Preserving heritage while meeting contemporary tourism demands has become integral to Saudi Arabia’s urban planning strategies and economic sustainability objectives.
A prime example is the ongoing revitalization of Jeddah’s Al Balad District. Central to these efforts is a $3.6 billion investment by PIF’s Al Balad Development Company to transform the district’s hospitality landscape.
The initiative creates a scalable model for heritage conservation and sustainable urban development, generating multiple avenues for value creation within the hospitality and tourism sectors.
Jeddah’s Al Balad District as a Blueprint for Heritage-Led Growth and International Investment
Al Balad Development Company’s $3.6bn hospitality and tourism initiative runs through 2025-2038, seeking to elevate Jeddah’s UNESCO-protected historic quarter into a world-class heritage destination. This goes in close alignment with national strategies positioning heritage tourism as vital for drawing local and international travelers.
By stimulating robust economic activity within the heritage district, this revitalization project is generating significant and diverse investment opportunities for both domestic and international stakeholders.
In this context, Al Balad’s new development plan encompasses the introduction of more than 3,300 hotel units. This includes 325 luxury rooms, 758 upper-upscale rooms, 664 upscale rooms, 1,246 mid-scale rooms, and 422 hotel apartments.
This vast investment scope creates multiple entry points for international investors across the entire hospitality value chain. Furthermore, the anticipated surge in visitor traffic will create demand for diverse dining and retail offerings.
Meanwhile, companies with expertise in the adaptive use of heritage architecture will find promising prospects through public-private partnerships.
Extending through 2038, this particular development plan provides international companies with a robust project pipeline, positioning Jeddah as an attractive destination for long-term global infrastructure investors looking to set up a business presence in Saudi Arabia.
Heritage and Cultural Tourism: A Catalyst for Economic Growth in Saudi Arabia
The government’s focus on developing Al Balad district forms a crucial part of Saudi Arabia’s wider strategy to blend the strengths of the country’s tourism, culture, and heritage to stimulate substantial socio-economic benefits. The recently unveiled Al Balad development plan perfectly aligns with this vision by fostering robust, culturally sensitive tourism growth in this particular region.
It comes at a time when there’s an increasing emphasis on showcasing Saudi Arabia’s rich cultural heritage to global audiences, leveraging its growing list of attractions and UNESCO-listed heritage sites. This includes Historic Jeddah, or Al Balad.
According to the latest market statistics, the “Cultural Heritage” tourism sector was worth $5 million in 2024 and is likely to grow to $8 million by 2033. This projected growth is largely down to the phenomenal surge in event-driven tourism across the country, with cultural festivals and celebrations increasingly becoming an important driver of inbound tourist footfall.
These market trends don’t arise in isolation but are deeply intertwined with Saudi Arabia’s Vision 2030 to boost its cultural sector, which is expected to triple its contribution to the GDP, reaching $48 billion by 2030.
The knock-on effects of cultural tourism growth extend to ancillary sectors like traditional practices and handicrafts. The latter is already a booming industry with an estimated value of $405 million.
This rapid rise of cultural tourism, in turn, strengthens local creative industries, which are identified as another crucial economic pillar under the Vision 2030. For Saudi Arabia, this particular segment serves as a catalyst for economic growth through revenue generation, employment creation, and infrastructure development, while safeguarding the Kingdom’s unique, long-standing architectural and cultural heritage.
Jeddah’s Al Balad district tourism revitalization plan provides a blueprint for other historic towns, demonstrating how adaptive reuse frameworks can transform heritage sites into sustainable tourism destinations that embody cultural narratives, strengthen local communities, and enhance economic resilience.