Travel & Tourism - Saudi Arabia

Saudi Arabia

By 2024, the revenue of Saudi Arabia's Travel & Tourism market is projected to reach US$3,952.00m.
Furthermore, this revenue is expected to grow annually at a rate of 3.51%, resulting in a projected market volume of US$4,696.00m by 2029.
The largest market in Saudi Arabia is the Hotels market, with a projected market volume of US$2,563.00m by 2024.
It is expected that by 2029, the number of users in hotels will amount to 11.88m users.
In 2024, the user penetration rate in the Saudi Arabian Hotels market is 27.3%, which will increase to 34.6% by 2029.
The average revenue per user (ARPU) by 2029 is expected to be US$386.80.
Additionally, it is projected that by 2029, 86% of the total revenue generated in the Saudi Arabian Travel & Tourism market will be through online sales.
It is noteworthy that in global comparison, United States is projected to generate the most revenue in the Travel & Tourism market with US$214bn in 2024.
Saudi Arabia's tourism industry is rapidly growing, driven by new infrastructure development, cultural heritage sites, and a focus on luxury travel experiences.

Key regions: Malaysia, Europe, Singapore, Vietnam, United States

Definition:

The Travel & Tourism market encompasses a diverse range of accommodation services catering to the needs and preferences of travelers. This dynamic market includes package holidays, hotel accommodations, private vacation rentals, camping experiences, and cruises.

Structure:

The market consists of five further markets.

The Cruises market covers multi-day vacation trips on a cruise ship. The Cruises market encompasses exclusively passenger ticket revenues.
The Vacation Rentals market comprises of private accommodation bookings which includes private holiday homes and houses as well as short-term rental of private rooms or flats.
The Hotels market includes stays in hotels and professionally run guest houses.
The Package Holidays market comprises of travel deals that normally contain travel and accommodation sold for one price, although optional further provisions can be included such as catering and tourist services.
The Camping market includes bookings at camping sites for pitches using tents, campervans, or trailers. These can be associated with big chains or privately managed campsites.

Additional Information:

The main performance indicators of the Travel & Tourism market are revenues, average revenue per user (ARPU), users and user penetration rates. Additionally, online and offline sales channel shares display the distribution of online and offline bookings. The ARPU refers to the average revenue one user generates per year while the revenue represents the total booking volume. Revenues are generated through both online and offline sales channels and include exclusively B2C revenues and users for the above-mentioned markets. Users represent the aggregated number of guests. Each user is only counted once per year. Additional definitions for each market can be found within the respective market pages.

The booking volume includes all booked travels made by users from the selected region, independent of the departure and arrival. The scope includes domestic and outbound travel.

Prominent players in this sector include online travel agencies (OTAs) like Expedia and Opodo, as well as tour operators such as TUI. Specialized platforms like Hotels.com, Booking.com, and Airbnb facilitate the online booking of hotels and private accommodations, contributing significantly to the market's vibrancy.

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Region

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Analyst Opinion

Saudi Arabia's Travel & Tourism market is experiencing a significant growth trajectory.

Customer preferences: Travelers in Saudi Arabia are increasingly seeking unique and authentic experiences, moving away from traditional tourist attractions to more off-the-beaten-path destinations. There is a growing interest in cultural and adventure tourism, as well as wellness and eco-friendly travel options.

Trends in the market: One noticeable trend in the Saudi Arabian Travel & Tourism market is the rise of domestic tourism. With the government investing heavily in developing tourism infrastructure within the country, more Saudis are opting to explore their own backyard. Additionally, the recent relaxation of visa regulations has made it easier for international tourists to visit Saudi Arabia, leading to a surge in inbound tourism.

Local special circumstances: Saudi Arabia's Vision 2030 initiative plays a crucial role in shaping the country's Travel & Tourism market. The government's efforts to diversify the economy and reduce dependence on oil revenue have led to significant investments in the tourism sector. Projects like the Red Sea Development and NEOM are aimed at transforming Saudi Arabia into a top tourist destination, offering unique experiences to visitors.

Underlying macroeconomic factors: The strong economic growth in Saudi Arabia, coupled with a young and tech-savvy population, has contributed to the rapid development of the Travel & Tourism market. Increasing disposable incomes and a growing middle class have fueled the demand for travel experiences both domestically and internationally. Moreover, the government's focus on promoting tourism as a key sector for economic growth has attracted investments from both local and international players, further driving the expansion of the market.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on bookings, revenues, and sales channels of hotels, vacation rentals, cruises, package holidays, and camping.

Modeling approach:

Market sizes are determined through a bottom-up approach, building on a specific rationale for each market. As a basis for evaluating markets, we use financial reports, the Global Consumer Survey, third-party studies and reports, data from industry associations (e.g., UNWTO), and price data of major players in respective markets. To estimate the number of users and bookings, we furthermore use data from the Statista Consumer Insigths Global survey. In addition, we use relevant key market indicators and data from country-specific associations, such as country-related GDP, demographic data (e.g., population), tourism spending, consumer spending, internet penetration, and device penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, ARIMA, which allows time series forecasts, accounting for stationarity of data and enabling short-term estimates. Additionally, simple linear regression, Holt-Winters forecast, and exponential trend smoothing methods are applied. A k-means cluster analysis allows for the estimation of similar countries. The main drivers are tourism GDP per capita and respective price indices.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change.