Saudi Arabia’s Second-home Boom: Why Vacation Rental Real Estate Is a Powerful New Play for Tourism Investors

Supply and platform activity are also visible at the city level, which helps investors read the market in practical terms. Ken Research states Riyadh experienced a 69% surge in inventory during 2024, reflecting rapid expansion in an urban, tourism-centric area. As of December 2025, Ken Research cites approximately 10,573 active Airbnb listings in Riyadh. Complementing that, Airbtics reports a typical Riyadh listing recorded a 39% average short-term rental occupancy between September 2024 and August 2025, and that about 30.07% of Riyadh Airbnb guests are international. Airbtics also estimates the average Riyadh Airbnb host made SAR 43K (USD 13K) across that same period, while noting seasonality and that year-round bookings can be challenging.

Why This Looks Like a New Asset Class Inside a Bigger Real Estate Cycle

Vacation rentals in Saudi Arabia are developing alongside a much larger residential and national real estate market that is increasingly shaped by rentals, apartments, and new delivery pipelines. Mordor Intelligence estimates the Saudi Arabia residential real estate market is expected to increase from USD 44.85 billion in 2025 to USD 47.58 billion in 2026 and reach USD 65.58 billion by 2031, growing at a 6.63% CAGR over 2026–2031. In that residential dataset, sales held 63.95% of market share in 2025, but rentals are forecast to post the fastest 7.11% CAGR through 2031. Apartments and condominiums captured 52.05% of revenue in 2025 and are projected to grow at a 7.29% CAGR to 2031, which supports a broader shift toward professionally operated rental supply in major cities.

Regulation is another reason tourism investors view second homes and short-term rentals as more institutional than before. Ken Research reports that in February 2023, the Saudi Arabian government implemented regulatory reforms that legalized and formalized vacation rental platforms, requiring properties to comply with safety standards and quality requirements. The same source frames this as promoting a more reliable and secure environment, while unlocking income streams for property owners and attracting foreign investors. City-level compliance can still be strict, with Airbtics noting that zoning rules might apply and that hosts may need to register with local authorities, with potential limits on how many licenses a single host can hold. For investors, the message is clear: underwriting needs to account for licensing and operating discipline, not just purchase price.

Demand drivers extend beyond leisure travel and into workforce-linked housing dynamics and mega-project pipelines that broaden travel patterns. Global Property Guide notes that, as of 2025, more than 14 million expatriates are employed in Saudi Arabia, accounting for roughly 77% of the total workforce, driven by large-scale projects and diversification under Vision 2030. The same source describes Amaala as a luxury wellness and tourism destination on the northwestern Red Sea coast covering around 3,800 sq. km, planned to include approximately 2,500 luxury hotel rooms, 700 villas, 200 retail establishments, marinas, and cultural facilities. For tourism investors evaluating vacation rental real estate in Saudi Arabia, these facts point to a market where second-home supply, platform distribution, and regulation are converging into a clearer, investable category.