Saudi Arabia’s hospitality industry is entering a dynamic new phase of expansion, with around 94,500 hotel rooms currently under construction or in the final stages of planning. This growth builds on an existing base of 171,650 rooms, reflecting the rapid transformation underway across the Kingdom’s travel and tourism landscape.

The latest Saudi Report by global property consultancy Knight Frank highlights how the sector’s evolution mirrors the country’s wider economic diversification, with 2024 marking a particularly strong year as travel and tourism grew by 32 percent.

Robust performance and record spending

According to Oussama El Kadiri, Partner and Head of Hospitality, Tourism & Leisure Advisory for MENA at Knight Frank, the market’s momentum is being fueled by a mix of government-led reforms, private sector investment, and changing consumer behaviors.

In 2024, the tourism sector contributed SAR444.3 billion to the Saudi economy, accounting for 11.5 percent of GDP, the highest proportion in the region. Early 2025 figures continue that trend, with international visitor spending rising 9.7 percent year-on-year to SAR49.4 billion, and total tourism expenditure reaching SAR284 billion, up 11 percent.

Saudi Arabia welcomed 29.7 million international visitors in 2024—an 8 percent increase—alongside 86.2 million domestic trips, up 5 percent from the year before. International travelers accounted for SAR169 billion of total spending, a 19 percent jump compared to 2023.

“Saudi Arabia’s tourism scene is evolving fast, powered by higher-value travelers and world-class hospitality projects being delivered under Vision 2030,” said Faisal Durrani, Partner and Head of Research, MENA at Knight Frank. “The government has now raised its 2030 target from 100 million to 150 million annual visitors, with religious tourism expected to make up about one-third of that figure.”

Religious and leisure travel on the rise

Religious tourism remains the backbone of the market. In 2024, the Kingdom hosted 1.8 million Hajj pilgrims and 35.7 million Umrah pilgrims, including 16.9 million international visitors—a 25 percent increase and the highest number ever recorded.

At the same time, leisure travel is expanding rapidly. Non-religious international travelers now account for 59 percent of arrivals, up from 44 percent in 2019. Spending on holiday and leisure trips alone reached SAR36.4 billion in 2024.

Asia continues to lead as the top source region with 9.7 million visitors, followed by Egypt (3.2 million), Pakistan (2.8 million), and Bahrain (2.6 million).

Expanding hotel supply

Between January and August 2025, the average daily hotel rate nudged up to SAR746 ($199), while occupancy levels rose to 61 percent, pushing revenue per available room up by 1.3 percent. By September 2025, Saudi Arabia’s total quality hotel inventory reached 171,650 rooms, with an additional 18 percent increase expected by 2027.

Nationwide, about 358,000 new hotel rooms are in the pipeline. Four major “mega-projects” are leading this expansion, particularly in the holy cities and key urban centers:

• Rua Al Haram – over 70,000 keys

• Rua Al Madinah – around 47,000 keys

• Knowledge Economic City – about 42,000 keys

• Masar Makkah – roughly 41,000 keys

Domestic travel trends

Domestic tourism remains the largest segment, with Saudi citizens making up 74.3 percent of visitors in 2024. Roughly one in three Saudis travels within the Kingdom every two to three months, a number that rises to half among those earning more than SAR80,000 monthly.

Staycations are now a major trend:

• 36 percent favor long weekend trips (4–6 days)

• 20 percent take full-week stays

• 67 percent of high earners prefer 7–10-day getaways

Since 2019, around 250,000 Saudis have relocated to Riyadh, largely due to the city’s strong job market—it has accounted for two-thirds of new employment opportunities since then.

Favorite domestic destinations include:

• Makkah – the most visited city (42%)

• Riyadh – most popular among high earners (61%), tied with Jeddah (40%) as key business and cultural centers

• Dammam Metropolitan Area – 16 percent

• Abha (24%), Taif (22%), and Al-Ula (20%) – appreciated for their cooler climate and heritage attractions

Rising demand for high-end hospitality

Currently, around 60 percent of Saudi Arabia’s hotel rooms fall under luxury, upper-upscale, or upscale categories—a share expected to rise to 76 percent by 2030. This shift reflects growing consumer preferences, with 83 percent of travelers favoring four- or five-star stays.

