.8 to 81.9 million tourists. The change in inbound tourism was also striking, jumping from 17.5 to 27.4 million tourists. The total reached 109.3 million tourists in 2023, of whom 27 million came from abroad.
| Year | Inbound from abroad | Domestic | Total |
|---|---|---|---|
| 2015 | 17.9 | 46.4 | 64.4 |
| 2016 | 18.0 | 45.0 | 63.0 |
| 2017 | 16.1 | 43.8 | 59.9 |
| 2018 | 15.3 | 43.2 | 58.6 |
| 2019 | 17.5 | 47.8 | 65.3 |
| 2020 | 4.1 | 42.1 | 46.2 |
| 2021 | 3.4 | 63.8 | 67.2 |
| 2022 | 16.6 | 77.8 | 94.4 |
| 2023 | 27.4 | 81.9 | 109.3 |
Where did the tourists come from?
Bahrain ranked first in the number of tourists arriving in Saudi Arabia, with 3.4 million tourists coming from it, followed by Egypt with 2.6 million, then Pakistan with 2.5 million. This shows that religious tourism such as Hajj, Umrah, and visits, which represented 42% of total inbound tourism, remains a key driver of tourism in the country, evident from the fact that the countries topping the list are Islamic countries or have a large number of Muslims such as India. Yet this did not prevent the appearance of Western tourists numbering close to one million from 5 countries, led by Britain with 370 thousand, followed by the United States with 331 thousand.
| Country | Number of tourists |
|---|---|
| Bahrain | 3.4 million |
| Egypt | 2.6 million |
| Pakistan | 2.5 million |
| Kuwait | 2.3 million |
| Indonesia | 1.8 million |
| India | 1.7 million |
| UAE | 1.4 million |
| Britain | 370 thousand |
| United States | 331 thousand |
Tourist spending
Total spending on tourism in 2023 reached about SAR 255 billion, meaning the average daily spending by tourists reached SAR 700 million per day throughout the days of the year. Compared to 2019, spending by domestic tourists rose 87%, increasing from SAR 61.2 billion to SAR 114.4 billion, while spending by inbound tourists from abroad rose 37% from SAR 103.3 billion in 2019 to SAR 141.2 billion last year.
| Year | Inbound | Domestic | Total |
|---|---|---|---|
| 2015 | 82.5 | 48.4 | 131.0 |
| 2019 | 103.3 | 61.2 | 164.5 |
| 2020 | 20.1 | 43.3 | 63.4 |
| 2021 | 14.7 | 102.1 | 116.9 |
| 2022 | 98.3 | 107.2 | 205.5 |
| 2023 | 141.2 | 114.4 | 255.6 |
Average tourist spending per trip
Inbound tourist spending rose 12% from SAR 4,580 in 2015 to SAR 5,150 last year, while the increase in domestic tourist spending reached about 34% over the same period. Religious tourism represents 42% of total inbound tourism, while leisure came second at 23%, and visiting relatives and friends at the same rate of 23%, followed by business at 7%. As for domestic tourists, leisure tops the list of their trip purposes at 35 million tourists, or 43% of total domestic tourism trips, with visiting friends and relatives in second place at 31%, while religious purposes made up 12% and business 10%.
Average length of stay
One of the strongest indicators of the development of Saudi tourism is the increase in the inbound tourist’s trip length, which grew by about 50% from 10.7 nights in 2015 to 15.8 nights last year, while for domestic tourists the increase was smaller at 17%. Although the domestic tourist spends during their trip, they recirculate the spending, unlike the inbound tourist who contributes to the inflow of foreign currency and contributes more strongly to driving the economy.
| Year | Inbound tourist | Domestic tourist |
|---|---|---|
| 2015 | 10.7 | 5.2 |
| 2019 | 10.8 | 5.6 |
| 2022 | 16.0 | 4.7 |
| 2023 | 15.8 | 6.1 |
Total nights of stay
Another indicator of the recovery of domestic tourism is the rise in the number of overnight stays from 434 million nights in 2015 to 927 million last year, a striking increase reaching 114%. The most important thing about this indicator is that the rise was in inbound tourists’ nights, which increased from 193 million nights to 432 million in just 9 years. Makkah represents the main destination for inbound tourists from abroad, receiving 15.4 million visitors, and it was also the preferred destination for domestic tourists after receiving 22.6 million tourists.
| Year | Inbound | Domestic | Total |
|---|---|---|---|
| 2015 | 193 | 241 | 434 |
| 2019 | 189 | 268 | 457 |
| 2022 | 271 | 370 | 641 |
| 2023 | 432 | 495 | 927 |
Research criteria
A person is classified as a tourist if their trip includes an overnight stay of at least one night in the country or place being visited. Saudi tourism data includes comprehensive details about domestic and inbound tourists: their number, nights of stay, value of spending, average length of stay, average tourist spending per trip, and average tourist spending per night, over 9 years from 2015 through 2023. As for global tourism data, we relied on the official figures released in 2023 and the first quarter of 2024, with a look at the exceptional comparative value of 2019.
Who is this report for?
At Qoyod, our work is not directly tied to the tourism sector, but the work of some of our partners among Qoyod’s clients is highly connected to it, as the tourism sector is a powerful driver of a large number of business activities. We therefore present this report to our clients and to those interested, especially entrepreneurs in hospitality sectors, travel agencies, and entertainment projects.
Report sources
This report relied on official Saudi figures for the years 2015 through 2023, and on World Tourism Organization data for international tourism for 2023 and the first quarter of 2024.
Conclusion
All the indicators above point to the country experiencing a tourism boom, particularly in inbound tourism from abroad, which no longer comes solely for the purpose of Hajj and Umrah; rather, 58% of it came for leisure, visiting friends, and business. Entrepreneurs can benefit from the many activities arising from the arrival of visitors, such as providing unique experiences through popular hospitality, local cuisine, or cultural activities. What distinguishes the impact of the tourism sector is that it is not limited to the capital and major cities, but extends to the governorates and villages, and every person with an idea can start, right now.