The International Monetary Fund (IMF) has highlighted Saudi Arabia’s tourism sector as a major contributor to its economic diversification in its 2024 Article IV Consultation report.
The report acknowledges Saudi Arabia’s success in surpassing the Vision 2030 target of attracting 100 million visitors annually by 2023, seven years ahead of schedule.
Tourism revenues reached a historic high of $36 billion in 2023, with net tourism income increasing by 38%. The sector’s direct and indirect contribution to GDP reached 11.5% in 2023, with expectations to grow to 16% by 2034.
The report acknowledges Saudi Arabia’s success in surpassing the Vision 2030 target of attracting 100 million visitors annually by 2023, seven years ahead of schedule.
Tourism revenues reached a historic high of $36 billion in 2023, with net tourism income increasing by 38%. The sector’s direct and indirect contribution to GDP reached 11.5% in 2023, with expectations to grow to 16% by 2034.
According to IMF, central to this growth has been a combination of strong domestic demand and rising international arrivals.
Non-religious tourism has surged, with increased leisure travel and visits to friends and relatives to be driven further by major international events such as Formula One, the 2027 Asian Cup, and the 2030 World Expo.
Ahmed Al Khateeb, Minister of Tourism, acknowledged the IMF’s recognition, emphasizing that Saudi Arabia is developing a tourism sector that caters to a wide range of needs, including adventure, culture, sports, and entertainment.
He pointed out that, as per preliminary data, the kingdom had welcomed 60 million tourists in the first half of 2024, and the sector’s growth trajectory remains strong.
The Minister also pointed to numerous opportunities for investors as Saudi Arabia continues to develop unique, world-class experiences for visitors.
Furthermore, the IMF report underscores the role of tourism in shifting Saudi Arabia’s service balance to a surplus. This means that the Kingdom is now earning more from international visitors than it is spending on outbound tourism.
By 2022, this shift resulted in a positive balance, and 2023 saw further gains through increased revenue from transportation and service exports.
The report also notes that while outbound tourism spending by Saudi nationals declined, expatriates within the Kingdom significantly increased their leisure spending post-Covid.
Crucial to this transformation is the diverse linkages Saudi Arabia’s tourism sector has created across industries, such as food, beverage, travel, cultural industries, and accommodation.
These connections are helping to reduce the Kingdom’s reliance on oil-intensive sectors. Major Giga projects like Red Sea Global and Diriyah Gate are pivotal in this shift, focusing on luxury tourism, cultural preservation, and infrastructure improvements.
Key government initiatives have played an instrumental role in facilitating this growth. The introduction of e-visa programmes, now available in 66 countries, has enhanced accessibility for international visitors, while significant investments in infrastructure, such as new international airports and expanded road and rail networks, have supported the sector’s expansion.
Moreover, new education and training programmes for tourism professionals are fostering job creation and strengthening industry capacity.
Through robust international marketing campaigns, partnerships with global travel platforms, and participation in global tourism fairs, Saudi Arabia has successfully positioned itself as a leading global tourist destination.
As part of its Vision 2030 strategy, Saudi Arabia initially aimed to attract 100 million visitors annually by 2030. Achieving this target seven years ahead of schedule, the kingdom has now revised its goal to 150 million tourists by 2030, underscoring its ambition to become a top global tourist destination and a key player in the international tourism market.
Vision 2030 remains the Kingdom’s comprehensive economic reform plan, with tourism at its core.
The IMF’s recognition of Saudi Arabia’s progress reflects the vast potential of its tourism sector and its capacity to drive sustainable economic growth in the years to come. -TradeArabia News Service