Serviced apartments have also gained popularity, representing 22 percent of total stays, while resorts have grown to 11 percent, helped by ongoing Red Sea projects that will add about 8,000 rooms by 2030.

El Kadiri summed up the trend, saying:
“Saudi Arabia’s tourism and leisure industry is on the verge of historic change. By merging pilgrimage, heritage, and modern leisure experiences, the Kingdom is building a tourism identity where luxury meets authenticity—and ambition meets results.”

Kuwait reopened its airspace on June 6 following a temporary suspension implemented as a precautionary step after regional security developments involving Iran’s ballistic missile attacks, according to the Kuwait Public Authority of Civil Aviation (PACA).

In a statement shared with the Kuwait News Agency (KUNA), PACA said relevant authorities promptly activated established emergency procedures and operational plans aimed at safeguarding passengers, flight crews, and civil aviation infrastructure.

The airspace closure was in effect from 4:15 am to 6:15 am local time. During this period, 11 flights operated by Kuwait Airways and Jazeera Airways were redirected to nearby airports as part of safety measures to ensure uninterrupted protection of passengers and operational continuity.

The authority noted that following coordination with competent agencies and an assessment confirming improved conditions, air traffic operations were resumed at 6:15 am.

After the reopening, flights that had been diverted to destinations including Dammam and Riyadh resumed their original routes and continued normal operations.

Source: ZAWYA

The Qatar Civil Aviation Authority (QCAA) has dismissed reports circulating on social media alleging that the country's airspace has been closed or that flight operations have been suspended.

In a statement issued on Sunday, the authority described the claims as inaccurate and urged the public to rely exclusively on official sources for information related to aviation activities and operational updates.

The QCAA explained that the current Notice to Airmen (NOTAM) issued by the authority is designed to establish alternative routing options for aircraft. The measure aims to maintain air navigation services while ensuring the highest standards of safety, efficiency, and operational continuity.

According to the authority, the action was introduced in response to prevailing circumstances and is consistent with internationally recognized aviation regulations and best practices.

The regulator emphasized that air navigation services across Qatar remain fully operational and clarified that the NOTAM should not be interpreted as an indication of airspace closure or a halt to flight operations.

The QCAA also urged the public to avoid spreading rumours and unverified reports, stressing the importance of obtaining information through official communication channels.

Source: ZAWYA

A senior official from the International Air Transport Association (IATA) has cautioned Middle Eastern airlines against postponing aircraft orders despite rising costs and market uncertainty linked to the war in Iran, warning that such delays could become financially disadvantageous over time.

Kamil Al-Awadhi, IATA’s Regional Vice President for Africa and the Middle East, said he does not anticipate that the ongoing conflict or increased operating costs will significantly disrupt aircraft purchasing plans among carriers in the region. Speaking to reporters on Saturday during the association’s annual summit in Rio de Janeiro, he noted that Middle Eastern airlines remain among the largest global buyers of aircraft from manufacturers Boeing and Airbus.

Al-Awadhi said deferring aircraft orders is “not wise,” arguing that delays could ultimately increase costs for airlines due to extended waiting periods for new aircraft deliveries. He added that current production backlogs at manufacturers mean operators already face long lead times, particularly for the latest-generation single-aisle aircraft.

According to him, it could take several years for airlines to receive newly ordered planes, making postponements potentially counterproductive. He said most carriers are expected to continue with their existing fleet expansion strategies despite temporary disruptions.

“The plan is to continue where we're going … even though this is a hiccup,” he said.

Across the global aviation sector, airlines have been adjusting operations by reducing flight frequencies and increasing fares and ancillary charges in response to higher costs. This comes even as parts of the Middle East aviation network have experienced security risks, including airspace disruptions linked to the conflict.

Al-Awadhi also expressed concern over recent developments in Kuwait, where an attack earlier in the week at an airport killed one person and damaged a terminal used by international carriers. He said preliminary assessments suggest the affected infrastructure could take at least a year to fully restore.

