Our outlook for the Saudi Arabian tourism sector is positive, owing to strengtheninggovernment investment and increasing interest by foreign investors. The market is based on a solidfoundation of religious pilgrimage, with the number of international pilgrims rising annually. In an effort toboost economic diversification in the aftermath of the prolonged oil price slump, the government iscommitted to actively developing the tourism sector in its Vision 2030 economic strategy. Governmentspending on tourism transportation, accommodation and infrastructure are all geared towards boostingreligious and domestic tourism and to create a luxury tourism sector to rival neighbouring Qatar and UAEover the medium and long-terms. We note that government investments remain crucial to the long-termdevelopment of the sector and downside risks stem from regional security tensions and the Saudiintervention in Yemen.