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

Saudi Arabia Serviced Apartment Market Overview

• The Saudi Arabia 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, rising tourism, and a growing preference for flexible accommodation options among business travelers. The market has seen a significant rise in demand for serviced apartments due to their ability to offer home-like amenities combined with hotel-like services, supported by the expansion of remote work and blended work-life models .
• Key cities dominating the market include Riyadh, Jeddah, and Dammam. Riyadh serves as the capital and a major business hub, attracting corporate travelers and expatriates. Jeddah, with its proximity to the Red Sea, is a popular tourist destination, while Dammam is a key industrial center. These cities benefit from robust infrastructure and a growing number of international businesses, further driving the demand for serviced apartments .
• In 2023, the Saudi government implemented the Serviced Apartments Regulations issued by the Ministry of Municipal and Rural Affairs and Housing. This includes mandatory licensing for operators and adherence to safety and service quality benchmarks. The initiative aims to improve the overall guest experience and ensure compliance with international hospitality standards, thereby boosting the sector's reputation and attracting more visitors .

Saudi Arabia Serviced Apartment Market Segmentation

By Type:The serviced apartment market can be segmented into various types, including Long-Term Stays (>30 Nights), Short-Term Stays (<30 Nights), Luxury Serviced Apartments, Mid-Range Serviced Apartments, and Budget Serviced Apartments. Each of these segments caters to different consumer needs and preferences, with long-term stays being popular among expatriates and corporate clients, while short-term stays attract leisure travelers. The market is also witnessing a rise in demand for co-living spaces and flexible workspaces within serviced apartments, reflecting evolving work-life preferences .

By End-User:The end-user segmentation includes Corporate/Business Travelers, Leisure Travelers, Expatriates and Relocators, Government Officials, and Students and Medical Travelers. Corporate travelers dominate the market due to the increasing number of international businesses establishing operations in Saudi Arabia, leading to a higher demand for serviced apartments that offer flexibility and convenience. The relocation segment is also growing, supported by increased global mobility and the expansion of the expatriate workforce .

Saudi Arabia Serviced Apartment Market Competitive Landscape

The Saudi Arabia Serviced Apartment Market is characterized by a dynamic mix of regional and international players. Leading participants such as Ascott Limited, Marriott International (Residence Inn, Staybridge Suites), Accor Hotels (Citadines, Aparthotels Adagio), Hilton Worldwide (Home2 Suites, Homewood Suites), InterContinental Hotels Group (Staybridge Suites), Radisson Hotel Group, Wyndham Hotels & Resorts, Al Habtoor Group, Jumeirah Group, The Address Hotels + Resorts, Rove Hotels, Emaar Hospitality Group, Rotana Hotels, Dar Al Baraka Real Estate, Dar Global (Dar Development Company) contribute to innovation, geographic expansion, and service delivery in this space.

Saudi Arabia Serviced Apartment Market Industry Analysis

Growth Drivers

• Increasing Demand for Long-Term Stays:The Saudi Arabian serviced apartment market is witnessing a surge in demand for long-term stays, driven by a growing expatriate population, which reached approximately 13.4 million in future. This demographic shift is supported by the Kingdom's Vision 2030 initiative, aiming to diversify the economy and attract foreign talent. Additionally, the average length of stay in serviced apartments has increased to 30 days, reflecting a shift in consumer preferences towards more flexible living arrangements.
• Growth in Tourism and Business Travel:Saudi Arabia's tourism sector is projected to contribute over $100 billion to the economy in future, bolstered by events like the Riyadh Season and the expansion of the entertainment sector. Business travel is also on the rise, with the number of business trips expected to exceed 5 million annually. This influx of tourists and business travelers is driving the demand for serviced apartments, which offer a blend of comfort and convenience for extended stays.
• Government Initiatives to Boost Hospitality Sector:The Saudi government has implemented various initiatives to enhance the hospitality sector, including the introduction of tax incentives for new hospitality projects. In future, the government allocated $1.5 billion to develop tourism infrastructure, which includes serviced apartments. These initiatives are expected to create over 100,000 new jobs in the hospitality sector in future, further stimulating demand for serviced accommodations.

Market Challenges

• High Competition Among Service Providers:The serviced apartment market in Saudi Arabia is characterized by intense competition, with over 200 providers operating in major cities like Riyadh and Jeddah. This saturation has led to price wars, reducing profit margins for operators. In future, the average occupancy rate was around 65%, indicating that many providers struggle to maintain profitability amidst this competitive landscape, which could hinder market growth.
• Regulatory Hurdles and Compliance Issues:Navigating the regulatory landscape poses significant challenges for serviced apartment operators in Saudi Arabia. Compliance with local zoning laws and licensing requirements can be cumbersome, with over 30 different regulations impacting the sector. In future, approximately 25% of new entrants faced delays in obtaining necessary permits, which can stall project timelines and increase operational costs, ultimately affecting market entry and expansion.

Saudi Arabia Serviced Apartment Market Future Outlook

The future of the Saudi Arabia serviced apartment market appears promising, driven by ongoing government support and a robust tourism sector. As the Kingdom continues to diversify its economy, the demand for flexible living arrangements is expected to rise. Additionally, the integration of smart technologies and eco-friendly practices will likely enhance customer experiences, making serviced apartments more appealing. The focus on secondary cities will also open new avenues for growth, catering to a broader demographic seeking long-term accommodations.

Market Opportunities

• Development of New Serviced Apartment Projects:With the government's commitment to boosting the hospitality sector, there is a significant opportunity for new serviced apartment developments. The projected investment of $1.5 billion in tourism infrastructure in future will facilitate the establishment of modern serviced apartments, catering to both expatriates and tourists, thus enhancing market capacity.
• Partnerships with Corporate Clients:Establishing partnerships with corporate clients presents a lucrative opportunity for serviced apartment providers. With over 5 million business trips anticipated annually, companies are increasingly seeking long-term accommodation solutions for their employees. Collaborating with corporations can lead to guaranteed occupancy rates and stable revenue streams, benefiting both parties in the competitive market.