Is Saudi Arabia’s Tourism Sector a Goldmine for Tech Startups?

Are you from Saudi Arabia? Want to build a tech startup in SA?

If your answer is a big ‘Yes’, then right now, Saudi’s Tourism Sector is the right space for you to enter and this article will tell you ‘Why’.

Saudi Arabia’s Tourism sector is on a remarkable transformation journey, breaking all stereotypes!

Do you know what’s the mind-blowing part?

A golden opportunity for tech startups is awaiting in this journey, and we are here to make you aware of what is going on in the kingdom and what opportunities you can avail.

Saudi Arabia’s vision for tourism has become stronger with the Vision 2030 Plan. With this plan, the kingdom is mainly focusing on diversifying.

‘Diversifying’ in terms of what?

There's a general perception around Saudi Arabia that it is dependent on its Oil reserves, and it is all set to break. The kingdom is proactively diversifying its investments in other sectors too. Among all these sectors, the tourism sector has seen a major level of growth.

For entrepreneurs, this transformation shows a great spectrum of business avenues and an evolving consumer base.

These Numbers prove the growth trajectory!?

• Last year, in 2023, Saudi Arabia generated a revenue of $66 Billion, as reported by Princess Haifa in a Bloomberg Interview. Further this year, it is expected to reach up to $85 Billion and it’s a big number!

• This projection is valid, as Saudi has already witnessed an increase in visitors reaching 60 million which is up 22.9% from 2023, that too, only in the first quarter of 2024.

• If we talk about visitors, then International visitor spending has increased by almost 57% to reach SAR 227.4BN, which breaks the previous record of SAR 93.6BN. At the same time, domestic visitor expenditure increased by 21.5% to SAR 142.5BN.

• Further considering the observations of the World Travel & Tourism Council (WTTC), they expect that this sector is going contribute SR 836.1 Billion to the GDP of Saudi Arabia, which is almost 16% of the economy.?

In short, it portrays two impressive things:

1. First, these figures reflect the immense potential of the Saudi tourism sector as a lucrative market for tech startups to come up with innovative solutions to cater to the growing number of visitors.
2. Second, it also highlights the Kingdom's strategic focus on becoming a global tourism leader. The tourism sector is a key component of Saudi Arabia's Vision 2030 economic diversification efforts, due to the growing number of visitors and economic benefits it carries.?

5 Opportunities For Tech Startups In Saudi Arabia's Tourism Sector

The diversification of the economy to reduce oil reliance offers numerous opportunities for tech startups to innovate and contribute. Below are detailed insights into the various opportunities available for tech startups in this dynamic environment.

1. Digital Infrastructure Development

The Saudi government is investing heavily in digital infrastructure to support the tourism sector. This includes:

• Smart Tourism Solutions

Startups can develop platforms that provide various services, such as travel booking systems, itinerary planning, and real-time updates on local attractions. The Saudi Tourism Authority (STA) is already focusing on AI-based solutions to provide personalized recommendations to travelers based on their preferences and interests, creating a demand for tech solutions that enhance visitor experiences.

• Tourism Data Lab

The STA and Visa have signed an MOU at the Arabian Travel Market 2023 to launch a Tourism Data Lab.? With this, Startups can leverage the data to create analytics tools that help businesses understand tourist behavior and preferences, leading to personalized offerings.?

2. Travel Tech Innovations

The travel tech space in Saudi Arabia has a great scope for innovation, with several areas where startups can contribute.

One of them is Mobile Application which is the most convenient thing for travelers in today’s digital era. Developing a mobile app that provides facilities like travel planning, flight, and hotel booking can greatly enhance the tourist experience and these platforms are also in high demand. The travel app industry generated a revenue of $629 billion in 2023, with hotels and accommodation responsible for most of that.

Startups can partner with a professional travel app development company to create apps integrated with AR and VR experiences. It will allow potential visitors to explore Saudi Arabia's rich cultural heritage and natural beauty virtually. This can serve as a powerful marketing tool to attract tourists.?

3. Travel Experience Platforms

Tourists generally look for unique and personalized experiences whenever they use an online platform, especially when it comes to traveling.

Tech startups can capitalize on this by creating experience-centric platforms. They can develop applications that connect travelers with local guides who offer services like cultural immersions, culinary tours, or adventure activities. For instance, a platform could feature local experts who curate off-the-beaten-path experiences, providing travelers with authentic insights into Saudi culture and heritage.

Startups can also focus on niche experiences by targeting specific interests, such as eco-tourism, adventure tourism, or wellness retreats, allowing them to cater to different traveler demographics. This can help startups differentiate themselves in a competitive market.

4. Transportation Services

Travelers visiting Saudi will need a mode of transportation, some travel enthusiasts even prefer to rent a car to explore the place. For them, Ride-sharing can be the best thing.?

Startups can opt for taxi app development to build apps that facilitate ride-sharing or shuttle services specifically for tourists, providing convenient transportation options.

You can also build a car rental platform where people can rent vehicles, drive them around the roads of Saudi and enjoy their trip. This provides services not only to visitors but also to the local population.?

5.? E-commerce Platforms?

As the number of tourists visiting the Kingdom continues to rise, so does their spending power, creating a lucrative market for e-commerce businesses.?

We have already discussed the rising expenditure of visitors, and with this, the demand for products and services is also increasing. Tourists often prefer the convenience of shopping online before or during their trips. E-commerce platforms allow them to explore and purchase items from the comfort of their accommodations, reducing the time spent searching for local stores.

E-commerce platforms with various travel-related services, such as hotel bookings, transportation, and guided tours, can provide a one-stop shop for visitors. It enhances the overall travel experience and encourages higher spending. Thus, it makes sense for you to go for e-commerce app development to capitalize on this opportunity.

Government Support and Funding

$13 Billion Investment!

Yes! That’s the amount of private sector investment, Saudi Arabia has secured for its tourism industry.

The Saudi government is taking steps to support the growth of tech companies. In 2024, the Kingdom announced investments worth $888 million to support the local tech startup and venture capital sector, with a focus on industries such as digital payments, e-gaming, and artificial intelligence (AI).

Additionally, several initiatives have been launched by the Saudi government to support the growth of tech startups.

• The National Technology Development Program (NTDP) has launched five initiatives. One of them is "Fuel", a $266 million fund to support VC funds investing in emerging technologies.?
• Another one is the "Artificial Intelligence Mission", which has $266 million allocated for AI research and development.
• A $500 million fund was established by investment firms such as Investcorp, with a $35 million contribution from Saudi Venture Capital Co. The fund's primary objective is to invest in Saudi businesses that are in their growth stage.

These initiatives show that the Saudi government has full confidence in AI.

Your startup can also get the government’s support, and for that, choosing a company that provides AI development services can be beneficial for you. So with the government funding and expertise of the development company, you can bring your vision into reality.?

Conclusion?

Saudi Arabia's tourism sector presents great opportunities for tech startups looking to get started in a rapidly growing market.?

What makes this growth faster, is the strong government support, a growing pool of investors, and a talented workforce, that offers the grounds for innovation and growth.

Using emerging technologies, embracing cultural diversity, and building strategic partnerships, tech startups can capitalize on the rise of tourism and contribute to the Kingdom's economic transformation. The future looks bright for those who are willing to take the leap and explore the vast potential of Saudi Arabia's tourism sector.