Promise alone is not enough for investors, says Saudi minister

• Backing sought for tourism projects
• ‘Sharp questions being asked’
• Hotel groups doubling room count

Saudi Arabia is asking investors to back its tourism projects despite its Vision 2030 programme cutbacks, arguing the sector has built enough of a track record to stand on its own.

Officials from the kingdom say they welcome tougher questions from global investors because they bring greater discipline to a sector that is moving from state-led expansion towards more commercially driven growth.

“We do not believe investors should be asked to invest on promise alone,” Mahmoud Abdulhadi, Saudi deputy tourism minister for destination enablement, told a hospitality investment forum on Tuesday.

Capital, he said, should go “where demand is forming, where destinations are opening, where reforms and regulations ease and clarify the investment process”.

Abdulhadi said investors are “asking very sharp questions” and seeking regulatory clarity, quality infrastructure and assurance that projects align with consumer demand.

“Regional volatility across the globe is rising,” he said. “Global capital is more selective. Investors are rightly asking questions about returns, phasing, and future stability. All this introduces a high degree of discipline into the capital investment thesis, and Saudi Arabia welcomes this discipline.”

The pitch comes as Riyadh scales back years of heavy spending and reprioritises the giga-projects meant to diversify the Saudi economy away from oil. Rising costs and execution problems have strained budgets, while lower oil prices and foreign direct investment inflows below target have left less money to fund them.

Contracts have been delayed, cut or cancelled, after the $1 trillion Public Investment Fund (PIF) cut project budgets by as much as 60 percent. The Iran-Israel war has compounded that pressure, disrupting Strait of Hormuz shipping and constraining Saudi crude exports, even as Brent surged towards $120 a barrel before easing to around $70.

Speaking at the Future Hospitality Summit in Riyadh, Abdulhadi pointed to Saudi Arabia’s tourism record: more than 120 million foreign and local visitors in 2025, spending over SAR304 billion ($81 billion) – beating the government’s original 2030 target of 100 million visitors five years early.

Tourism’s share of GDP crossed 5 percent in the first quarter of 2026, which he called “a major milestone for us as we aim to diversify from our hydrocarbons-based industry”.

Visitor numbers are up 8 percent year-on-year and spending has reached about SAR83 billion, growth he attributed mainly to domestic demand, despite regional turbulence.

The period also included the Hajj season.

“The first phase was about opening the sector, building demand, and capturing global attention. The next phase of our project is about matching supply to demand, improving standards, sequencing development intelligently and building complete destination ecosystems, not just isolated assets,” Abdulhadi said.

Further reading:

• Everything you need to know about Saudi Arabia’s giga-projects
• Saudi Arabia’s economy in numbers
• Investors crave normality before backing the Gulf

The minister admitted that project execution could improve within the tourism sector: destination management companies, hotels, and airlines are “currently… all working in silos,” he said.

Saudi Arabia has the largest tourism development pipeline in the Middle East, with more than 200,000 hotel keys expected by 2030.

Nearly half of the tourism sector’s project pipeline is now privately funded, Abdulhadi said.

More than 50 hotel brands and 40 significant investors have entered the market since 2020, he added.

Major hotel groups are “doubling” their room counts in the kingdom by 2030-2035, Abdulhadi said, making Saudi Arabia their top or second-largest growth market globally. The country is set to host Expo 2030 and the Fifa World Cup in 2034.

He added that Saudi Arabia’s second quarter tourism figures, due to be released soon, will also show resilient performance, particularly compared with neighbouring states.

Having a strong domestic market means that businesses are able to perform “more sustainably, stably, and focus on [inbound] growth opportunities,” he said.

“We’ve shown that the Saudi traveller is a good customer.”