Makkah remained Saudi Arabia's strongest-performing hotel market in early 2026, with the hospitality sectors of both holy cities proving resilient despite regional travel disruptions, according to a new report from the consultancy Knight Frank.
The firm's Saudi Hospitality and Religious Tourism Report, released this week, found that demand in Makkah and Madinah held firm during the first four months of the year. The findings come as the Kingdom pushes to make religious tourism a central pillar of its Vision 2030 economic strategy.
Strong Hotel Performance in the Holy Cities
Makkah recorded average daily room rates of SR775, around $209, during the first four months of 2026. Annual revenue per available room in the city grew 4.7 percent, keeping it ahead of every other hotel market in the Kingdom.
Madinah also held up well. Hotel occupancy in the city of the Prophet's Mosque averaged 76 percent, while room rates rose 2.7 percent year on year.
The picture elsewhere was more mixed. Riyadh saw softer conditions as new supply entered the market and business travel slowed amid regional tensions. According to Knight Frank, occupancy in the capital fell 17.9 percent year on year to 49.3 percent, and revenue per available room declined 18.3 percent. The contrast underlines how pilgrimage demand insulates the holy cities from wider swings in the travel market.
A Building Boom for Pilgrims
The Kingdom is investing heavily in hotels, transport, and real estate to handle rising pilgrim numbers. Knight Frank said more than 105,225 hotel rooms are currently under construction or in advanced planning across Saudi Arabia. That pipeline would lift total hotel inventory from 176,260 rooms to more than 281,500 by 2030.
More than 218,000 hotel rooms, branded residences, and serviced apartments are planned across major developments in Makkah and Madinah. These include Rua Al Haram, Rua Al Madinah, and Dar Al Hijrah Pilgrim City, as well as Knowledge Economic City, Masar Makkah, and Thakher Makkah.
"The Holy Cities have long benefited from strong underlying demand, but recent regulatory reforms are creating new opportunities for international investors to participate in their long-term growth story," said Amar Hussain, associate partner for research in the Middle East and North Africa at Knight Frank.
Pilgrim Numbers and Tourism Growth
Religious tourism continues to drive much of the activity. The report found that 1.71 million pilgrims performed Hajj in 2026, up 2.2 percent on the previous year, with arrivals from 165 countries. International pilgrims accounted for around 1.55 million of that total. Indonesia, Pakistan, India, Bangladesh, and Nigeria remained the largest source markets.
Across the wider economy, Saudi Arabia welcomed 37.2 million domestic and international visitors during the first quarter of 2026, with visitor spending reaching SR82.7 billion. Domestic tourism led the way, with visitor numbers rising 16 percent year on year to 28.9 million.
The travel and tourism sector contributed $178 billion to the Kingdom's gross domestic product in 2025, about 46 percent of the entire Middle East tourism economy. Tourism GDP expanded 7.4 percent over the year, outpacing both the regional average of 5.3 percent and the global average of 4.1 percent.
What It Means for Pilgrims
For those planning Hajj or Umrah, the report points to more rooms and more choice in the years ahead, as the Kingdom works toward its goal of welcoming 30 million Hajj and Umrah pilgrims annually by 2030. Faisal Durrani, head of MENA research at Knight Frank, noted that more than half of the future hotel pipeline is concentrated in luxury and upper-upscale properties.
That concentration carries a practical lesson for budget-conscious pilgrims. Mid-range and economy rooms near the Haram remain in high demand, so booking accommodation early continues to be the safest way to secure a fair price. Pilgrims should compare options across the new developments as they open and confirm bookings through official channels well ahead of their travel dates.