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Beaches and luxury drive regional tourism

4 April 2025

 

This package also includes: Region’s hotel projects pipeline balloons

In November last year, Saudi gigaproject developer Red Sea Global opened the Shebara resort. The resort’s futuristic architecture – with metallic orbs seemingly floating above the Red Sea – is indicative of the kingdom’s efforts to transform its tourism sector to attract international leisure visitors with sandy beaches and year-round sunshine to supplement its religious tourism offerings.

While the room rates may mean visiting the resort is just an aspiration for many, its impact has been wide-ranging as social media posts by influencers visiting the resort highlight what Saudi Arabia now offers as a tourist destination.

Diversifying its offering is a key part of Saudi Arabia’s tourism strategy, which aims to attract 70 million international visitors by 2030. 

In January, Saudi Arabia’s tourism minister reported that the kingdom had welcomed a record 30 million international visitors in 2024. This figure marks a significant rise from 2019, when Saudi Arabia opened its doors to international tourism, attracting just over 17.5 million visitors.

Despite the progress, the growth rate in 2024 was 9.4%, which is slower than previous years. In 2023, arrivals jumped by 65% to reach 27.4 million. To achieve its target of 70 million visitors by 2030, Saudi Arabia must achieve an average annual increase of about 6.6 million visitors, equating to a growth rate of nearly 15% a year.

The opening of Shebara and other beach resorts will be vital to achieving this target.

Diversifying its offering is a key part of Saudi Arabia’s tourism strategy, which aims to attract 70 million international visitors by 2030

Beach resorts

While the GCC’s coastal regions and islands have been developed for tourism for decades, they are increasingly becoming magnets for travellers. According to GlobalData’s Q2 2024 survey, 54% of respondents globally prefer sun and beach holidays, a trend that the GCC is well-positioned to capitalise on.

Saudi Arabia is tapping into this demand with development projects on the country’s west coast, including the Red Sea Project, Amaala and several schemes within the Neom masterplan. 

On the other side of the Arabian Peninsula, the UAE – particularly Dubai and Abu Dhabi – has long been a favourite for beachgoers, boasting luxurious beachfront resorts. These destinations are not only about relaxation, but also offer adventure activities, from water sports to desert safaris, enhancing their appeal to a broad spectrum of tourists.

These beachfront offerings have helped the UAE’s tourism sector recover from the lockdowns during the Covid-19 pandemic. Dubai welcomed 18.7 million international overnight visitors in January to December 2024, a 9% year-on-year increase that surpassed the previous record of 17.2 million in 2023, according to data from the Dubai Department of Economy & Tourism.

Room capacity is being added to cater to the growing numbers of tourists. According to property consultancy Cavendish Maxwell, Dubai’s hotel inventory will grow by 3.1% in 2025, with 3.4% growth predicted for 2026. By the end of 2027, Dubai is set to have more than 162,600 rooms across 769 hotels.

High-end offering

Luxury tourism is another pillar of growth for the GCC’s tourism sector. The UAE and Qatar have already established themselves as luxury destinations, attracting high-net-worth individuals and affluent travellers. Dubai’s high-end hotels and shopping malls are just some of the well-developed luxury tourism experiences on offer in Dubai.

In 2024, almost 70% of room supply in Dubai was in the high-end category, according to Cavendish Maxwell, while for upcoming supply in 2025, nearly 70% will be in the high-end or upper-upscale segment.

Similarly, the Pearl-Qatar destination and the award-winning experiences offered by Qatar Airways have positioned Doha as a luxury hotspot.

Saudi Arabia is also making strides in this sector. In addition to developments like Shebara offering luxury experiences, there are high-end tourism projects being developed across the kingdom. Most recently, gigaproject developer Diriyah Company announced the Luxury 1, a 325-key hotel, which will be the brand’s first property in the Middle East. It will be part of a media and innovation district within the Diriyah project on the outskirts of Riyadh.

Diriyah Company is also building residential projects that will be operated by luxury hotel brands. These include Armani, Baccarat, Corinthia, Raffles and Ritz-Carlton branded residences.

Traditional strength

While beaches and luxury are creating new opportunities, religious tourism remains the cornerstone of Saudi Arabia’s tourism strategy, driven by the millions of Muslims that visit Mecca and Medina for Hajj and Umrah. 

A recent legal change allowing foreign ownership of land-owning companies in these cities marks a significant shift in Saudi Arabia’s approach to attracting foreign investment. This move is part of a broader strategy to bolster the economy and enhance the appeal of the Saudi financial market.

The Saudi government’s Vision 2030 aims to increase tourism to 150 million visits annually by 2030, with religious tourism playing a crucial role. The kingdom is investing in infrastructure to accommodate the growing number of pilgrims, with the expansion of airports, hotels and transportation networks under way.

The introduction of electronic and tourist visas has also made it easier for pilgrims to combine their religious journeys with other tourism experiences, broadening the scope of religious tourism to include cultural and heritage tourism.

The GCC’s tourism sector is poised for significant growth, driven by the dual pillars of beach and luxury tourism, and complemented by religious tourism. The region’s investments in resorts and supporting infrastructure, coupled with its natural and cultural attractions, position it as one of the world’s most exciting tourism destinations.

Region’s hotel projects pipeline balloons

Main image: High-end beachfront resorts such as Red Sea Global’s Shebara will be vital in achieving Saudi Arabia’s tourism targets. Credit: Red Sea Global – Shebara

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Colin Foreman

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