The Construction and Tourism Industries Fuel Global Business Expansion
The Kingdom’s positive investment climate, favorable business initiatives, and record-breaking achievements give confidence to aspiring entrepreneurs and those looking to scale their operations. This trend is particularly evident in Saudi’s two high-performance sectors: construction and tourism.
In 2023, Saudi Arabia marked a historic milestone, reaching its goal of attracting 100 million tourists by 2030, 7 years early. It also recorded the highest-ever inbound tourism spending of $33 billion while ranking first as the fastest-growing tourist destination according to the World Tourism Barometer report issued by the United Nations Tourism.
Simultaneously, the construction sector in Saudi Arabia dominated the whole MENA region with a remarkable 67% percent of the total project value, amounting to approximately $44 billion in just the first half of 2023. Saudi Arabia’s economic shifts are increasingly gaining global attention – key players in the global market have already acted on the first-mover advantage by expanding their operations to the Kingdom.
Market Leaders Leverage Saudi Arabia's Booming Construction and Tourism Sectors
Global and regional leaders in the construction and tourism sectors are taking advantage of the country’s economic diversification efforts. This enthusiasm is largely fueled by the Kingdom's positive investment climate, attractive tax regulations, and abundant opportunities for business partnerships and government-sponsored projects.
Market entry partners like AstroLabs have played a vital role in helping international companies set up in Saudi, ensuring their successful expansion and integration. Grankraft and ADB SAFEGATE are two such examples to have shared their story of how expert guidance and local insights have enabled them to realize their ambitious business objectives in the country.
With over two decades of experience, Grankraft's entry into the Kingdom’s construction and tourism markets was marked by signing a contract to “design and build” the iconic Sheybarah Hotel project involving over 73 stainless-steel villas, as part of Saudi’s giga project, the Red Sea Development.
The CFO of Grankraft shared his view on successfully expanding to a new market by saying, “I would recommend any company that is looking to expand to Saudi to find a local market entry partner like AstroLabs who can identify the needs from the authorities and use their local know-how to fast-track the process of expansion for businesses.”
Similarly, ADB SAFEGATE, a global leader in airport performance solutions, leveraged local expansion partners to enter the Saudi Arabian market. Recognizing the growth potential amidst Saudi Arabia's economic reforms, ADB SAFEGATE aimed to be closer to its customers, providing better support and technical services.
"Partnering with AstroLabs helped us focus on our core business, significantly enhancing the overall value of our company," reflected Ammar Momani, the company’s Sales Director.
As Saudi Arabia continues to open doors for global and regional companies, the country transforms into an ideal place to start a business.
Future Opportunities in Emerging Sectors
The Kingdom’s massive projects at the intersection of construction and tourism are bringing a lot of challenges inherent in such rapid and large-scale development. To overcome those challenges the country is favoring sustainability, artificial intelligence, and intelligent solutions leveraging new technologies. This makes Saudi Arabia an increasingly attractive destination for investors who prioritize positive societal and environmental impacts.
Within the construction sector, such trends translate to eco-friendly materials, energy-efficient designs, and modular construction methods that save costs while reducing the project’s carbon impact. For example, the Red Sea project is set to grow more than 30 million plants by 2030, and deliver a 30% net conservation benefit by 2040 across the island and Amaala, while attracting 1 million annual visitors by 2030.
The growing demand for smart infrastructure, IoT solutions in construction and facility management, and virtual reality experiences in tourism are creating niche markets ripe for investments in innovative business ideas.
In addition, renewable energy projects, particularly solar and wind power, are gaining momentum within the construction sector, driven by the Kingdom's commitment to expand its renewable energy portfolio. By the end of the year, Saudi Arabia plans to tender another 8 GW of renewable energy projects.
The new announcements, such as the development of the world's first "Dragon Ball" theme park and the construction of the innovative Treyam resort are the latest examples of the country’s success in building a symbiotic ecosystem that blends architectural innovation with unique tourist attractions.
For companies looking to make their mark, the time is now to explore the new trends shaping these sectors and leverage Saudi’s efforts at becoming a global entrepreneurship community.
Get in touch with a Saudi setup consultant here to start your expansion journey.
