Abu Dawud

Benefits and Issues:
This is a recommended (mustahabb) act.
Especially when a traveler is returning from jihad or from Hajj.
However, there should be no element of ostentation or seeking fame in it.
It is also reported regarding the scholars and hadith transmitters,
that when their arrival in a city was expected, people would welcome them in a very excellent manner.

Hadith Commentary:
➊
Ibn Qayyim rahimahullah has denied that Thaniyyah al-Wada‘ is towards Makkah and not towards Tabuk. It is located in the opposite direction from Tabuk, but it is possible that there was a Thaniyyah al-Wada‘ in the direction of Tabuk as well, where the people of Madinah would go to bid farewell to travelers.

➋
Imam Bukhari rahimahullah has indicated through this hadith that the Messenger of Allah sallallahu alayhi wa sallam used to write invitational letters to the heads of state in the year of the Battle of Tabuk. Although some narrations suggest that he wrote letters to Caesar in the year of the Treaty of Hudaybiyyah, it is possible that he wrote invitational letters to him twice. Just as when he wrote a letter to the ruler of Abyssinia, Najashi, he accepted Islam and the Prophet sallallahu alayhi wa sallam performed his funeral prayer. After him, when another Najashi became king, the Prophet sallallahu alayhi wa sallam also wrote a letter to him, but he did not accept Islam; rather, he died upon disbelief.

(Fath al-Bari: 6/162)
And Allah knows best.

Hadith Commentary: In the above hadith, it is mentioned that people went as far as Thaniyyat al-Wada‘ to welcome him. This took place upon the return from the expedition of Tabuk.