“Looking at the damage from the videos and pictures that were sent to me, it’s going to take ages,” he said. “So my concern is, will the other carriers be able to go into Kuwait?”

He added that authorities may need to accelerate completion of sections of a new airport terminal or temporarily reassign international operations to facilities currently used by domestic airlines such as Kuwait Airways. He described the situation as one that would require complex logistical and operational decisions to resolve.

Source: Reuters

The Association of German Airports (Association of German Airports (ADV)) has issued a warning that the aviation sector may soon face widespread disruption as jet fuel supply pressures continue to intensify.

Speaking to the Sunday edition of Germany’s Welt newspaper, ADV chief executive Ralph Beisel said airlines are increasingly likely to cancel services, particularly low-cost carriers and routes considered less essential for tourism demand.

Beisel noted that under an optimistic outlook for 2026, passenger traffic would remain stable. However, he cautioned that a more severe scenario could see airport capacity fall by around 10 percent. Across the aviation network, that reduction could translate into disruptions affecting as many as 20 million travellers.

Such a decline would likely lead to certain destinations losing direct connectivity altogether, while others would see fewer available flights and higher fares due to constrained supply.

The association pointed to geopolitical tensions affecting global energy flows as a key factor behind the disruption. The conflict involving Iran has unsettled oil transportation routes through the Strait of Hormuz, contributing to rising jet fuel costs.

According to Beisel, jet fuel prices have remained at roughly double pre-conflict levels for more than two months, with no immediate relief expected. He added that even when fuel is available, current price levels make it difficult for airlines to operate many routes profitably, raising the likelihood of further schedule reductions in the months ahead.

Source: Oman Daily Observer

Europe’s aviation sector is preparing contingency measures to address potential jet fuel shortages caused by escalating tensions in the Middle East, prompting regulators to approve broader flexibility in fuel use across the region.

The European Union Aviation Safety Agency (EASA) announced Friday that supply disruptions affecting the Middle East and Arabian Gulf have impacted the availability of Jet A-1 fuel, the standard aviation fuel used throughout Europe. In response, regulators and fuel providers are assessing the wider adoption of Jet A fuel, a similar grade commonly used in North America, including for aircraft traveling to European destinations.

EASA issued updated operational guidance intended to help airlines, airports, and fuel suppliers safely manage the introduction of Jet A into European aviation systems. Although Jet A and Jet A-1 are closely related fuels, the agency noted that they differ in several technical aspects, including freezing point and electrical conductivity, which require additional safety precautions during operations.

The regulator cautioned that introducing Jet A into infrastructure traditionally designed for Jet A-1 could pose operational and safety challenges if the transition is not carefully coordinated across the aviation industry. EASA emphasized that effective implementation would depend on close collaboration between airports, fuel companies, airlines, and aircraft manufacturers.

The European Commission also released separate recommendations aimed at helping the transport sector respond to any future fuel supply disruptions linked to the Middle East conflict. While the Commission said there were currently no jet fuel shortages reported across the European Union, it stressed the importance of preparedness measures to maintain safe and uninterrupted flight operations.

The International Air Transport Association (IATA) echoed concerns about the potential impact of prolonged regional instability on global aviation fuel supplies. Stuart Fox, IATA’s director of flight and technical operations, said allowing European carriers greater flexibility to alternate between Jet A and Jet A-1 fuel, similar to practices already used in Canada, could provide airlines with more operational options during supply shortages.

Fox said the transition would require strict operational oversight, particularly for flights operating in colder regions, where Jet A’s higher freezing point must be taken into account during route planning and aircraft performance calculations.

He also noted that airports and fuel suppliers would need structured procedures for introducing the alternative fuel grade safely, including updated handling processes, clear labeling systems, communication protocols, and enhanced quality control measures.

Europe has experienced increasing pressure on energy and aviation fuel costs as instability in the Middle East continues to disrupt shipping routes through the Strait of Hormuz. European refineries currently supply around 70% of the bloc’s jet fuel demand, while the remainder is imported, largely from Gulf nations.

Last month, International Energy Agency Executive Director Fatih Birol warned that continued disruptions could lead to jet fuel shortages across Europe within a relatively short period.

Source: Anadolu Ajansı