During the Future Hospitality Summit in Riyadh, industry leaders emphasized that Saudi Arabia must attract more international visitors from key global markets to unlock the full economic potential of its rapidly expanding tourism sector. The panel, titled “Investing into the Kingdom: Connecting Global Capital with Saudi Arabia’s High-End Hospitality Pipeline,” brought together investors and executives to discuss opportunities and challenges.
Domestic Demand Fuels Initial Investment
Amin Ismail, managing director at Certares, noted that sustained demand from domestic travelers has helped fuel investment in new tourism destinations and hospitality assets. “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 panel highlighted the importance of local partnerships, such as with the Public Investment Fund (PIF) and Tourism Development Fund (TDF), to catalyze institutional investment. Ismail stressed 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.
Targeting Western Europe and North America
“Western Europe, where we have a lot of distribution, is key. Saudi Arabia is a destination that Italians, French, UK want to travel to, and North America, where we have very strong distribution,” Ismail said. He added that expanding both 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 a partnership under consideration would serve as a catalyst for accelerating growth in both areas.
Authenticity Over Imitation
Investors see Saudi Arabia’s efforts to build an authentic, culturally driven luxury tourism brand as a major opportunity. Jaume Tapies-Ibern, founder and co-chairman of Aina Hospitality, argued that the Kingdom should define its own identity rather than emulate established global destinations. “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 said.
Tapies-Ibern added: “We see luxury evolving differently depending on the country,” noting 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.”
Local Partnerships Essential for Institutional Investment
Ismail elaborated on the conditions institutional investors generally seek before deploying larger pools of capital in Saudi Arabia. While many investors already have a presence in the region, scaling investments 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 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,” Ismail 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.
Operating Capability Over Financial Engineering
Hamza Farooqui, founder and CEO of Millat Group, stressed that 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.” He said Saudi Arabia needs to strengthen its ecosystem of operators who understand how to deploy capital effectively, and 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.”
