Our outlook for the Saudi Arabian tourism sector is positive, owing to strengthening government investment andincreasing interest by foreign investors. The market is based on a solid foundation of religious pilgrimage, with the number ofinternational pilgrims rising annually. In an effort to boost economic diversification in the aftermath of the prolonged oil price slump,the government is committed to actively developing the tourism sector in its Vision 2030 economic strategy. Government spendingon tourism transportation, accommodation and infrastructure are all geared towards boosting religious and domestic tourism andto create a luxury tourism sector to rival neighbouring Qatar and UAE over the medium and long terms. We note that governmentinvestments remain crucial to the long-term development of the sector and downside risks stem from regional security tensionsand the Saudi intervention in Yemen.