The News
Saudi Arabia’s push to keep more spending inside the kingdom appears to be working.
Central bank data showed a surge in summer retail and services activity as businesses offer better entertainment options and shopping promotions as alternatives to vacations abroad. Point-of-sale transactions rose 42% between June and August 2024 compared to the same period in 2021, and spending in the first three weeks of June this year has already surpassed the entire month of June last year.
The increase this year coincides with the Saudi Tourism Authority’s “Color Your Summer” campaign, which aims to attract over 41 million visitors and drive 73 billion Saudi riyals ($19.5 billion) in tourism revenue this season. The initiative has resulted in the addition of more than 1 million domestic flight seats and around 600 new events nationwide, from concerts and nature excursions to the Esports World Cup.
That shift is visible in cooler cities like Abha and Albaha, according to Nouf Alsharif, the head of economic research at Riyadh-based Jadwa Investment. She told Semafor that these destinations, previously seen as second-tier cities, were seeing growing demand from both Saudis and Gulf visitors, helped by the rise of low-cost airlines like Flyadeal and Flynas and the increasing use of rail for domestic travel. “Accessibility is changing behavior,” she said.
In this article:
Manal’s view
There was a time when you didn’t need a calendar to know it was summer in Saudi — the streets told you. Riyadh and Jeddah went quiet. This has changed, but not for all. The wealthy are still escaping the heat: Marbella’s beach clubs play Abdulmajeed Abdullah (Saudi Arabia’s Taylor Swift), the south of France is packed with supercars with Gulf plates, and the crowds at London’s Knightsbridge cafés mirror Riyadh’s Boulevard.
But for the middle class, staying at home is an option. Many used to visit Bahrain and Egypt for affordable escapes. Now? They go to Abha, where the air is cooler, or Umluj, where islands that were once inaccessible are a short boat ride away from Jeddah’s coast. Places that were either off-limits or simply didn’t exist are opening up. AlUla, once considered taboo due to its pre-Islamic heritage and restricted access, is now part of the summer circuit.
Room for Disagreement
While options have broadened, is it by choice or necessity? Many Saudis are staying local as costs rise — real estate, education, and transport prices are all up, with rents seeing the sharpest jump at nearly 10% year-on-year — not because Egypt’s coast lost its appeal. Median household income is around 11,000 Saudi riyals a month ($2,933) according to the General Authority for Statistics. The rise in domestic spending over the summer may also be an indicator that household budgets are stretched.
Notable
- Saudi Arabia is betting big on high-end tourism, the Financial Times reports, highlighting the kingdom’s $1 trillion-plus pivot toward upscale travel, with new developments along the Red Sea coast, luxury mountain resorts, and restorations in AlUla positioned to attract both Saudis and international tourists.
- The shift is visible on the ground; The New York Times produced a photo essay last year that shows Saudis vacationing at newly accessible beach resorts and heritage sites.