Saudi Arabia’s King Abdullah Economic City to Receive Major Boost in Tourism and Residential Development with New Strategic Partnership

Published on February 4, 2026

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In a game-changing move for Saudi Arabia’s tourism and real estate sectors, King Abdullah Economic City (KAEC) is set to become one of the most desirable global destinations. This significant leap forward comes thanks to a newly signed partnership between K. Hovnanian M.E. Investments, LLC (KHME), the Tourism Development Fund (TDF), and Emaar, The Economic City (EEC). This strategic alliance aims to accelerate the development of both luxury tourism and high-end residential opportunities, further elevating KAEC as a leading global hub.

The agreement, finalized during the Future Real Estate Forum 2026 in Riyadh, marks a new chapter for KAEC as it seeks to establish itself as one of the premier lifestyle and tourism destinations in the region. As part of the partnership, KHME, TDF, and EEC will focus on a landmark development project situated on one of the most iconic waterfront locations on the Red Sea beaches and Marina Canal within KAEC.

This project, designed to offer high-quality tourism experiences and exclusive residential options, promises to set new standards in coastal development. The first phase of the project includes the construction of branded private residences, two five-star hotels, and a central beach club that will serve as the heart of the community, offering wellness and spa services alongside leisure activities.

Qusai Al-Fakhri, CEO of the Tourism Development Fund, stated that the agreement reflects TDF’s commitment to supporting the Kingdom’s tourism sector. He noted that the signing of the MoU illustrates the alignment of both the public and private sectors to develop high-quality tourism projects. Al-Fakhri emphasized that the partnership is part of the Fund’s broader efforts to enhance Saudi Arabia’s ability to attract investments and global hospitality brands, thereby boosting the competitiveness of its tourism destinations.

Robert Hofmann, CEO of Al Tahaluf Real Estate, pointed out that this project on the Red Sea beaches marks an important step in advancing tourism investment and residential developments in King Abdullah Economic City. Hofmann highlighted that the development would further strengthen KAEC’s portfolio of lifestyle communities, with other planned projects such as Soleya at the Red Sea, which will feature 340 private residences located between the Red Sea and the Royal Greens Golf Course. He added that these projects would together create a true destination, reinforcing KAEC’s position as a premier location for global investors and residents.

Abdulaziz Alnowaiser, CEO of Emaar, The Economic City, commented on the MoU’s importance, noting that it reflects the commitment to supporting the growth of tourism and hospitality sectors within KAEC. He emphasized that these partnerships are critical for building a stronger tourism offering in KAEC, helping to attract visitors from global markets and boosting investor confidence. Alnowaiser also mentioned that the development would contribute to the long-term sustainability of tourism in line with the city’s strategic objectives.

A New Era of Tourism and Residential Luxury

KAEC is already positioned as one of Saudi Arabia’s most ambitious mixed-use developments, offering a unique blend of modern living, tourism, and business opportunities. The new collaboration between KHME, TDF, and EEC will accelerate the transformation of the city into a globally recognized destination. With its prime location on the Red Sea coast and proximity to Jeddah, one of Saudi Arabia’s largest cities, the area is poised to attract international investors and travelers alike.

According to Robert Hofmann, the new coastal development project on the Red Sea beaches is a “signature destination” for high-end tourism. He pointed out that the project would offer unparalleled luxury and leisure opportunities, making KAEC one of the most sought-after lifestyle and investment destinations in the Kingdom.

Additionally, the expansion of tourism-driven real estate is expected to catalyze the Kingdom’s broader economic goals, creating jobs, increasing local tourism revenues, and improving overall tourism infrastructure. This includes the development of new hotels, recreational facilities, and exclusive branded residences, which will make KAEC a top choice for affluent travelers and international investors.

Abdulaziz Alnowaiser, CEO of Emaar, The Economic City, also commented on the MoU’s significance, stating that the project would be pivotal in strengthening KAEC’s position as a key destination for tourism and investment. He stressed that this partnership enhances the city’s ability to attract foreign investments and establishes it as a coastal hub for world-class hospitality and residential communities.

KAEC’s Strategic Importance for Saudi Tourism

King Abdullah Economic City’s development is strategically aligned with Saudi Arabia’s National Tourism Strategy, which seeks to increase the Kingdom’s international appeal as a travel destination. With its strategic location along the Red Sea and near Jeddah, KAEC is perfectly positioned to support the growth of Saudi Arabia’s tourism sector.

TDF’s role in this partnership is crucial, as it continues to implement its mission to enable national tourism investments. By focusing on high-quality developments like those in KAEC, TDF is helping attract global hospitality brands, which are essential for building the Kingdom’s reputation as a premium travel destination. The city’s development, therefore, represents more than just luxury living; it is a cornerstone of Saudi Arabia’s broader plan to expand its tourism industry and diversify its economy.

The developments in KAEC will provide international tourists with access to premium beach resorts, spas, golf courses, and wellness centers, all set against the stunning backdrop of the Red Sea. This comprehensive tourism offering is expected to significantly enhance the visitor experience and attract new global travelers to Saudi Arabia.

The Future of Saudi Arabia’s Coastal Tourism

With the new partnership firmly in place, King Abdullah Economic City is set to become one of the most important tourist destinations in the region. The project’s focus on lifestyle-driven amenities, luxury residences, and world-class hospitality will enhance KAEC’s reputation as a leading coastal destination. As more branded hotels and resorts spring up along the Red Sea, the city will further solidify its position as a premier destination for international investors and tourists alike.

In conclusion, the signing of this strategic partnership is not only a win for KAEC but for the Kingdom of Saudi Arabia as a whole. It demonstrates the commitment of both the public and private sectors to fostering a thriving tourism industry that aligns with Vision 2030. Through collaborations like these, KAEC will continue to evolve as a vibrant destination that offers luxury, lifestyle, and unparalleled experiences for tourists, residents, and investors alike.