Monday, September 9, 2024 Saudi Arabia’s tourism sector has emerged as a key player in the country’s economic diversification efforts, as highlighted by the International Monetary Fund (IMF) in its 2024 Article IV Consultation report. According to the IMF, the Kingdom surpassed its Vision 2030 target of attracting 100 million visitors annually by 2023—achieving the goal seven years earlier than anticipated. Tourism revenues reached $36 billion in 2023, with a 38% increase in net tourism income.
The sector’s direct and indirect contribution to Saudi Arabia’s GDP was 11.5% in 2023 and is expected to grow to 16% by 2034. This rapid growth is driven by strong domestic demand and an influx of international tourists, bolstered by major international events such as Formula One, the 2027 Asian Cup, and the 2030 World Expo.
Non-religious tourism also saw significant growth, particularly in leisure travel and visits to friends and relatives. The IMF report emphasized 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 notable gains from transportation and service exports.
By 2022, this balance had already turned positive, and 2023 saw further improvement. 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 recognized the diverse linkages the tourism sector has established with industries such as food, beverage, travel, cultural industries, and accommodation, reducing the Kingdom’s dependency on oil-based sectors.
Key giga projects like Red Sea Global and Diriyah Gate are instrumental in driving this transformation, with a focus on luxury tourism, cultural preservation, and infrastructure enhancement. These projects are at the heart of Vision 2030, the Kingdom’s ambitious economic reform plan..
