Saudi Arabia is expanding its tourism sector beyond high-end resorts, targeting mid- and upper-mid-range travellers and increasing hotel capacity for religious visitors.

The shift comes as part of the kingdom’s broader Vision 2030 economic diversification strategy, which aims to attract 150 million tourists annually by the end of the decade.

Broadening hotel offerings beyond luxury

For years, Saudi Arabia concentrated on developing luxury resorts, particularly along the Red Sea, with room rates averaging around $2,000 per night.

According to Reuters, Tourism Minister Ahmed Al-Khateeb confirmed that the kingdom is now constructing new resorts aimed at middle-class and upper-middle-class travellers, providing more affordable hotel options.

The expansion includes ten upcoming resorts on Shura Island, set to open in the coming months at “much lower price points” than existing luxury properties.

This strategy is expected to make Saudi Arabia more accessible to a wider international audience, particularly leisure travellers who previously lacked options outside ultra-luxury accommodations.

Religious tourism as a growth engine

Religious travel remains central to the kingdom’s tourism objectives. Saudi Arabia plans to nearly double the number of pilgrims visiting Mecca and Medina, from current figures to 30 million by 2030.

The government is facilitating this growth by adding tens of thousands of hotel rooms, ensuring accommodation aligns with the expected surge in visitors.

Enhanced visa policies, including a potential Schengen-style arrangement for Gulf Cooperation Council nationals by 2026 or 2027, aim to streamline regional access and strengthen the kingdom’s position as a leading destination for pilgrimage tourism.

Aligning tourism with vision 2030

The expansion of mid-range hotels and increased pilgrim accommodation reflects the kingdom’s commitment to Vision 2030, which seeks to diversify the economy away from oil dependency.

By broadening its tourism base, Saudi Arabia hopes to capture a larger share of international leisure travel while also reinforcing its role as a hub for religious tourism.

Industry analysts note that a more inclusive hotel market could boost occupancy rates, extend average stays, and increase tourism-related revenues.

With infrastructure improvements and regulatory changes underway, global hotel operators and investors are closely monitoring opportunities in the Saudi hospitality sector.