Tourists in Al Ula, Saudi Arabia. The kingdom recorded a 156 per cent increase in tourist arrivals last year compared with 2019, according to a UN World Tourism Organisation report. PA
Tourists in Al Ula, Saudi Arabia. The kingdom recorded a 156 per cent increase in tourist arrivals last year compared with 2019, according to a UN World Tourism Organisation report. PA
Tourists in Al Ula, Saudi Arabia. The kingdom recorded a 156 per cent increase in tourist arrivals last year compared with 2019, according to a UN World Tourism Organisation report. PA
Tourists in Al Ula, Saudi Arabia. The kingdom recorded a 156 per cent increase in tourist arrivals last year compared with 2019, according to a UN World Tourism Organisation report. PA

Tourist arrivals in Saudi Arabia exceeded pre-pandemic levels in 2023, UN report says


Deepthi Nair
  • English
  • Arabic

Saudi Arabia recorded a 156 per cent increase in tourist arrivals last year compared with 2019 amid the recovery of the tourism sector following the pandemic, according to Saudi state news agency SPA, which quoted a World Tourism Organisation report.

The Middle East is the only region that achieved tourism growth over pre-pandemic levels, receiving 122 per cent more tourists last year than in 2019, the report from the UN agency said.

“The global rate of tourism recovery in 2023 stood at 88 per cent of pre-pandemic levels, registering an estimated 1.3 billion arrivals,” the report said.

“International tourism revenue reached $1.3 trillion, approaching 93 per cent of the $1.5 trillion achieved in 2019.”

Saudi Arabia, the world's biggest oil exporter, is transforming its economy under its Vision 2030 diversification agenda as it aims to reduce its dependence on oil, boost domestic industries and support jobs growth.

It is developing several large projects in line with this strategy, including Qiddiya, as well as Neom, a $500 billion futuristic city, the Red Sea Project and the Diriyah Gate heritage development.

Midway through the Vision 2030 implementation, “strong performance has been achieved against many of the economic goals”, a report by consultancy PwC in October found.

Saudi Arabia’s mega projects “have made significant progress in the last few years, moving from the conceptual phase to construction”, the report said.

The kingdom was fifth in a global ranking of international arrivals in 2023, returning to pre-Covid levels for inbound visitors and buoyed by Hajj pilgrims, investment in marketing the country as a tourism destination and efforts to diversify its economy, the Global Travel Trends report by travel analysis company ForwardKeys showed.

The kingdom followed the Dominican Republic, Colombia, Mexico and Greece in the top five, which was dominated by “sun and beach” destinations.

The UN agency estimated the direct contribution of the global tourism sector to gross domestic product last year at 3 per cent to reach $3.3 trillion, the SPA reported.

Saudi Arabia boosts tourism credentials – in pictures

  • Hegra After Dark. Photo: RCU Commission
    Hegra After Dark. Photo: RCU Commission
  • Hegra After Dark launched in November as a new way to experience AlUla. Photo: RCU Commission
    Hegra After Dark launched in November as a new way to experience AlUla. Photo: RCU Commission
  • Saudi Arabian airline flynas launched direct flights from Dubai to AlUla in 2021. Photo: Wikimedia Commons
    Saudi Arabian airline flynas launched direct flights from Dubai to AlUla in 2021. Photo: Wikimedia Commons
  • The new Habitas Al Ula. Photo: Habitas Al Ula
    The new Habitas Al Ula. Photo: Habitas Al Ula
  • Habitas adds 96 much-needed rooms to AlUla's inventory. Photo: Habitas Al Ula
    Habitas adds 96 much-needed rooms to AlUla's inventory. Photo: Habitas Al Ula
  • Luxury eco resort Habitas sits in an ancient oasis in the desert canyons of the Ashar Valley. Photo: Habitas Al Ula
    Luxury eco resort Habitas sits in an ancient oasis in the desert canyons of the Ashar Valley. Photo: Habitas Al Ula
  • Habitas Al Ula. Photo: Habitas Al Ula
    Habitas Al Ula. Photo: Habitas Al Ula
  • A rendering of The St Regis Riyadh, which is due to open in 2022. Photo: Marriott International
    A rendering of The St Regis Riyadh, which is due to open in 2022. Photo: Marriott International
  • Jason Atherton opened a restaurant in the Maraya Hall. Photo: Maraya Social
    Jason Atherton opened a restaurant in the Maraya Hall. Photo: Maraya Social
  • Maraya Social by Jason Atherton. Photo: Maraya Social
    Maraya Social by Jason Atherton. Photo: Maraya Social
  • Jeddah Central Project will involve the development of 5.7 million square metres of land overlooking the Red Sea. Photos: Jeddah Central Project
    Jeddah Central Project will involve the development of 5.7 million square metres of land overlooking the Red Sea. Photos: Jeddah Central Project
  • A sports stadium will act as one of Jeddah Central Project's anchors. Photo: Jeddah Central Project
    A sports stadium will act as one of Jeddah Central Project's anchors. Photo: Jeddah Central Project
  • The development's beach and promenade. Photo: Jeddah Central Project
    The development's beach and promenade. Photo: Jeddah Central Project
  • Saudi actress Fay Fouad walks the red carpet for the closing ceremony of the first Red Sea Film Festival. AFP
    Saudi actress Fay Fouad walks the red carpet for the closing ceremony of the first Red Sea Film Festival. AFP
  • Red Sea Film Festival chairman Mohamed Turki poses with British model Naomi Campbell at the event's closing ceremony. AFP
    Red Sea Film Festival chairman Mohamed Turki poses with British model Naomi Campbell at the event's closing ceremony. AFP
  • Zahrah Al Ghamdi, 'Birth of a Place', 2021. This was one of dozens of works by 63 artists on show in Riyadh as part of the Diriyah Contemporary Art Biennale. Photo: Diriyah Foundation
    Zahrah Al Ghamdi, 'Birth of a Place', 2021. This was one of dozens of works by 63 artists on show in Riyadh as part of the Diriyah Contemporary Art Biennale. Photo: Diriyah Foundation
  • The first Diriyah Contemporary Art Biennale is on until March 2022. Photo: Diriyah Foundation
    The first Diriyah Contemporary Art Biennale is on until March 2022. Photo: Diriyah Foundation

The Madrid-based company estimated the global tourism industry to fully recover from the pandemic during 2024 and to further grow by 2 per cent compared with 2019.

Saudi Arabia topped G20 countries for number of arriving tourists last year, and ranked second among the fastest-growing tourist destinations in the world in the first three quarters of last year, according to SPA.

Various tourist destinations in the kingdom recorded a significant increase in the number of visitors, both domestic and foreign last year, and registered a record in spending by overseas visitors, according to data issued by the Central Bank of Saudi Arabia.

Tourism revenue in Saudi Arabia was worth more than 100 billion Saudi riyals ($26.7 billion) for the first three quarters of 2023, a 72 per cent annual increase, the central bank data showed.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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More than 2.2 million Indian tourists arrived in UAE in 2023
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Updated: January 20, 2024, 1:16 PM