Ksa Vacation Rental Market Report Size, Share, Growth Drivers, Trends, Opportunities & Forecast 2025–2030

Saudi Arabia Vacation Rental Market Overview

• The Saudi Arabia Vacation Rental Market is valued at approximately USD 1.82 billion, based on current market analysis. This growth is primarily driven by the increasing influx of tourists, both domestic and international, as well as the rising popularity of alternative accommodation options among travelers seeking unique experiences. The market has seen a significant rise in demand for vacation rentals, particularly in urban and tourist-centric areas, with Riyadh experiencing a 69% surge in inventory during 2024, reflecting the market's rapid expansion.
• Key cities dominating the Saudi Arabia Vacation Rental Market include Riyadh, Jeddah, and Mecca. Riyadh serves as the capital and a major business hub, attracting both leisure and business travelers, with approximately 10,573 active Airbnb listings as of December 2025. Jeddah, with its coastal attractions, and Mecca, a pilgrimage destination, further enhance the market's growth due to their high visitor numbers and demand for diverse accommodation options. The government's Vision 2030 goals, targeting 100 million annual visitors by 2030, and mega-projects like Neom, the Red Sea Project, and AlUla are expected to drive sustained tourism demand and create continued need for alternative accommodations.
• In February 2023, the Saudi Arabian government implemented regulatory reforms legalizing and formalizing vacation rental platforms, requiring properties to comply with safety standards and quality requirements. This initiative, modeled after Dubai's successful framework, aims to ensure compliance with safety standards and enhance the quality of services offered to guests, thereby promoting a more reliable and secure vacation rental environment while unlocking new income streams for property owners and attracting foreign investors.

Saudi Arabia Vacation Rental Market Segmentation

By Accommodation Type:The accommodation type segment includes various options catering to different traveler preferences. Homes/Villas are popular for families and groups seeking privacy and space. Apartments/Condominiums offer a blend of comfort and convenience, appealing to both leisure and business travelers. Resorts/Condominiums provide luxury experiences and represent the fastest-growing segment, while Guesthouses cater to budget-conscious travelers. Unique Stays, such as treehouses and yurts, attract adventurous tourists looking for distinctive experiences. The "Others" category includes various alternative accommodations.

The Homes/Villas sub-segment is currently dominating the market due to the increasing preference for spacious accommodations among families and groups. This trend is driven by the desire for privacy and the ability to cook meals, which is particularly appealing for longer stays. Additionally, the rise of platforms offering vacation rentals has made it easier for travelers to find and book these types of accommodations, further boosting their popularity. Resort/Condominium represents the most lucrative segment registering the fastest growth during the forecast period.

By Room Type:The room type segment encompasses various options that cater to different traveler needs. Entire Home/Apartment rentals are favored by families and groups seeking privacy. Private Rooms are popular among solo travelers and couples looking for budget-friendly options while still enjoying some privacy. Shared Rooms appeal to backpackers and budget travelers who prioritize cost savings and social interactions.

The Entire Home/Apartment sub-segment leads the market, driven by the growing trend of families and groups preferring to stay together in one space. This preference is fueled by the desire for a home-like environment, which allows for cooking and socializing, making it ideal for longer vacations. The convenience and flexibility offered by entire rentals further enhance their appeal, solidifying their position as the leading choice among travelers.

Saudi Arabia Vacation Rental Market Competitive Landscape

The Saudi Arabia Vacation Rental Market is characterized by a dynamic mix of regional and international players. Leading participants such as Airbnb Inc., Booking Holdings Inc., Expedia Group Inc., Tripadvisor Inc., OYO Rooms, MakeMyTrip Ltd., Wyndham Destinations, 9flats, Novasol, Hotelplan Group contribute to innovation, geographic expansion, and service delivery in this space. Airbnb has emerged as a dominant player following the February 2023 regulatory reforms, with Riyadh alone recording a 39% average occupancy rate and an average daily rate of USD 86 as of December 2025.

Saudi Arabia Vacation Rental Market Industry Analysis

Growth Drivers

• Increasing Tourism and Pilgrimage Activities:In future, Saudi Arabia anticipates over 25 million international visitors, driven by religious tourism, particularly to Mecca and Medina. The government aims to attract 40 million visitors by future, as outlined in Vision 2030. This influx is expected to significantly boost the demand for vacation rentals, providing travelers with diverse accommodation options that cater to various budgets and preferences, thus enhancing the overall tourism experience.
• Rising Demand for Alternative Accommodations:The shift towards alternative accommodations is evident, with vacation rentals projected to account for 30% of the total lodging market in Saudi Arabia in future. This trend is fueled by changing consumer preferences, as travelers increasingly seek unique, home-like experiences. The growth of platforms like Airbnb and local rental services has made it easier for property owners to list their homes, further driving this demand and expanding the market's reach.
• Government Initiatives to Promote Tourism:The Saudi government has invested approximately $2 billion in tourism infrastructure as part of its Vision 2030 initiative. This includes developing new tourist attractions and enhancing existing ones, which is expected to create a favorable environment for vacation rentals. Additionally, the easing of visa regulations has made it easier for tourists to visit, further stimulating the demand for diverse accommodation options across the country.

Market Challenges

• Regulatory Compliance Issues:The vacation rental market in Saudi Arabia faces significant regulatory challenges, with over 60% of property owners unaware of local laws governing short-term rentals. Compliance with licensing requirements and safety regulations is crucial, as non-compliance can lead to fines or property shutdowns. The lack of clear guidelines can deter potential investors and property owners from entering the market, stifling growth opportunities.
• Competition from Traditional Hotels:The traditional hotel sector remains a formidable competitor, with over 700,000 hotel rooms available across the country. Many travelers still prefer established hotel brands for their perceived reliability and service quality. This competition can limit the market share of vacation rentals, particularly in urban areas where hotels dominate. As a result, vacation rental operators must differentiate their offerings to attract guests effectively.

Saudi Arabia Vacation Rental Market Future Outlook

The Saudi Arabia vacation rental market is poised for significant growth, driven by increasing tourism and evolving consumer preferences. As the government continues to invest in tourism infrastructure and promote the sector, the market is expected to expand. Additionally, the integration of technology, such as mobile booking apps and smart home features, will enhance guest experiences. This evolution will likely lead to a more competitive landscape, encouraging innovation and improved service standards across the industry.

Market Opportunities

• Expansion into Emerging Tourist Destinations:With the government's focus on diversifying tourism, there is a significant opportunity for vacation rentals in emerging destinations like AlUla and NEOM. These areas are expected to attract millions of visitors, creating demand for unique accommodations that reflect local culture and heritage, thus providing a lucrative market for investors and property owners.
• Development of Luxury Vacation Rentals:The luxury segment of the vacation rental market is underdeveloped, presenting an opportunity for growth. With an increasing number of affluent travelers seeking high-end experiences, the development of luxury vacation rentals can cater to this demand. Properties offering premium amenities and personalized services can attract high-net-worth individuals, enhancing profitability for owners and operators.