KSA serviced apartment market report size, share, growth drivers, trends, opportunities & forecast 2025–2030

KSA Serviced Apartment Market Overview

• The KSA Serviced Apartment Market is valued at USD 640 million, based on a five-year historical analysis. This growth is primarily driven by the increasing influx of expatriates, business travelers, and tourists, alongside a rising demand for flexible accommodation options that offer home-like amenities. The market has seen a significant uptick in serviced apartment developments, catering to both short-term and long-term stays, reflecting changing consumer preferences and the expansion of the tourism and business sectors.
• Key cities dominating the KSA serviced apartment market include Riyadh, Jeddah, and Dammam. Riyadh, as the capital, attracts a large number of business travelers and expatriates, while Jeddah serves as a major gateway for international tourists. Dammam, being an industrial hub, also sees a steady demand for serviced apartments, making these cities pivotal in shaping the market landscape.
• In 2023, the Saudi government implemented regulations to enhance the quality and standards of serviced apartments. This includes mandatory licensing for operators and adherence to specific safety and service standards, aimed at improving customer satisfaction and ensuring a consistent experience across the sector. Such regulations are expected to foster a more competitive environment and elevate the overall service quality in the market.

KSA Serviced Apartment Market Segmentation

By Type:The serviced apartment market can be segmented into various types, including Luxury Serviced Apartments, Mid-Range Serviced Apartments, Budget Serviced Apartments, Extended Stay Apartments, Aparthotels, and Co-living Spaces. Each type caters to different consumer needs and preferences, with luxury options appealing to high-end travelers and budget options targeting cost-conscious guests.

The Luxury Serviced Apartments segment is currently leading the market, driven by affluent travelers seeking high-quality amenities and personalized services. This segment has witnessed a surge in demand due to the increasing number of business executives and expatriates who prefer upscale accommodations that offer both comfort and convenience. The trend towards longer stays has also contributed to the growth of this segment, as luxury apartments provide a more homely environment compared to traditional hotels.

By End-User:The serviced apartment market can be segmented by end-user categories, including Business Travelers, Leisure Tourists, Expats and Relocators, Government Officials, Families, and Others. Each category reflects distinct needs and preferences, influencing the type of serviced apartments that are in demand.

Business Travelers represent the largest end-user segment, as serviced apartments offer the flexibility and amenities that corporate clients require during their stays. The growing trend of remote work and business travel has further solidified this segment's dominance, with many companies opting for serviced apartments over traditional hotels to accommodate their employees. The ability to provide a home-like environment with essential services has made this option increasingly attractive for business-related travel.

KSA Serviced Apartment Market Competitive Landscape

The KSA Serviced Apartment Market is characterized by a dynamic mix of regional and international players. Leading participants such as Ascott Limited, Marriott International (Marriott Executive Apartments, Residence Inn), InterContinental Hotels Group (Staybridge Suites, Holiday Inn Residence), Accor (Adagio Aparthotel, Novotel Suites), Hilton Worldwide (Hilton Riyadh Residences, DoubleTree Residences), Fraser Hospitality (Fraser Suites Riyadh), Oakwood Worldwide, Staybridge Suites, Radisson Hotel Group (Radisson Blu Residences), Wyndham Hotels & Resorts (Ramada Residences, Hawthorn Suites by Wyndham), The Apartment Service, Zoku, The Living Hotels, SACO Apartments, Roomzzz Aparthotels, Durrat Al Riyadh Resort & Spa, Boudl Hotels & Resorts, Al Muhaidib Group (Al Muhaidib Residences), Mena Aparthotel, Al Faisaliah Hotel Suites contribute to innovation, geographic expansion, and service delivery in this space.

KSA Serviced Apartment Market Industry Analysis

Growth Drivers

• Increasing Demand for Short-Term Rentals:The KSA serviced apartment market is experiencing a surge in demand for short-term rentals, driven by a notable increase in domestic travel, as reported by the Saudi Tourism Authority. This trend is further supported by the rise of digital platforms, which have facilitated easier access to rental options. Additionally, the number of international visitors is reported to have surpassed 18 million, enhancing the appeal of serviced apartments as flexible accommodation solutions for both leisure and business travelers.
• Growth in Tourism and Business Travel:The tourism sector in KSA is reported to contribute approximately SAR 100 billion to the economy, reflecting a robust growth trajectory. Business travel is also on the rise, with a reported increase of 10% in corporate travel expenditures. This growth is fueled by major events such as the Riyadh Season and the Vision 2030 initiative, which aims to diversify the economy and attract foreign investment, thereby increasing the demand for serviced apartments as convenient lodging options.
• Urbanization and Infrastructure Development:Rapid urbanization in KSA, with urban population growth estimated at approximately 2% annually according to the World Bank, is driving the demand for serviced apartments. The government’s investment of SAR 1 trillion in infrastructure projects, including transportation and housing, is expected to enhance accessibility to urban centers. This development is likely to attract both expatriates and tourists, further increasing the need for serviced accommodations that offer a blend of home-like amenities and hotel services.

Market Challenges

• Regulatory Hurdles:The KSA serviced apartment market faces significant regulatory challenges, including complex licensing requirements that can delay property development. The Ministry of Municipal and Rural Affairs has announced intentions to implement stricter regulations, which may increase compliance costs for operators. These hurdles can deter potential investors and limit the growth of new serviced apartment projects, impacting overall market expansion.
• High Competition from Traditional Hotels:The serviced apartment sector is contending with intense competition from traditional hotels, which are well-established and often preferred by business travelers. The hotel occupancy rate in KSA has remained above 60% in recent periods, making it challenging for serviced apartments to capture market share. This competition is exacerbated by the brand loyalty associated with established hotel chains, which can limit the visibility and appeal of newer serviced apartment offerings.

KSA Serviced Apartment Market Future Outlook

The KSA serviced apartment market is poised for significant growth, driven by increasing urbanization and a burgeoning tourism sector. As the government continues to invest in infrastructure and tourism initiatives, serviced apartments are likely to become a preferred choice for both domestic and international travelers. The integration of technology in service delivery and a focus on sustainability will further enhance the appeal of serviced apartments, positioning them favorably in a competitive landscape.

Market Opportunities

• Expansion of Digital Platforms for Bookings:The rise of digital booking platforms presents a significant opportunity for serviced apartments to reach a broader audience. With over 60% of travelers in KSA preferring online bookings, leveraging these platforms can enhance visibility and streamline the booking process, ultimately driving occupancy rates and revenue growth.
• Development of Niche Markets:There is a growing opportunity to develop niche markets, such as luxury serviced apartments targeting affluent travelers. With a reported increase in high-net-worth individuals in KSA, estimated at approximately 4% annually according to Credit Suisse and Knight Frank, catering to this demographic can yield higher returns and differentiate serviced apartments from traditional hotel offerings.