Saudi Arabia sees dip in international tourism but domestic travel offsets slowdown
International tourism in Saudi Arabia has not surprisingly been affected by ongoing geopolitical tensions in the Middle East, according to research from Cavendish Maxwell, although the decline in foreign arrivals has been offset by strong growth in domestic tourism.
Between January and May, international visitors to the Kingdom fell 13% to 8.3 million. As a result, total spending from international tourists also declined, albeit at a slower pace, down 8% to SAR 48 billion.
The downturn is linked to broader instability across the region sparked by the Iran conflict, which disrupted travel patterns and contributed to flight suspensions by several international carriers, as well as increased caution among global travelers. While the year began on a strong footing for regional tourism, conditions shifted following the escalation of tensions in February.
Hotel performance reflected the changing demand environment. After reaching nearly 75% occupancy in January, average hotel occupancy eased to 63% year-to-date through May, representing a 1.3% decline compared to the previous year.
Despite the slowdown in international arrivals, domestic tourism remains the dominant driver of activity in Saudi Arabia. Nearly 8 in 10 tourists in the Kingdom are domestic travelers, and this segment continued to expand over the period.
Domestic visitor numbers rose 16% between January and May to 28.9 million, while domestic tourism spending increased 8% to SAR 34.7 billion, helping to cushion the impact of weaker inbound demand.
“Like elsewhere in the region, Saudi Arabia’s hospitality and tourism sectors have been affected by geopolitical tensions, but reductions in inbound tourism have been largely offset by an increase in domestic travel, particularly in destinations like Makkah and Madinah during Ramadan, Eid, and Hajj season,” said Kevin Duffield, Director at Cavendish Maxwell.
Religious tourism continues to play a central role in the Kingdom’s tourism economy, accounting for nearly 20% of total tourism activity and approximately 40% of international tourism. Makkah and Madinah remain the strongest-performing destinations, particularly during peak pilgrimage periods.
“The positive impact of the Hajj season is clear in Makkah’s higher occupancy and average daily rate levels. We similarly expect to see strong figures for Madinah, where many pilgrims head after Hajj. Ongoing investments in pilgrimage infrastructure, combined with significant hotel expansion, should support long-term growth across both cities,” Duffield added.
The outlook
Looking ahead, Duffield noted that while short-term uncertainty and softer international demand may continue to weigh on performance, the sector remains well positioned for recovery.
“While uncertainty and lower international travel demand may continue to influence market performance in the short term, the combination of growing domestic tourism, sustained pilgrimage activity, and continued investment in tourism infrastructure positions the sector well for recovery and longer-term development,” he said.
That long-term growth is anchored in Saudi Arabia’s broader ambitions under Vision 2030, which targets 150 million annual domestic and international visitors by the end of the decade. Major global events, including Riyadh Expo 2030 and the FIFA World Cup 2034, are expected to further accelerate momentum, drawing a combined 42 million visitors.
“As the Middle East’s largest travel and tourism economy and its fastest-growing tourism market, Saudi Arabia is delivering a wide range of world-class destinations, hotels, and resorts to turn Vision 2030 into reality,” Duffield said.
