Saudi Arabia’s tourism sector is witnessing an unprecedented transformation, driven by strategic investments from the Tourism Development Fund. In line with Vision 2030, the Kingdom is opening doors to global travelers and supporting sectors vital to the tourist experience, such as Entertainment, Accommodation, Experience, Mixed Use, and Retail. This growth isn’t just about increasing the number of projects; it’s about fostering innovation and creating a space where startups can thrive. Here’s an in-depth look at the highest-potential sectors for startups and the unique opportunities they offer.


Sector Insights and Startup Opportunities
1. Experience Sector
- Investment Growth: This sector saw a substantial rise in project count, from 3 in 2021 to 4 in 2022, and an impressive jump to 20 projects in 2023. The accumulated project value soared to SAR 1.25 billion by 2023, reflecting a keen focus on providing immersive and unique tourist experiences.
- Opportunities for Startups:
- Cultural Tourism: Startups can offer curated, authentic Saudi cultural experiences, such as guided historical tours, culinary adventures, and desert safaris.
- Eco-Friendly Tourism: There is growing interest in sustainable travel options, opening doors for eco-lodges, nature conservation tours, and environmentally-conscious travel services.
- Digital Experience Platforms: Developing apps and platforms that connect tourists with locals for unique experiences can enhance the sector’s appeal.
- Example Opportunity: A startup providing customizable “Experience Boxes” with curated local experiences or virtual reality previews could tap into this expanding market.
2. Retail Sector
- Investment Growth: From a humble SAR 6.5 million in 2021, investments in the retail sector grew dramatically to SAR 891.3 million in 2022, with five active projects by 2023. This surge underlines the importance of retail in complementing the tourism experience and catering to the needs of visitors.
- Opportunities for Startups:
- Pop-Up Retail Solutions: Seasonal shops and kiosks are ideal for catering to fluctuating tourist seasons, especially during festivals and events.
- Retail Technology: Inventory management solutions, digital payment systems, and customer service chatbots can modernize local stores and improve customer experience.
- E-Commerce for Local Artisans: Developing platforms that connect tourists with local artisans, allowing them to order souvenirs online even after they leave the Kingdom.
- Example Opportunity: Startups could establish a platform that allows tourists to purchase and ship Saudi-made products to their home countries, keeping the shopping experience alive even after their trip.
3. Accommodation Sector
- Investment Growth: As one of the highest-valued sectors, accommodation has grown steadily, with project values reaching SAR 2.7 billion by 2023. The number of projects increased from 7 in 2022 to 9 in 2023, signaling high demand for diversified lodging options.
- Opportunities for Startups:
- Alternative Lodging: Unique accommodation types, like eco-friendly glamping sites or culturally immersive stays, offer alternatives to traditional hotels.
- Hospitality Technology Solutions: Services like automated check-in, virtual concierges, and booking platforms tailored to Arabic-speaking tourists could streamline and enhance the guest experience.
- Property Management Services: Startups specializing in property management, particularly for short-term rentals, can assist property owners in maintaining high-quality service.
- Example Opportunity: A startup could create a platform for booking short-term, culturally immersive stays in Saudi heritage houses, providing travelers with a unique and authentic experience.
4. Entertainment Sector
- Investment Growth: Although project counts fluctuated, with a decrease from 2 in 2022 to 1 in 2023, accumulated project values remained substantial, highlighting the sector’s long-term relevance. In 2023, the cumulative investment in entertainment projects reached SAR 682 million.
- Opportunities for Startups:
- Family-Centric Entertainment: Saudi Arabia’s emphasis on family values creates demand for family-friendly attractions like interactive museums, VR gaming zones, and educational entertainment centers.
- Event Management Platforms: A platform to help organize and promote local events could attract both tourists and residents, especially during cultural festivals.
- Digital and Interactive Experiences: AR/VR-based attractions and tech-driven experiences could draw tech-savvy visitors and engage the younger population.
- Example Opportunity: A startup that offers augmented reality (AR) guided tours in historical locations could provide an engaging way for tourists to learn about Saudi Arabia’s rich heritage.
5. Mixed Use Sector
- Investment Growth: The mixed-use sector has attracted consistent investment, reaching SAR 337 million in project value by 2023. These projects aim to create versatile spaces that serve multiple purposes, from retail and dining to coworking and entertainment.
- Opportunities for Startups:
- Hybrid Workspaces: Startups providing flexible coworking and co-living spaces cater to the needs of digital nomads and young professionals.
- Community Apps: Platforms focused on social connectivity and events within these mixed-use spaces could foster community-building among residents and tourists.
- Smart Building Solutions: Startups focusing on IoT-based building management, energy efficiency, and smart amenities would be well-positioned to support the growth of multi-use spaces.
- Example Opportunity: A startup offering a “smart building” app that manages room bookings, coworking space access, and event notifications for residents of mixed-use developments could add significant value.
The Startup Ecosystem and Growth Potential
Saudi Arabia’s entrepreneurial ecosystem is witnessing rapid growth. With government support, investor interest, and a youth-driven startup culture, the Kingdom is positioned as a prime location for innovative companies to flourish. Startups can leverage tourism investments to create valuable services that not only enhance the visitor experience but also drive economic growth.
Conclusion
The sectors supported by the Tourism Development Fund—experience, retail, accommodation, entertainment, and mixed-use—are ripe with opportunities for startups. As Saudi Arabia continues to prioritize tourism, these sectors will see sustained demand, making this the ideal time for innovative entrepreneurs to establish solutions in these growing fields. With Sookg’s in-depth market insights, aspiring startups have the data and resources they need to make informed decisions and capitalize on these trends.