Saudi Arabia’s Tourism Boom: IHG Expands with New Hotels in Riyadh and Al Khobar

Saudi Arabia’s fast-growing tourism sector is gaining new momentum as IHG Hotels & Resorts, one of the world’s largest hospitality groups, announces the development of two new properties — Crowne Plaza Al Khobar Al Bandariyah and Holiday Inn Riyadh Rose Yard. The expansion marks another step toward realizing the Saudi Vision 2030, which positions tourism as a central pillar of the Kingdom’s economic diversification strategy.

The dual management agreement between IHG and Mosa Bin Abdul Aziz Al-Mosa and Sons Real Estate Holding underscores a growing wave of international investment in Saudi Arabia’s hospitality infrastructure — a sector expected to generate hundreds of thousands of jobs and contribute billions to GDP by the end of the decade.

Strategic Growth: Why IHG Is Investing in Saudi Arabia

Saudi Arabia is undergoing one of the world’s most ambitious tourism transformations. Driven by Vision 2030, the Kingdom aims to attract 100 million tourists annually by the end of the decade. The government’s large-scale projects — including The Red Sea Development, NEOM, and Al-Ula — are reshaping the tourism landscape, while the private sector is expanding capacity to meet rising demand.

IHG’s decision to open two new hotels comes at a pivotal time. Riyadh, as the political and business hub of the Kingdom, is seeing increased demand for business travel and international conferences. Al Khobar, meanwhile, is evolving into a high-end leisure and commercial destination on the Arabian Gulf. The two properties are designed to capture both segments, combining IHG’s global hospitality standards with local cultural authenticity.

Crowne Plaza Al Khobar: A New Landmark for the Eastern Province

Scheduled to open in Q1 2027, the Crowne Plaza Al Khobar Al Bandariyah will feature 232 guest rooms and occupy a prime location near the Corniche, with convenient access to Dammam City and King Fahd International Airport.

The property is designed to cater to both business travelers and leisure guests, offering state-of-the-art meeting facilities, conference spaces, and a variety of dining options. Leisure amenities will include wellness areas, fitness centers, and family-friendly spaces.

As one of IHG’s premium brands, Crowne Plaza combines upscale comfort with productivity-driven design — making it ideal for corporate guests, long-stay travelers, and weekend visitors exploring the Gulf coast.

Holiday Inn Riyadh Rose Yard: Comfort in the Heart of the Capital

The upcoming Holiday Inn Riyadh Rose Yard, with 106 rooms, will target business professionals, families, and international tourists seeking affordable yet high-quality accommodation in the capital.

Strategically located for easy access to Riyadh’s financial district and cultural landmarks, the hotel will feature modern interiors, family-friendly amenities, and flexible dining options. Holiday Inn’s brand promise of comfort and accessibility aligns perfectly with Riyadh’s growing demand for midscale hospitality.

The property will also offer corporate meeting spaces and business services, supporting Riyadh’s expanding role as a center for international business and innovation.

Supporting Vision 2030: Building a Global Tourism Hub

Saudi Arabia’s hospitality industry is now one of the fastest-growing in the world. The country’s investment-friendly environment, combined with infrastructure upgrades and visa reforms, has made it easier for global brands like IHG, Accor, Hilton, and Marriott to expand their presence.

By 2030, Saudi Arabia aims to have 500,000 new hotel rooms, with a strong focus on sustainability, cultural integration, and innovation. IHG’s entry into Riyadh and Al Khobar strengthens the country’s capacity to serve diverse segments — from luxury and business to affordable family travel.

Expert Insight: International Investment on Saudi Arabia’s Tourism Future

According to analysts from International Investment, IHG’s expansion in Riyadh and Al Khobar demonstrates growing investor confidence in the Saudi market:

“The development of new IHG properties reinforces Saudi Arabia’s position as a rising global tourism hub. Strategic projects like these not only enhance the country’s hospitality capacity but also accelerate private-sector participation — a key component of Vision 2030. The focus on both business and leisure travel shows a balanced, sustainable growth model that could make Saudi Arabia one of the leading destinations in the Middle East by 2030.”

Nevertheless, according to experts, there are also challenges in Saudi Arabia’s tourism market:

“Although Saudi Arabia is making massive investments in tourism, there are serious gaps in infrastructure — including logistics, transport connections, accommodation, and tour services. Luxury resort projects require enormous financial resources, and so far, the scale of infrastructure development does not always match the country’s ambitions.”

Studies show that for many potential travelers, safety, accessibility, cultural comfort, and visual appeal are key factors — and Saudi Arabia is still working to strengthen these areas.

Previously, the country’s focus was primarily on religious tourism (Hajj and Umrah). Now the goal is to diversify offerings by developing eco-tourism, cultural tourism, and business travel. However, this shift brings challenges: seasonality and concentration on narrow market segments create risks — visitor peaks can overload infrastructure, and revenue models may lack long-term stability.

The Minister of Tourism emphasized that one of the key priorities is sustainability — social, economic, and environmental. He noted that regions rich in natural and cultural heritage need protection from over-tourism, as insufficient preparation could lead to site degradation and a decline in visitor interest.

Tourism growth also depends on qualified human resources — guides, tour operators, and hotel professionals. Saudi Arabia still faces challenges in training and localizing its workforce. The gap between high ambitions and the availability of skilled professionals can slow down project implementation.

Outlook: Sustainable Growth and New Quality Standards

Thanks to IHG’s investments, Saudi Arabia is strengthening its image as a modern, welcoming, and technologically advanced tourist destination. New hotels in Riyadh and Al Khobar will create new jobs, expand accommodation choices, and help the country realize its Vision 2030 potential.

For travelers, this means more lodging options, higher service quality, and access to new travel routes. Saudi Arabia is steadily moving toward becoming a global hub of hospitality. However, it’s important to note that development is concentrated in specific “growth zones” — Riyadh, the Red Sea, and Al-Ula — while other regions remain less developed. This creates a risk of uneven progress, social pressure, and economic disparity.

Experts at International Investment believe that despite the nationwide drive for rapid growth, the long-term success of Saudi Arabia’s tourism sector will depend not only on large-scale flagship projects but also on consistent “internal work”: improving infrastructure nationwide, developing human capital, enhancing international perception, diversifying tourism products, and ensuring sustainability.

“If ambitions are not backed by operational execution — infrastructure, logistics, workforce, and brand image — the risk of disappointment among both tourists and investors increases,” analysts note.