Saudi Arabia elevator and escalator market is valued at USD 1.1 billion in 2022 and is anticipated to reach USD 1.84 billion by 2030. Owing to the increasing demand for elevator and escalator modification and increased emphasis on enhancing metropolitan movement and transportation infrastructure. The rapid urbanization significantly impacts the expansion of the Saudi elevator and escalator market. In addition, rising demand in business and domestic structures for commercial and premium elevators and stairs, and increased government spending on building development initiatives are boosting the market growth. The Saudi government has invested USD 500 billion in 285 municipal townships for smart city projects in 2021, driven by increased demand for high-rise structures due to rapid urbanization and relocating people to metropolitan areas.
The market is poised to achieve a robust CAGR of 6.65% between 2023 and 2030. The growth is attributed to the surging demand for the modernization and enhancement of existing elevator and escalator systems, the rising trend of home automation, and smart residences. The rising need for environment-friendly and energy-efficient elevators and staircases, coupled with the burgeoning popularity of mid-rise buildings in urban areas, are the key drivers. The urbanization trend is noteworthy, with the proportion of the global population residing in cities rather than rural areas skyrocketing from 20% in 1950 to approximately 80% in 2020. Projections indicate this figure will surpass 90% by 2050. The urban population surge intensifies congestion, particularly in the commercial and public transportation sectors.
The Development of Smart Cities Augments Market Growth
Smart cities in Saudi Arabia are increasing the demand for elevators due to their high-rise buildings and integrated urban infrastructure. These cities prioritize sustainability and energy efficiency, leading to the adoption of modern and eco-friendly elevators that reduce energy consumption, ensure efficient vertical mobility for residents and workers. Eight newly planned cities, primarily situated along Saudi Arabia's western coast bordering the Red Sea, are undergoing extensive development with an investment exceeding USD 575 billion. These projects aim to provide over 1.3 million new residential units, more than 3 million square meters of top-tier office spaces and 100,000 hotel rooms, by end of 2030.
Smart cities, including mixed-use developments and commercial complexes, require elevator solutions to optimize traffic flow and enhance accessibility. The integration of smart technologies like IoT sensors and predictive maintenance systems in elevators aligned with these technological goals, which increase the demand for intelligent elevator solutions. In Saudi Arabia, the development of smart cities drives the need for advanced, energy-efficient, and technologically integrated vertical transportation systems.
Contribution from Tourism Industry
Saudi Arabia has been promoting tourism as part of its Vision 2030 plan. The initiative has led to the construction of hotels, resorts, and entertainment complexes across the country. These hospitality and leisure facilities often feature high-rise buildings with multiple floors, increasing the demand for elevators to ensure a pleasant experience for guests. Thus, the tourist sector has contributed significantly to the expansion of the elevator and escalator market in Saudi Arabia. As the nation continues to draw more tourists, there is a greater need for modern and efficient transportation networks. Many of Saudi Arabia's new hotels and commercial buildings are geared towards tourists, and they require sophisticated vertical transit systems to guarantee a smooth movement of people and products. As a result, there is a greater demand for elevators and escalators that are both useful and visually pleasing. Furthermore, the Saudi government is significantly investing in infrastructure development, including building airports, shopping centers, and other tourism attractions. This has resulted in a thriving market for elevators and escalators in Saudi Arabia.
Rising Demand for Commercial Buildings
Saudi Arabia's commercial real estate sector has led to office buildings and mixed-use development, with elevators playing a crucial role in facilitating vertical transportation. Consequently, the surging demand for commercial properties in Saudi Arabia drives the elevator and escalator market forward. Commercial buildings in the region are characterized by their impressive height, contemporary architecture, and advanced amenities, necessitating sophisticated and high-performance elevator and escalator systems.
The office segment, particularly in Riyadh, the commercial epicenter, is experiencing an unprecedented surge in demand, with Grade A office space reaching an occupancy rate of 97%. Riyadh and Jeddah and the Dammam Metropolitan Area (DMA) are witnessing consistent growth in office spaces. In Riyadh, specifically, Grade A and B office spaces achieved 97% and 85% occupancy rates, respectively, in the first quarter of 2023. According to the Council of Tall Buildings Urban Habitat (CTBUH), Saudi Arabia has experienced the highest year-over-year growth rate in buildings exceeding 150 meters in height, soaring from 4% in 2008 to an impressive 37% in 2018, boasting the highest number of such tall structures.
Impact of COVID-19
The construction sector witnessed a decline due to lockdowns and social distancing measures, leading to reduced demand for elevators and escalators. As restrictions ease and construction activities resumed, the market is poised for gradual recovery. Additionally, the adoption of smart and energy-efficient elevator and escalator systems is expected to drive the future market growth. Consequently, the Saudi Arabia elevator and escalator market is forecasted to experience a moderate expansion post-COVID-19, aligning with the gradual recovery of the construction industry.
Saudi Arabia Elevator and Escalator Market: Report Scope
“Saudi Arabia Elevator and Escalator Market Assessment, Opportunities and Forecast, 2016-2030F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative quantitative assessment of the current state of Saudi Arabia elevator and escalator market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, COVID-19 impact, opportunities, and forecast between 2023 and 2030. Additionally, the report profiles the leading players in the industry mentioning their respective market share, business model, competitive intelligence, etc.
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