Saudi Arabia's Short-Term Rental Market: A Strategic Investment Play Post-2028

The short-term rental market in Saudi Arabia is undergoing a transformative phase, driven by regulatory reforms, Vision 2030 initiatives, and surging tourism demand. For investors, the question is no longer whether this market will grow, but when to position for its next phase—particularly in the context of potential IPOs post-2028.

Market Growth and Regulatory Catalysts

Saudi Arabia's short-term rental sector is projected to expand from $600 million in revenue in 2023 to $901.04 million by 2030, with a compound annual growth rate (CAGR) of 6.07% Vacation Rentals - Saudi Arabia^[1]. This growth is underpinned by a February 2023 regulatory overhaul that legalized platforms like Airbnb for Saudi citizens, requiring permits and adherence to quality standards Op-Ed: The rising potential of Saudi Arabia’s short-term letting market^[2]. The reform, modeled after Dubai's successful framework, has unlocked a new income stream for property owners and attracted foreign investors. For instance, Riyadh alone saw a 143% surge in short-term rental listings by 2024 Saudi Arabia set for surge in demand for short-term rentals^[3], reflecting the market's rapid maturation.

The government's Vision 2030 goals—targeting 100 million annual visitors by 2030 and a 70% home ownership rate—further amplify demand. Mega-projects like Neom, the Red Sea Project, and AlUla are expected to drive tourism and create a sustained need for alternative accommodations Saudi Arabia to Drive MENA’s IPO Surge in 2025^[4].

IPO Potential and Market Readiness

While no concrete IPO announcements for the short-term rental sector post-2028 have emerged, the broader Saudi IPO landscape suggests a fertile environment. In 2025, the kingdom is projected to dominate the MENA region's IPO activity, with 46 listings anticipated across sectors like real estate and technology Saudi IPO Pipeline Defies Global Headwinds as …^[5]. Gathern, Saudi Arabia's leading vacation rental platform, has already raised $72 million in a Series B round led by Sanabil Investments (a Public Investment Fund subsidiary) and is preparing for a Tadawul listing, though no timeline has been disclosed Gathern raises $72 million Series B ahead of Tadawul IPO^[6]. This positions Gathern as a potential bellwether for sector-specific IPOs in the coming years.

The regulatory environment is also evolving to support public listings. The Saudi Stock Exchange (Tadawul) has introduced measures to enhance liquidity and transparency, including the Nomu Parallel Market for smaller companies Saudi Exchange eyes 50 IPOs as market maturity^[7]. These reforms, coupled with Vision 2030's emphasis on economic diversification, create a conducive backdrop for short-term rental platforms to pursue public market access.

Strategic Investment Timing

Investors should consider two key timelines:
1. Pre-IPO Positioning (2025–2028): Early-stage investments in platforms like Gathern or regional competitors could yield outsized returns as the market consolidates. The sector's projected 15–20% annual growth rate Investing in Saudi Arabia's Short-Term Rental Boom^[8] suggests that companies with strong operational scalability and technology infrastructure will dominate.
2. Post-2028 IPO Window: By 2028, the market is likely to see more structured listings, particularly as mega-projects reach critical mass. However, risks such as regulatory shifts or oversupply in high-demand areas (e.g., Mecca, Jeddah) could delay timelines.

Risks and Mitigants

Challenges include high construction costs and oil price volatility, which could temporarily dampen growth Saudi Arabia Residential Real Estate Market Size & Share Analysis^[9]. Additionally, the conversion of long-term rentals to short-term units has raised affordability concerns in cities like Riyadh The Impact of Short-Term Rentals on Long-Term Rentals and the ...^[10]. However, the government's Ejar platform for standardized leases and its focus on affordable housing initiatives mitigate these risks.

Conclusion

Saudi Arabia's short-term rental market is a compelling long-term investment opportunity, with regulatory tailwinds and Vision 2030-driven demand creating a robust foundation. While IPOs post-2028 remain speculative, the sector's trajectory—bolstered by Gathern's IPO preparations and broader market reforms—suggests that patient investors will be rewarded. The key lies in balancing early-stage participation with a watchful eye on regulatory and macroeconomic signals.