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Feasibility Study for a Project to Develop Historic Palaces and Buildings for Tourism
Feasibility Study for a Project to Develop Historic Palaces and Buildings for Tourism
The project aims to restore and repurpose historic palaces and buildings located across various regions of Saudi Arabia by renovating and adapting them in accordance with heritage preservation standards. These restored sites will then be used for tourism-related purposes such as:
Boutique hotels
Living museums
Heritage cafés and restaurants
Cultural and experiential centers
Film and television shooting locations
This project contributes to the promotion of cultural and heritage tourism, preserves local architectural identity, and transforms abandoned landmarks into vibrant and profitable investment opportunities.
Investment Opportunity Content
Targeted Services and Products
Targeted Services and Products
Renovation of historic palaces and buildings using construction materials that align with traditional architectural styles.
Operating the buildings as tourist facilities such as heritage hotels, museums, traditional restaurants, and event halls.
Offering tourism and interpretive programs for visitors (tours, shows, activities).
Managing cultural events and seasonal celebrations within the sites.
Providing hospitality services with a traditional touch (local cuisine, traditional attire, authentic décor).
Renting out the locations for artistic productions, advertisements, and private events.
Establishing an on-site shop to sell local heritage products.
Market and Demand Analysis
Market and Demand Analysis
Saudi Arabia is witnessing growing interest in cultural and heritage tourism as part of Vision 2030, which aims to increase the number of heritage sites that attract visitors.
Regions such as Diriyah, AlUla, Historic Jeddah, Najran, Asir, and Al-Ahsa offer significant opportunities for developing historic palaces and buildings with unique architectural character.
Both local and international tourists are seeking authentic experiences that combine hospitality, history, and art—making these destinations among the most appealing types of tourism.
Government entities such as the Ministry of Tourism and the Heritage Commission support these initiatives through funding and partnerships.
Competition in this sector is relatively low, while demand increases during seasons, festivals, and national events.
Investment Advantages
Investment Advantages
A long-term, sustainable project that combines real estate, tourism, and culture
Possibility of partnerships with government entities for restoration and operation
Diverse revenue streams from rentals, ticket sales, accommodations, events, and product sales
Strong support from government tourism funding and innovation programs
Investment in existing sites offers cost savings compared to building from scratch
Potential to receive special recognition from UNESCO or be listed among global destinations if international standards are met
Project Advantages
Project Advantages
Preserves the architectural and cultural identity of the local community
Enhances sustainable and cultural tourism experiences
Offers a unique stay or visit experience not replicable in traditional hotels
Creates local job opportunities in hospitality, guiding, crafts, and security
Increases the real estate value of the surrounding area
Provides rich visual content that is easy to promote through social media and tourism media
Scalable for expanding to other historic buildings in the same or new areas
Financial Indicators
Financial Indicators
The initial capital required for the project ranges from 6 to 12 million SAR per building, depending on:
The condition of the building
Its size and area
The nature of the required restoration
The added tourism services
The restoration and preparation phase takes approximately 9 to 14 months, followed by a trial operation phase.
Expected annual revenues during the first 3 years may range from 5 to 8 million SAR, generated from accommodation services, entrance fees, rentals, sales, and restaurants.
The projected return on investment (ROI) is estimated between 20% to 30% annually, with a payback period ranging from 3 to 4 years.
Net profit margins after operational stabilization are expected to range between 25% and 35%.
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