Saudi Arabia Leads Middle East Hotel Pipeline

Saudi Arabia now has around 110,000 hotel rooms under development, accounting for roughly half of the entire Middle East hotel-development pipeline. Projects span the Kingdom's key cities and destinations, including Riyadh, Makkah, Madinah, Diriyah, NEOM, the Red Sea, and AMAALA.

The surge in supply reflects sustained investment in hospitality as the country expands its tourism capacity. For investors and operators, understanding the two-track licensing process is essential before opening a property.

How hotel licensing works

A tourism-accommodation-facility licence is applied for through the Ministry of Tourism's electronic services. Applicants must be Saudi citizens or foreign investors holding a valid investment licence. Licence fees are based on room count and validity period. For properties with 500 or more rooms, fees are SAR 12,500 for one year, SAR 17,500 for two years, and SAR 22,500 for three years. For 300 to 499 rooms, fees are SAR 10,000 for one year, SAR 13,500 for two years, and SAR 17,000 for three years.

Separately, the municipal licence is handled through Balady, covering the required business and building permits. Typical requirements include the establishment record, activity and location details, the lease or ownership document, the building permit, and applicable Civil Defense safety documentation. The Ministry of Tourism accommodation licence and the Balady municipal licence are two distinct requirements.

What changed for operators

Municipal fees for issuing commercial-activity licences for hotels, furnished apartments, and residential resorts were cancelled effective 4 September 2024, easing costs for new and existing operators.

For residents and expats, the growing pipeline signals more employment, hospitality, and service opportunities across the Kingdom's tourism hubs in the years ahead.

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