Prime Highlights:
- Saudi Arabia’s hospitality sector grew in H1 2025, with the average daily rate rising 1.9% to SR821.8 ($219.06).
- The Kingdom aims to attract 150 million visitors a year by 2030, creating one million new jobs and boosting tourism’s share of GDP to 10%.
Key Facts:
- Riyadh added 690 new hotel rooms in H1, bringing its total to 49,100, with another 1,080 expected this year.
- Jeddah added 750 rooms, reaching 18,760, and will add 1,300 more in the second half of 2025.
Key Background:
The hotel business continued to expand in the first half of 2025 in Saudi Arabia, following the encouragement of Vision 2030 and a surge in tourism demand. According to JLL’s latest “Q2 2025 Hotels Market Dynamics” report, the average daily rate (ADR) across the country rose 1.9 percent year on year to reach SR821.8 ($219.06). Revenue per available room (RevPAR) edged up 0.2 percent to SR512.3 during the same period.
Nationwide occupancy softened slightly, declining 1.7 percentage points to 62.3 percent, but long-term prospects remain strong. Saudi Arabia wants tourism to make up 10% of its economy by 2030, up from the current 3%. It also plans to create one million new jobs and attract 150 million visitors each year, higher than its earlier goal of 100 million.
Taimur Khan, Head of Research at JLL Middle East and Africa, noted that the country’s evolving market dynamics are being shaped by government initiatives and diversification strategies. “Despite short-term performance adjustments, the long-term outlook remains positive as expanding tourism offerings create new development opportunities,” he said.
Performance varied across major cities. Riyadh experienced the largest decline, with occupancy dropping 5 points and room rates decreasing by 6.9%. Jeddah, however, had a 1.9-point rise in occupancy even though room rates fell 7.1%. Makkah reported stronger results with ADR up 7.1 percent and RevPAR rising 3.1 percent, although occupancy slipped slightly. Madinah also posted a 2.7 percent gain in RevPAR in the first half of the year.
Development activity continued at a pace. Riyadh added about 690 new hotel rooms in the first half of the year, bringing its total supply to 49,100, with another 1,080 expected before the end of 2025. Jeddah added 750 rooms, bringing the total to 18,760, and another 1,300 are expected later this year. Makkah and Madinah kept their hotel numbers steady at 154,590 and 60,170, but both cities plan big expansions soon.
Major hotel groups like Marriott, Hilton, Accor, and IHG are driving this growth as Saudi Arabia’s tourism sector expands with more leisure visitors, big events, and religious travel.
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