Saudi Arabia set for surge in demand for short-term rentals

Tourism drive, development of major projects and opening of new rental portal expected to boost the sector

Tourism is a big part of Saudi Arabia's Vision 2030. Pictured, Riyadh. Reuters

Saudi Arabia is set for a big rise in demand in short-term rentals, according to property management company Frank Porter.

The kingdom aims to be a top-five global tourism destination by 2030 as the country's leadership opens up the country to foreign tourism and investment.

With citizens now allowed to operate Airbnb-style property rentals after a new portal similar to the global lettings marketplace was announced last month, the sector is also expected to grow quickly.

“By funding key projects such as their imminent airline, RIA, as well as their coming futuristic city ‘Neom’, they are sure to attract a new wave of curious tourists looking for short term rentals in [Saudi Arabia],” Anna Skigin, chief executive of Frank Porter told The National.

“The accelerated demand for short-term rentals will drive industry growth as more investors will buy multiple properties to rent them out in the short-term market. This accelerated growth will benefit [Saudi Arabia], property investors and visiting tourists as they will have increased choice when it comes to accommodation.”

She said the expansion of short-term rentals will be similar to that of the UAE. Last year, Dubai was ranked as one of the most profitable cities for Airbnb landlords.

“Saudi Arabia can use the growth of the Dubai tourism and expat markets to encourage more visitors, highlighting the fact they are connected by a short, direct flight,” Ms Skigin said.

“Saudi is determined to be the next tourist destination, just as Dubai was, and is investing heavily into making this a reality.

“When it comes to countries with high expat numbers such as Dubai and KSA, the inherent transient nature, as well as the need for flexibility, has dramatically increased the demand for short-term rentals in 2023.

“The surge in travel post-Covid over the past year has seen the prices of hotel stays increase, which has further escalated demand for short-term rental properties.”

In the second quarter of 2022 — the last available data — the kingdom welcomed 3.6 million visitors, a 575 per cent increase over the previous year, according to figures released by the Ministry of Investment.

There was also an increase of 42.3 per cent in domestic tourism.

The National Tourism Strategy of Saudi Arabia aims to attract 100 million tourists by 2030.

The kingdom is developing a number of tourism projects, including Neom, a $500 billion futuristic city featuring a nature reserve, coral reefs and heritage sites on several islands along the Red Sea, and Qiddiya, a huge entertainment and sports project in Riyadh.

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Saudi Arabia megaprojects 2023: Neom, AlUla and more

The Line is one of 10 districts in Saudi Arabia's $500 billion Neom megacity. Photo: Neom

Sindalah Island is set to be the first destination open to the public within the Neom mega project. Photo: Neom

Trojena, a mountain tourism destination, will be the first major outdoor skiing site in the GCC. Photo: Neom

Oxagon, part of the Neom mega project, is a futuristic new industrial city in the sea. Photo: Neom

AlUla is a budding tourist magnet in the north-western Madinah region. AFP

When it opens in 2023, Nujuma, a Ritz-Carlton Reserve, will form part of The Red Sea project. Photo: Marriott International

Amaala has unveiled the design for its Triple Bay Yacht Club. Photo: Amaala

Qiddiya City is an entertainment development project to be established in Riyadh.

Salwa Palace is the largest standing structure in the historic city of Diriyah. Photo: Diriyah Gate Development Authority

A screen grab of aerial footage of the King Salman Park in Riyadh. The project is set to become the world’s biggest urban park.