How Al-Khafji Is Opening a New Investment Frontier in the Eastern Province
Article Highlights
Saudi Arabia’s investment map is expanding beyond its flagship giga-projects. Al-Khafji reflects a broader push to unlock the potential of secondary cities and regions.
Location is central to Al-Khafji’s investment case. Its proximity to Kuwait and other Gulf markets could support cross-border tourism, hospitality, and residential demand.
Private-sector participation is a key part of the project. PIF will develop Al-Khafji alongside private-sector and local and regional investors.
The Eastern Province is building a broader tourism ecosystem. Hundreds of projects are expanding the region’s hospitality, entertainment, and tourism infrastructure.
Saudi Arabia’s tourism and economic agenda is increasingly moving beyond Riyadh and its flagship giga-projects to unlock the potential of secondary cities and regions.
The Eastern Province’s coastal city of Al-Khafji is set to become the next frontier of the Kingdom’s tourism development. To that end, Saudi has set out a bold vision to transform Al-Khafji’s coastline into an integrated residential and tourism hub.
To achieve this vision, the PIF launched the Gulf Coast Development Co to achieve this vision in September 2026.
The development spans three phases. The first phase is scheduled for completion in 2030, demonstrating that the Kingdom’s tourism and construction pipeline extends well beyond the Vision 2030 timeline.
What Makes the Al-Khafji Coastal Development Project Groundbreaking?
The initiative highlights, once again, how mega projects and public investment can catalyze private-sector engagement across the country. According to a statement by the PIF, the Gulf Coast Development Co. will develop the site in partnership with the private sector and local and regional investors.
This project is not an isolated case. It fits directly into PIF’s 2026–2030 strategy, which places greater emphasis on increasing private-sector investment and strengthening its role as a partner in the country’s ongoing economic diversification.
The project also bets on location as one of the key factors supporting the competitiveness of Al-Khafji’s coastline. Located in Saudi Arabia's Eastern Province, the city sits within reach of Kuwait and other Gulf markets. This proximity to neighboring Gulf markets creates an additional layer of opportunity for regional investors seeking new avenues of growth.
Additionally, Al-Khafji’s development strategy is also expected to drive hospitality investment across the destination. Plans include eight residential neighborhoods containing more than 16,000 housing units and approximately 1,400 hotel keys, alongside commercial, tourism, and educational facilities. The mixed-use approach combines multiple revenue streams while creating communities that remain active beyond seasonal tourism periods or individual events.
By introducing this concept to Al-Khafji, developers and real estate investors are responding to the city’s need for more diverse accommodation options that can serve both tourists and long-term residents.
Saudi Arabia’s Eastern Province: The Next Tourism Hotspot
The wider Eastern Province has become a centerpiece of the Kingdom’s broader tourism push. By December 2025, the region had witnessed the implementation of more than 650 tourism projects valued at over SAR 12.7 billion (approximately $3.39 billion).
The result of these efforts has been a surge in tourism inflows as well as visitor spending. The region reportedly welcomed more than 13.4 million tourists, whose spending exceeded SAR 18.5 billion ($4.9 billion) in the same year.
Comprehensive and well-planned tourism infrastructure investments play a role in the city’s growing attractiveness to private investors. With the addition of investments in new projects exceeding SAR 21 billion ($5.6 billion), total tourism investments in the region amount to around SAR 33.7 billion (nearly $9 billion).
The region is also home to the newly launched Khobar Season, organized by the General Entertainment Authority as one of the Kingdom’s major annual entertainment seasons. Since its launch, the season has featured a program spanning nearly 90 days, with events held across more than 20 locations. Supported by the Sharqia Development Authority and the Saudi Tourism Authority, the season attracted more than one million visitors and involved over 50 private-sector partners.
Perhaps one of the most notable projects announced so far is Dammam’s major Global City project, reflecting the city’s rapid ascent into a global tourism, entertainment, and investment hub.
The project spans more than 650,000 sq. meters, with the first phase covering approximately 250,000 sq. meters. It is planned to include 16 international pavilions representing countries from the Gulf, Asia, Europe, and Africa. Upon completion, the project is expected to draw 25,000 visitors daily.
Parks and green spaces are another key pillar of tourism development and quality of life in the Eastern Province. The entire city is now home to more than 980 parks and public squares, 18 major parks, 14 waterfront destinations, and 213 walking tracks.
The Al-Khafji development could therefore represent an important step in broadening Saudi Arabia's tourism map beyond its western coast and established tourism hubs, helping the Kingdom meet its target of attracting 150 million visitors annually by 2030.
For global companies mulling a business setup in Saudi Arabia, the question is no longer whether to bet on the Kingdom’s long-term tourism growth strategy, but who will be first to seize the opportunities it creates.