Building the right capacity in Saudi Arabia’s second-largest city
Jeddah, the Kingdom’s second-largest city, occupies a strategic location along the Red Sea, functioning as a vital hub for trade and logistics that connect Saudi Arabia to international markets. The city also serves as the primary gateway for millions of Hajj and Umrah pilgrims annually.
As the most populous city in the Western Province and a major economic hub of the Makkah region, it accounts for about 12 per cent of the Kingdom’s population. The city’s population is projected to increase from 3.8m in 2022 to 4.9m by 2040, according to projections by Oxford Economics.
In addition, Jeddah serves as a domestic medical tourism hub for the western region. With its relatively higher expatriate population compared to Saudi nationals, the city also continues to experience strong demand for healthcare services, particularly within the private sector. In addition to population growth, large-scale urban development and changing demographics are creating new demand for healthcare services, while Vision 2030 reforms continue to encourage greater private sector participation.
Yet the latest analysis from Knight Frank in its report Healthcare in Saudi Arabia: Opportunities in Jeddah suggests that the future challenge is not simply about building more hospitals. The bigger question is whether healthcare providers can develop the right services, in the right locations, for the patients who will need them most.
A growing city
Knight Frank highlights plans for approximately 119,000 new homes, 1.5m square metres of office space, 1.5m square metres of retail space and thousands of additional hotel rooms by 2030. Major projects including Jeddah Central, the expansion of Jeddah Islamic Port and the proposed metro network of 81 stations covering 160 km will further reshape the city over the next decade.
The city’s role as a religious tourism gateway adds another layer of complexity. More than 5.3m travellers arrived through Jeddah’s airport during the first half of 2025, while over 1.7m pilgrims performed Hajj, 90 per cent of whom were non-Saudis. Mandatory health insurance requirements for pilgrims are expected to further increase healthcare utilisation.
The city’s healthcare trajectory is reinforced by its recent designation as a WHO-accredited Healthy City. Alongside Madinah, Jeddah became one of the first cities in the Middle East with a population exceeding 2m to achieve this distinction. This accreditation reflects the effectiveness of Saudi Arabia’s Healthy Cities Program and underscores Jeddah’s commitment to advancing public health and sustainability. The recognition, based on performance against more than 80 international indicators across nine domains, demonstrates the strength of the city’s multi-sectoral collaboration in improving health outcomes.
As new communities emerge, healthcare providers face increasing pressure to ensure services are available where people actually live. While younger age groups will continue to grow, the fastest increase will occur among older residents. The population aged between 40 and 64 is projected to grow by 50 per cent by 2040, while the population aged over 65 is expected to more than double.
Reimagining Jeddah’s healthcare needs
This demographic shift has important implications for healthcare planning. As populations age, demand typically moves away from acute episodic treatment and towards ongoing management of chronic disease. Specialties such as cardiology, endocrinology, orthopaedics, urology and rehabilitation become increasingly important. Demand for physiotherapy, home care and long-term support services also rises.
Many healthcare systems struggle because infrastructure has been designed around yesterday’s needs rather than tomorrow’s population. Jeddah’s bed density remains below both the Saudi and global averages. The city currently has approximately 1.8 beds per 1,000 population, compared with a national average of 1.9 and a global benchmark of 2.9. When benchmarked against international standards, Knight Frank estimates that Jeddah could face a shortfall of around 4,100 beds by 2030. However, when measured against current Saudi averages, there is no immediate city-wide requirement for major additional inpatient capacity.
Much of Jeddah’s private healthcare investment is following the city’s northward expansion. Affluent residential districts along the Red Sea coast, including Ash Shati, Al Zahra and Obhur, have seen significant growth in both population and commercial development over the past decade. Hospitals such as Al Salama Hospital, located on the northern waterfront corridor, are positioned to serve these expanding communities, reflecting a broader trend in which healthcare provision increasingly follows demographic and economic growth patterns.
The eastern part of the city currently lacks inpatient facilities and may require approximately 500 beds to address local demand in this mid-to-low income zone. In contrast, more affluent northern Jeddah already hosts several established private hospital operators, most running at more than 75 per cent occupancy, offering opportunities for further premium and specialist services. Success therefore depends less on the total number of beds and more on understanding where patients are located and which services they need.
Providers report continued demand for inpatient services, particularly where quality and patient experience are strong. Several specialty areas continue to perform particularly well, including obstetrics and gynaecology, paediatrics, orthopaedics, ENT and internal medicine. Meanwhile, operators report growing interest in day surgery facilities and long-term care services. Existing long-term care providers are achieving occupancy levels above 90 per cent and several are already planning expansion.
Long-term care
As healthcare systems mature, long-term care often becomes one of the most underdeveloped parts of the system. Acute hospitals are designed to treat illness, but many patients ultimately require rehabilitation, chronic disease management or ongoing support rather than acute intervention. Knight Frank estimates that Jeddah will require approximately 2,430 long-term care beds by 2040. Based on typical facility sizes, that equates to around 12 to 16 dedicated long-term care facilities.
An ageing population will inevitably increase demand for rehabilitation, elder care and supported living services. At the same time, Saudi Arabia continues to experience a significant burden from non-communicable diseases, including cardiovascular disease, diabetes and kidney disease. These conditions often require ongoing management rather than short hospital stays.
The report notes that patients who require long-term care frequently occupy acute hospital beds because dedicated alternatives remain limited. This situation creates inefficiencies across the wider healthcare system, and for investors and providers, may represent one of the most important opportunities in the market over the next decade.
Patient-centred care
While much of the healthcare sector focuses on technology, infrastructure and operational efficiency, Al Salama Hospital has centred its strategy around what it describes as the humanisation of healthcare. Located in Jeddah’s Ash Shati district on the city’s northern Red Sea waterfront, Al Salama Hospital occupies a strategic position within one of Jeddah’s fastest-growing healthcare markets. The hospital serves affluent residential communities along the Corniche and northern expansion corridor, an area that has attracted significant private healthcare investment as the city continues to grow northwards.
Al Salama has developed an internal framework known as the Humanometer, designed to measure and improve the human aspects of care delivery. The approach links leadership, processes, staff engagement and patient experience into a single organisational philosophy recognising that, as competition increases, hospitals cannot differentiate themselves solely through buildings, equipment or technology.
Patient experience, staff engagement and clinical outcomes are becoming increasingly important factors in organisational performance. According to CEO Dr Khalid Alem, Al-Salama integrates value-based healthcare principles into all clinical processes, combining patient-centricity, evidence-based medicine, and outcome-driven diagnostics, ensuring that care remains both clinically excellent and profoundly humane.
Understanding the opportunity
Jeddah’s healthcare market remains attractive because the underlying demand drivers are strong. Population growth, economic expansion, religious tourism and demographic change all support continued investment. However, the report suggests that future success will depend on a more sophisticated understanding of healthcare demand.
Technology remains important, particularly as artificial intelligence, telemedicine and digital health continue to evolve. Yet the report’s central argument is that innovation should strengthen the human relationship between clinician and patient rather than replace it.
The opportunity is not simply to build more hospitals but to develop the right mix of acute care, specialist services, long-term care and community-based support by placing services where patients need them. Most importantly, it is to create healthcare experiences that combine clinical excellence with genuine patient-centred care.
knightfrank.com.sa
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