JEDDAH: Saudi Arabia must attract more international visitors from key global markets to unlock the full economic potential of its rapidly expanding tourism sector, industry leaders highlighted during the Future Hospitality Summit in Riyadh.
Speaking during a panel titled “Investing into the Kingdom: Connecting Global Capital with Saudi Arabia’s High-End Hospitality Pipeline,” Amin Ismail, managing director at Certares, said sustained demand from domestic travelers has helped fuel investment in new tourism destinations and hospitality assets.
The discussion focused on investment opportunities in Saudi Arabia, emphasizing the importance of local partnerships, such as with the Public Investment Fund and Tourism Development Fund, to catalyze institutional investment.
The panel highlighted the need for authenticity and operating capability in luxury investments, with a focus on the potential of the nation’s tourism sector, particularly in attracting the global market.
“International demand is key. I think Saudi has a very robust domestic tourism, and it’s helped sustain some of these new developments and assets and destinations that are being developed,” Ismail said.
The managing director added that while Saudi Arabia has invested heavily in tourism infrastructure, realizing the full return on those investments will depend on attracting more international visitors from key source markets, including Western Europe, North America, and Africa.
“Western Europe, where we have a lot of distribution, is key, Saudi Arabia is a destination that Italians, French, UK want to travel and North America, where we have very strong distribution,” he said.
He added that expanding both the corporate travel and luxury tourism segments will be critical to unlocking long-term value in the Kingdom’s travel and tourism sector. He expressed hope that the partnership under consideration would serve as a catalyst for accelerating growth in both areas.
Investors see Saudi Arabia’s efforts to build an authentic, culturally driven luxury tourism brand as a major opportunity, arguing that the Kingdom should define its own identity rather than emulate established global destinations.
Jaume Tapies-Ibern, founder and co-chairman of Aina Hospitality, said: “We feel that Saudi Arabia must be authentic, should not copy others if they want to really succeed and attract these people that they will come, because Saudi Arabia is a destination.”
He added: “We see luxury evolving differently depending on the country,” adding that the Kingdom is now beginning to define its own form of luxury.
“Our goal as investors is to convince that the fundamentals are here and the opportunity, investment opportunity, is there to catch it,” he added.
Speaking about the conditions institutional investors generally seek before deploying larger pools of capital in Saudi Arabia, Ismail said that while many investors already have a presence in the region, scaling investments in the Kingdom often depends on partnering with a local co-investor to improve alignment, reduce risk, and facilitate execution.
He pointed to sovereign wealth funds and development-focused institutions, including PIF and the TDF, as the types of partners international investors typically seek when entering the Saudi market.
“There are partners, and we have met them, whether it is the PIF or the TDF,” he said, adding that while no agreements have been finalized yet, discussions are ongoing and he hopes a deal can be concluded in the near future.
Founder and CEO of Millat Group, Hamza Farooqui, said market success in attracting capital over the next three to five years will depend on stronger operating capability rather than financial engineering.
“I think I put it into a simple thing: operating capability. You can’t build businesses anymore on smart financial engineering,” he said.
Farooqui added that investors are increasingly demanding authenticity and sustainable business models, noting that “overcapitalized assets … you’re not going to get the IRR (internal rate of return) in year five, seven to the exit, it’s not going to work.”
The Millat Group CEO said Saudi Arabia needs to strengthen its ecosystem of operators who understand how to deploy capital effectively, adding that the market must move through a full investment cycle that includes origination, thesis-building, and successful exits.
“I think that’s also going to be very, very important to recycle the proof of institutional capital,” he said, adding that with these elements in place, the Kingdom remains “that frontier and that opportunity center.”
