Beyond Oil: How Tourism Helped Saudi Arabia’s Economy Grow
This is part two of a three-part series about Saudi Arabia’s efforts to diversify its economy. Click here to read part one.
In 2016, Saudi Arabia introduced Vision 2030, a bold plan to strengthen its economy and reduce reliance on oil. The goal was to create new income sources and move away from fossil fuels.
Since then, the country has worked hard to achieve this. By 2023, 87% of Vision 2030’s 1,064 projects were completed or on schedule, and 81% of key goals were met—exceeding expectations for 2024-2025. Let’s explore some of these successes.
Tourism Achievements
In 2023, tourism contributed between 4.0% and 4.4% to Saudi Arabia’s economy, surpassing pre-pandemic levels, according to the Ministry of Tourism. The sector also created over 925,500 jobs during the year.
The growth was driven by a rise in both local and international tourists, according to a ministry spokesperson.
Tourists spent more than $66.6 billion (SAR 250 billion) in Saudi Arabia last year. This spending accounted for over 4% of the country’s total economy and 7% of the non-oil economy. A total of 27.4 million international tourists visited the kingdom in 2023.
The Ministry of Tourism shared that Saudi Arabia welcomed over 106 million visitors in 2023, surpassing their target by seven years. “In 2023, we exceeded expectations by welcoming over 100 million tourists,” the spokesperson told Forbes Middle East.
The Ministry of Tourism has big goals for 2030: attracting 150 million visitors, creating 1.6 million jobs, and contributing 10% to Saudi Arabia’s economy, according to a ministry representative.
In 2022, Saudi Arabia’s tourism sector grew by over 32%, adding $118.5 billion (SAR 444.3 billion) to the economy, which was 11.5% of the total GDP. This set a new record, beating the previous one by nearly 30%, according to the World Travel & Tourism Council.
The ministry aims to build a tourism industry that is attractive, sustainable, and a key global player. To support this, Saudi Arabia now offers instant e-visas for citizens of 66 countries, as well as for US, UK, and Schengen visa holders. This change makes Saudi Arabia one of the easiest countries to visit, according to an official.
To support business growth, the ministry launched the Tourism Investment Enabler Program (TIEP). Its main feature, the Hospitality Investment Enablers, focuses on increasing accommodation options in key tourism areas to make Saudi Arabia a leading global travel destination.
This program includes steps to make business operations easier, such as offering access to government-owned land with favorable terms, simplifying project approvals, and reducing market entry barriers. New regulations also aim to lower costs and encourage industry growth.
The Ministry of Tourism is launching a big plan to boost private investments in key tourist spots across the country, aiming for up to $11 billion (SAR 42 billion). This is expected to increase the annual GDP by $4 billion (SAR 16 billion) by 2030. Recently, the ministry cut government fees further by removing MoMRAH fees for all types of accommodation investments. This change, along with earlier reductions, has lowered these fees by 75% overall, according to a ministry spokesperson.
The ministry is also working on improving cultural infrastructure, developing cultural, heritage, and religious tourism, and creating new attractions through large-scale projects like NEOM, The Red Sea Project, and Diriyah. These projects aim to attract international visitors, support sustainability, and preserve Saudi Arabia’s culture.
By 2030, the Ministry of Tourism plans to contribute 10% to the country’s GDP and create 1.6 million new jobs, the spokesperson added.
Published: 25th November 2024
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