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GCC outperforms global indicators in tourism growth, spending
June 2, 2018, 3:44 pm

The travel and tourism sector in the GCC now outperforms global tourism indicators in terms of growth and spending, with projected Compound Annual Growth Rate (CAGR) of tourism contribution to GDP being 5 percent for the GCC, compared to 3.8 percent worldwide. Additionally, the leisure and business spending growth for the next 10 years is expected to increase at an annual rate of 4.6 percent and 5.4 percent respectively, compared to worldwide averages of 4.1 percent and 3.2 percent.

Furthermore, the tourism industry in the Middle East and North Africa (MENA) region is expected to reach US$350 billion by 2027, according to the latest report from the World Travel & Tourism Council (WTTC). The report also found that the direct contribution of travel and tourism to the total GDP of the Middle East was 3.3 percent or over $81 billion in 2016. This was forecast to rise by 4.6 percent per annum to reach more than $133 billion y 2027. Meanwhile, the WTTC expects travel and tourism’s contribution to GDP of North Africa to increase from $26.3 billion in 2016 to nearly $40 billion by 2027.

In the GCC region, the UAE and Saudi Arabia, which account for around 50 percent of the MENA tourism market, are expected to grow at a CAGR of 5 percent over the next 10 years. Dubai is undoubtedly the leader in travel and tourism in the region with 15.79 million international guests arriving in 2017. This number is projected to rise to 20 million by 2020, when Dubai will host the first ever World Expo to be held in the surrounding region, including Middle East, Africa and South Asia.

Currently the key regional industry drivers are the leisure and religious tourism sectors. Leisure tourism generated approximately $115 billion to the region in 2017 with Dubai attracting 15 million visitors in 2017 and being ranked as the sixth most visited city in the world. The UAE is expected to account for 90 percent of leisure tourism in the area following the opening of multiple leisure attractions. The MENA region also has one of the highest demands for religious tourism due to its holy places. Saudi Arabia attracts millions of pilgrims each year for Hajj and Umrah religious rites.

Nurturing the cultural heritage also spurs growth for tourism in the region with the opening of The Louvre museum and several other cultural projects in Abu Dhabi. Moreover, medical and business tourism are emerging in the region, with the Middle East currently considered one of the fastest growing markets for these segments. Dubai and Abu Dhabi are the main cities to attract medical tourism due to their large network of international hospitals, advanced healthcare centers and research departments.

Meanwhile, according to the World Economic Forum’s Travel and Tourism Competitiveness Report 2017, the MENA region, with 2 million international arrivals in 2015, has in recent years lured global travelers. The region’s global share of international tourist arrivals at 6 percent in 2010 is also projected to jump to 8 percent by 2030. Better ICT infrastructure, lower prices, partial improvements in international openness, and some progress in nurturing cultural heritage, have all combined to create more favorable conditions for the sector. The report also pointed out that there was plenty of potential for growth in the sector, as many natural and cultural resources remained unexploited in the area.


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