Reforms in Saudi Arabia’s visa policy and the introduction of a new airline, Riyadh Air, are poised to provide significant support to the growth of the country’s burgeoning tourism sector, according to a recent report by AlJazira Capital.

The report highlights a range of initiatives and factors contributing to the expansion of the tourism industry in Saudi Arabia. These include the ongoing expansion of airport infrastructure, plans to increase capacity for Hajj and Umrah pilgrimages, a rising number of visitors attracted by Saudi seasons, the development of tourist sites, and the hosting of various entertainment and business events. These initiatives collectively create substantial growth opportunities for businesses operating within the tourism sector in the Kingdom.

Thanks to the extensive development plan under Vision 2030, tourism activity in Saudi Arabia has rebounded to reach or approach pre-COVID levels in the first half of 2023. Indicators of this recovery include a notable 26% year-on-year increase in the total number of flights, reaching 403,220 in H1 2023. Additionally, hotel occupancy rates in the Makkah region during Ramadan hit a three-year high at 80%, driven by a significant rise in Umrah pilgrims. The number of Hajj pilgrims also nearly doubled compared to the previous year.

Citing data from the World Travel & Tourism Council, the report underscores Saudi Arabia’s potential, projecting that its travel and tourism sector is expected to grow at an average annual rate of 11% over the next decade. This rate positions Saudi Arabia as the fastest-growing destination in the Middle East.

However, AlJazira Capital cautions that there are certain downside risks to consider. These include potential delays in the implementation of the Vision 2030 initiative, challenges in attracting tourists amid competition from neighboring countries, the adverse effects of economic slowdown or inflation on sectoral demand, and the potential impact of geopolitical crises or pandemics on international travel.

In conclusion, the report highlights the considerable growth prospects for Saudi Arabia’s tourism industry and underscores the significance of ongoing reforms and initiatives in positioning the Kingdom as a leading regional destination. While there are inherent risks, the positive trajectory of the sector signals a promising future for Saudi Arabia’s tourism-related businesses.

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