Saudi Arabia’s nominal gross fixed capital formation hits $84.7bn in Q1

Jeddah - Yasmine El Tohamy - RIYADH: Saudi Arabia’s travel and tourism sector expanded by over 32 percent in 2023, contributing a record SR444.3 billion ($118.4 billion) to the nation’s gross domestic product, a new report revealed. 

The World Travel and Tourism Council’s 2024 Economic Impact Research highlighted unprecedented achievements in the Kingdom’s GDP contribution, employment, and visitor spending. 

The Kingdom welcomed 100 million tourists in 2023, achieving its Vision 2030 target seven years early. The goal was then increased to 150 million to reflect Saudi Arabia’s continued ambitions for the sector.

Julia Simpson, WTTC president and CEO, said: “Saudi Arabia’s travel and tourism sector’s extraordinary achievements last year mark a pivotal moment in its journey toward becoming a global tourism leader.” 

She added: “As the sector continues to expand, it promises to play a crucial role in the nation's diversified economic future, while contributing significantly to global travel and tourism development.” 

The sector’s expansion by over 32 percent last year, represented 11.5 percent of the total economy, an increase of nearly 30 percent from the previous high, emphasizing the sector’s critical role in the country’s economic landscape. 

It also saw a significant rise in employment, adding 436,000 jobs to exceed 2.5 million, accounting for almost one in five jobs in the country.  

Notably, employment in this field has increased by nearly 24 percent since the previous peak, recovering from pandemic-related losses by 2022. 

According to the report, international visitor spending surged by almost 57 percent, reaching SR227.4 billion and breaking the previous record by SR93.6 billion. Domestic visitor spending also saw substantial growth, rising by 21.5 percent to SR142.5 billion. 

Saudi Minister of Tourism and Chairman of the Executive Council of UN Tourism, Ahmed Al-Khateeb, said: “The latest data from WTTC provides further evidence of the rapid success we have achieved in transforming Saudi Arabia’s tourism industry.” 

This comes as the Kingdom is set to unveil a new tourism strategy this year, utilizing artificial intelligence and seamless technology, as revealed by Gloria Guevara Manzo, chief special adviser at the Ministry of Tourism, to Arab News earlier in May. 

Speaking on the sidelines of the Future Aviation Forum 2024, Manzo noted that the plan aims to maximize the Kingdom’s assets, including culture, history, heritage, and hospitality. 

Outlook for 2024 

WTTC projected that the sector will maintain its rapid growth in 2024, with GDP contributions expected to reach SR498 billion. 

Employment in the sector is forecasted to grow by more than 158,000 jobs, bringing the total to nearly 2.7 million. 

International visitor spending is anticipated to hit SR256 billion, and domestic visitor spending is forecasted to reach SR155.2 billion. 

Looking further ahead, WTTC forecasted that by 2034, the sector in Saudi Arabia will contribute SR836.1 billion to the GDP, comprising almost 16 percent of the economy.  

The sector is expected to employ over 3.6 million people, with one in five Saudis working in tourism. 

Regional perspective 

In the Middle East, the sector also experienced substantial growth in 2023, increasing by over 25 percent to nearly $460 billion.  

Employment reached almost 7.75 million, while international spending rose by 50 percent to $179.8 billion and domestic spending grew by 16.5 percent to over $205 billion.  

WTTC projected continued growth in 2024, with GDP contributions reaching $507 billion, jobs increasing to 8.3 million, international visitor spending hitting $198 billion, and domestic visitor spending surpassing $224 billion.