RIYADH: șÚÁÏÉçÇűâs hospitality sector continued its growth momentum in the first half of 2025, with the average daily rate rising 1.9 percent year on year to reach SR821.8 ($219.06), according to new data.Â
The findings, published in JLLâs âQ2 2025 Hotels Market Dynamicsâ report, also showed that revenue per available room edged up 0.2 percent to SR512.3 during the same period, reflecting the Kingdomâs ongoing transformation of its tourism and hospitality industries.Â
Nationwide occupancy eased by 1.7 percentage points year on year to 62.3 percent in the first half, but the sector remains underpinned by the Saudi Vision 2030 agenda, which aims to raise tourismâs contribution to gross domestic product from 3 percent to 10 percent and generate 1 million new jobs by the end of the decade.Â
It also aligns with the countryâs goal of attracting 150 million visitors annually by 2030, surpassing the initial Vision 2030 target of 100 million.Â
Taimur Khan, head of research at JLL Middle East and Africa, said: âThe evolving market dynamics in șÚÁÏÉçÇűâs key cities point to significant transformations, driven by ambitious government initiatives and a strategic focus on diversifying the Kingdomâs tourism offerings, in line with the Vision 2030 goals.â Â
He added: âDespite short-term performance adjustments, the long-term outlook remains positive as expanding tourism offerings create new development opportunities and attract domestic and international investors seeking to capitalize on the Kingdomâs strong tourism growth.â Â
The report further indicated that after experiencing record tourism growth in 2024, șÚÁÏÉçÇűâs hospitality sector is now witnessing major strategic changes, fueled by a surge in leisure tourism and a significant rise in high-quality offerings outside conventional urban hubs.Â
Although religious tourism remained strong in the holy cities of Makkah and Madinah, performance metrics in Riyadh and Jeddah were more subdued or saw declines, reflecting differing market dynamics across regions.Â
Riyadh faced the steepest performance declines in the first half of 2025, with both occupancy and ADR dropping 5 percentage points and 6.9 percent year on year, respectively. In contrast, Jeddah showed mixed results, with a 1.9 percentage point rise in occupancy despite a 7.1 percent fall in ADR.
Makkah posted relatively strong results, recording a 7.1 percent increase in ADR and a 3.1 percent rise in RevPAR, even as occupancy slipped 3.7 percentage points.
Madinah registered solid RevPAR growth of 2.7 percent in the year to June 2025.Â
âIn H1 2025, both Riyadh and Jeddah maintained healthy development pipelines. The capital city added approximately 690 keys in H1 2025, increasing the total hospitality stock to 49,100 keys. An additional 1,080 keys are expected to enter the market in H2, reinforcing its position as the Kingdomâs primary business and increasingly important leisure destination,â the report said.Â
âNew hotel developments in Riyadh are increasingly positioned away from traditional city centers, with international operators like Marriott, Hilton, Accor, and IHG driving high-quality supply growth,â it added.Â
The report also disclosed that Jeddah added 750 new hotel keys, raising its total inventory to 18,760, with a further 1,300 expected by the end of the year. This positions the city for continued growth, supported by rising demand from major events such as Jeddah Season, Formula 1, and Saudi Pro League matches.Â
During the first half of 2025, Makkah and Madinah maintained stable hotel inventories at 154,590 keys and 60,170 keys, respectively. However, notable expansion is anticipated in the second half of the year, with 5,590 new keys planned for Makkah and 710 for Madinah.
