Saudi Arabia’s Public Investment Fund is intensifying its efforts to diversify the nation’s economy by expanding tourism investments beyond the capital city, Riyadh. This strategic move aligns with the Kingdom’s Vision 2030 objectives, aiming to transform Saudi Arabia into a global tourism hub.
In July 2023, PIF established the Saudi Tourism Investment Company, known as Asfar, to spearhead the development of new tourism projects across various cities. Asfar’s mandate includes creating attractive destinations featuring hospitality venues, tourist attractions, retail outlets, and food and beverage establishments throughout the country.
Furthering this initiative, PIF launched Adeera in December 2024, a hotel management company dedicated to developing indigenous Saudi hotel brands. Adeera’s goal is to construct new hotels and implement training programs for Saudi nationals, contributing to the Kingdom’s ambition of attracting 150 million tourists annually.
PIF’s investment strategy also encompasses the development of large-scale projects outside Riyadh. Notably, the Red Sea Project aims to transform 90 islands into a luxury resort destination, with a £15 billion investment. This project, part of the broader Vision 2030 plan, seeks to diversify the economy beyond oil dependence and establish Saudi Arabia as a premier international tourist destination.
In addition to these domestic ventures, PIF is extending its reach internationally. In August 2024, PIF acquired a 49% minority stake in Rocco Forte Hotels, a luxury hotel chain, valuing the company at £1.4 billion. This investment will facilitate the development of five new hotels in Europe, including properties in Milan, Sardinia, Noto, and Naples.
To bolster private sector involvement, PIF is offering SR40 billion in investment opportunities through its private sector platform. This initiative aims to strengthen local industries, supply chains, and business growth, thereby enhancing the overall tourism infrastructure.
Saudi Arabia is targeting SR9 trillion in private sector investments, supported by an initial SR3 trillion infusion from PIF. This substantial investment is intended to stimulate economic diversification and reduce the Kingdom’s reliance on oil revenues.
In a significant policy shift, Saudi Arabia has opened its holy cities, Makkah and Madinah, to foreign investment in real estate. This move is expected to support the development of these cities, which are among the Kingdom’s most lucrative tourism destinations, particularly for religious travelers.
PIF’s comprehensive approach to tourism development includes the creation of transformative giga-projects such as Qiddiya, a cultural, sports, and entertainment landmark, and Diriyah, a UNESCO World Heritage Site. These projects are designed to offer innovative and immersive experiences, contributing to the Kingdom’s cultural and historical tourism appeal.
The Tourism Development Fund , with initial capital of $4 billion, plays a pivotal role in facilitating private investments in the tourism sector. TDF collaborates with various stakeholders to finance projects that align with the Kingdom’s tourism objectives, thereby driving growth and diversification.
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