Lack of integrated vision, legal framework, and infrastructure hamper tourism
Key barriers to private sector investment in tourism sector include outdated legislation, limited lease periods, a lack of government strategy, and weak tourism infrastructure.
Tourism sector in Kuwait has been lagging its peers in the Gulf Cooperation Council (GCC) states for decades.While other countries in the region have made rapid headway in building tourism infrastructure and venues to attract local and international visitors, Kuwait tourism initiative has been mired by political standoffs, bureaucratic red-tape, inapt laws and regulations, and a lack of coordination among public and private sector.
Reports show that in 2023, Kuwaiti hotels had the lowest hotel occupancy rate in the Gulf of 41.4 percent — with room income remaining stagnant at 24 dinars.
There is no doubt that the Kuwaiti private sector has the potential to invest in the tourism industry; however, it faces several challenges that complicate its efforts.
Until recently, private sector tourism projects could not lease sites for more than three years or renew leases without government approval. Additionally, they were unable to undertake any construction work on their sites without obtaining approval from the State Property Authority. These clauses were perhaps intended to discourage tourism projects by the private sector, as no investor would be willing to invests millions of dinars on a project without guarantees of having lease contracts renewed after three years
According to experts, among the major hurdles are the absence of an overarching government strategy to develop the tourism sector, the lack of investment in tourism infrastructure, and a legislative environment that discourages tourism projects and needed legal reforms. The importance of addressing these challenges through a strategic vision, effective planning, and collaboration between the private sector and the government are key to improving tourism in the country. Additionally providing the necessary support to enhance tourism infrastructure and develop tourist destinations in Kuwait is crucial. Overcoming these challenges will boost Kuwait’s competitiveness as a tourist destination and improve the overall tourism experience.
Given the private sector’s reluctance to invest in tourism, it is essential to enact supportive laws with long-term usufruct rights, establish clear goals, develop a transparent plan and strategy for sector development, and create a specialized government body dedicated to the tourism sector.
