Dubai, UAE — Tourist spending in Saudi Arabia rose to SAR82.7 billion ($22 billion) in the first quarter of 2026 as strong domestic travel offset a decline in international arrivals, according to a report released on Tuesday by real estate consultancy Cavendish Maxwell.
Total visitor numbers increased 8% year-on-year to 37.2 million between January and March, driven by a 16% rise in domestic tourism to nearly 29 million travellers, the report showed.
International arrivals fell 13% from a year earlier to 8.3 million visitors, reflecting softer inbound travel demand amid regional geopolitical tensions and economic uncertainty. However, foreign visitors continued to account for the majority of tourism expenditure.
Inbound travellers generated SAR48 billion during the quarter, representing nearly 60% of total tourism spending, compared with SAR34.7 billion from domestic tourists.
The figures suggest overseas visitors spent more per trip than a year earlier, with spending declining by only 7% despite the sharper drop in visitor numbers.
Religious tourism drives hotel performance
Saudi Arabia’s religious tourism hubs continued to outperform the broader hospitality market, with Makkah and Madinah recording the highest occupancy rates and room revenues.
National hotel occupancy reached almost 75% in January before easing to 63% on a year-to-date basis through May, down 1.3% from the same period in 2025.
In Makkah, occupancy stood at nearly 84% in January and averaged just under 73% through May, up 12% year-on-year. Madinah hotels recorded occupancy of almost 85% in January and 76% year-to-date through May, although that was 3% below last year’s level.
“The positive impact of the Hajj season is clear in Makkah’s higher occupancy and ADR levels during May,” Kevin Duffield, Director of Built Asset Consulting at Cavendish Maxwell, said in the report.
He added that strong demand in Madinah was expected to continue as pilgrims traditionally travel there after completing the Hajj pilgrimage.
Room rates rise despite uneven regional performance
At the national level, average daily room rates (ADR) rose to SAR825 year-to-date through May, up 12% from a year earlier.
Makkah recorded the strongest growth, with ADR increasing 24% to SAR918, while Madinah posted a 5.7% rise to SAR878.
By contrast, Riyadh’s ADR declined around 6% to SAR771 and Jeddah’s fell 7% to SAR635, highlighting varying market conditions across the kingdom.
Saudi Arabia currently has more than 176,000 hotel rooms, including about 64,330 in Makkah, 28,000 in Riyadh, 22,115 in Madinah and 16,080 in Jeddah.
Higher-end properties account for roughly two-thirds of hotel inventory nationwide, with luxury and upscale accommodation representing more than 70% of room supply in Riyadh and Madinah.
Massive hotel pipeline targets Vision 2030 goals
Saudi Arabia plans to add around 105,500 hotel rooms across 382 properties by 2030 as it seeks to transform tourism into a key pillar of economic diversification under Vision 2030.
Nearly 18,150 rooms across 82 hotels are expected to open this year alone, with Makkah and Madinah accounting for around 40% of the new supply.
Riyadh is set to receive more than 2,780 additional rooms in 2026, while Jeddah is expected to add nearly 2,750 rooms. Emerging tourism and business destinations such as Dammam and Al Khobar are also expanding their hospitality offerings.
The expansion comes as Saudi Arabia pursues a target of attracting 150 million domestic and international visitors annually by 2030.
Major events expected to boost tourism
Authorities expect a series of global events to support long-term growth in visitor numbers, including the upcoming Riyadh Expo 2030 and the FIFA World Cup 2034.
Together, the two events are expected to attract more than 42 million visitors and accelerate investment in hotels, transport infrastructure and tourism projects.
While regional tensions have weighed on international travel demand in recent months, Cavendish Maxwell said strong domestic tourism, religious travel and continued government-backed investment should help support the sector’s growth trajectory over the coming years.
Saudi Arabia has emerged as the Middle East’s largest tourism economy under Vision 2030, with authorities investing heavily in new destinations, resorts and cultural attractions as part of efforts to reduce dependence on oil revenues.
