Tourism Transformation and Oil Price Dynamics in Saudi Arabia: An ARDL Analysis of Religious and Non-Religious Tourism

This study provides strong evidence of structural asymmetries between religious and non-religious tourism demand in Saudi Arabia over the period 2015Q1–2024Q4. The unit root results indicate that all variables are integrated of order one, supporting the application of the ARDL framework. The bounds test confirms the existence of a long-run equilibrium relationship for both religious and non-religious tourism. However, the strength and determinants of these relationships differ across tourism segments, providing evidence of structural heterogeneity in tourism demand. The empirical findings show that global oil prices do not have a statistically significant direct effect on either tourism segment in both the short run and the long run, suggesting that their influence is indirect and transmitted through broader macroeconomic channels. In contrast, non-oil GDP exerts a positive effect on non-religious tourism and remains weakly significant in the long run, highlighting the critical role of economic diversification and sustained income growth under Vision 2030. Religious tourism, however, remains largely unaffected by economic growth, reflecting its institutional and policy-driven nature. The COVID-19 pandemic had a severe and persistent negative impact on tourism demand, with a more immediate and pronounced effect on religious tourism due to the suspension of Hajj and Umrah activities. Adjustment dynamics indicate that both tourism segments converge toward their long-run equilibrium following short-run shocks, although religious tourism exhibits a somewhat faster speed of adjustment. Diagnostic tests confirm that all econometric assumptions are satisfied, supporting the robustness and reliability of the results.