Reduced Climate Vulnerability, Visa Liberalization and Tourism Development in Saudi Arabia: Evidence Under Vision 2030 Framework

The development of the tourism sector is one of the main objectives of the Vision 2030 reform package introduced by Saudi Arabia in 2016 to develop a resilient, knowledge-based and competitive economy. However, the determinants of tourism development from the perspective of reduced climate vulnerability and visa liberalization are rarely researched in the case of Saudi Arabia. Accordingly, this research paper focuses on investigating the impacts of reduced climate vulnerability and visa liberalization policy on tourism development using data from Saudi Arabia for the period 1995–2024. This study measures climate vulnerability using the ND-GAIN Index, which captures both climate vulnerability and climate readiness, while the visa liberalization policy is captured through a dummy variable. For the estimation of the model, this study uses the Autoregressive Distributed Lag (ARDL) cointegration approach, which simultaneously produces both the long-run and short-run relationships between the independent variables and the dependent variable. This study’s findings demonstrate that reduced climate vulnerability or greater national readiness for climate change is positively linked with increased international tourist arrivals both in the long-run and short-run horizons. Similarly, the results also prove the importance of the visa liberalization policy on the development of the tourism sector in the long run. Moreover, the results indicate that trade openness and income level are the main driving forces behind the development of the tourism sector in the long run. Furthermore, this study’s results further show that the rate of inflation is detrimental to the development of the tourism sector, as it directly enhances the cost of traveling. This research study contributes to the sustainability discourse by visualizing how policy-driven interventions can safeguard tourism growth in climate-vulnerable economies. Finally, this study offers important policy implications related to sustainable tourism planning and economic diversification under the framework of Vision 2030 in Saudi Arabia.