Saudi Arabia is set to invest $37.8 billion in the expansion of its hotel industry, with plans to add 315,000 new hotel rooms by 2030. This move aims to support the nation's growing tourism, hospitality, and travel sectors, as part of efforts to diversify the economy beyond oil. Upon completion, the total number of hotel rooms in Saudi Arabia will reach nearly 450,000, with the futuristic city of Neom at the forefront of this development, as stated in Knight Frank's 2023 Saudi Report.

With domestic tourism playing a vital role in the kingdom's future, the report reveals that 65% of Saudi Arabians already travel within the country between one and three times a month. The demand for various accommodation types, including options for younger generations, is expected to rise. Furthermore, the development of new airports, national airlines, and a supportive legislative framework will be crucial for attracting international investors.

In order to meet the growing demand for travel and tourism, Saudi Arabia is focusing on becoming a global transport and logistics hub. This includes the introduction of a new carrier, Riyadh Air, and the development of King Salman International Airport. By 2030, the kingdom aims to triple its annual passenger traffic to 330 million and increase the number of destinations to 250 from the current 99, with $100 billion in investments from both the government and private sectors.

The planned hotel supply for 2030 will consist of 56% international brands, 41% local brands, and 3% unbranded establishments. There is a clear need for diverse accommodation options in the kingdom, and the rapid expansion of hospitality-related offerings will play a crucial role in boosting domestic tourism.

As the preferences of Saudi Arabians evolve, the demand for various accommodation types is expected to increase, with 42% of respondents in Knight Frank's survey preferring to stay in hotels. The younger generations, particularly those aged 25 to 35, are less concerned about cost and more focused on the overall experience. This presents an opportunity for both international and local hotel brands to cater to the needs of this growing market segment.