In recent years, the six Gulf Cooperation Council (GCC) countries have emerged as leading tourism destinations. UAE Minister of Economy Abdulla Bin Touq said in May, “The GCC tourism sector continues to witness increased growth and has successfully demonstrated its potential as a key contributor to the growth of our national economies.”
Gulf countries’ tourism ambitions are driven by economic stability, developed infrastructure, and an encouraging investment climate. “GCC countries can become some of the most important tourist destinations worldwide because of advanced infrastructure at the level of transportation, hospitality, etc,” Qatar Tourism Chairman Saad bin Ali Al Kharji said at the 8th Meeting of the GCC Tourism Ministers in February. “Their strategic location makes them a link between East and West, which enables our countries to accommodate large numbers of visitors.”
Within the GCC, Saudi Arabia and the UAE lead the way. According to the Global Travel Trends Report 2023 by ForwardKeys, a data management company, Saudi Arabia and the UAE are among the top 10 tourism destinations globally in the growth of international visitors.
Mohamed Al Rais, deputy managing director at Al Rais Travel, based in the UAE, noted in November that “Saudi Arabia and the UAE … complement one another’s tourism offerings and can encourage visits to both, similar to central Europe, where visitors tour several countries during one trip.”
Tourism overview
All six GCC nations — Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and the UAE — are investing heavily to diversify their respective economies away from oil.
That has accelerated progress in other sectors, such as tourism. “The increasing diversity of offerings, the quality of the hospitality industry, and the natural beauty in so many places are turning previously untapped touristic destinations into destinations of choice,” said Adel Afiouni, a partner and head of Europe and the Middle East at finance platform Exos in March.
He said tourism is a “huge opportunity” for growth in the region, adding that Abu Dhabi and Saudi Arabia can become global destinations similar to Dubai.
According to the GCC Destination Tourism Market Insights, 2023 update report, “The total number of international arrivals in GCC countries amounted to 49 million in 2022. The region garnered total inbound expenditures of $66 billion in 2022.”
To accommodate the influx of tourists, GCC countries have expanded their hotel infrastructure. By the end of 2022, the number of hotel establishments had increased to over 10,600, with a total of more than 674,800 rooms.
This showcased the impact of tourism inflows on GDP throughout the region. According to the UAE Ministry of Economy’s data in May, “The total contribution of the GCC tourism sector to their collective GDP in 2021 was $109 billion.” The ministry said GCC countries aim to increase tourist spending by 8% annually to reach $188 billion by 2030.
The report added that “leisure is the most popular purpose for travel, accounting for more than 60% of all international arrivals. The leading destination for leisure is the UAE, followed by Kuwait.”
Lower barriers
As part of ongoing efforts to elevate tourist inflows, the GCC is introducing a unified tourist visa. Al Kharji believes such agreements and similar mechanisms will significantly increase tourism integration and cooperation among the Arabian Gulf nations.
The unified visa project was approved during the 44th GCC Summit in December. Its ultimate goal is to create a tourism and travel synergy among GCC nations by allowing seamless travel between them.
“The development of a unified tourism route connecting all GCC countries and drawing the features of the tourist trip for visitors will further promote tourism and economic integration at the regional level,” Touq, the UAE official, said in May. That should increase hotel revenue, tourist expenditures, and length of stay.
Furthermore, that should also lead to more economic diversification as tourism increases its contribution to those countries’ GDPs. Kuwait Minister of Media and Culture Abdulrahman Badah Al Muteri added, “Promoting the concept of intra-tourism and working to improve the quality of this vital and important sector to open the doors of tourism to visitors and enhance a vital environment for economic growth and provide opportunities.”
Focusing on tourism is a sustainable strategy. GCC Secretary-General Jassim Mohamed Al Bedawi said in February, “By enhancing tourism cooperation and developing joint strategies, we can make the most of our rich history, natural and cultural resources, and the uniqueness of our region to upgrade our position as a leading tourist destination in the world.”
However, to get the most from the unified visa, Gulf countries must prioritize collaboration and enhance visitor experience. “While it’s clear that healthy competition will continue to play an important role in strengthening the GCC’s world-class tourism offering, it was also encouraging to hear how collaboration is enabling the region to become more than the sum of its parts in terms of attracting global travelers,” said Danielle Curtis, exhibition director, Arabian Travel Market.
Saudi surge
Saudi Arabia’s tourism represents a promising future for the country, providing an avenue for economic diversification beyond oil exports. According to the BMI’s Saudi Arabia Tourism Report 2023, Saudi Arabia’s annual arrival rate is expected to grow 18.9% in 2024 to 31.3 million.
Ahmed Al-Khateeb, Saudi minister of tourism, noted during the Manafea Forum in Medina in March that by the end of 2023, the sector was responsible for 5% of GDP. He added that the country aspires to raise the sector’s share of GDP to 10% by 2030.
The latest trends report 2024 from Almosafer, Saudi Arabia’s travel company, revealed that domestic tourism plays a significant role, with 40% of bookings and 83% of local travelers prefer luxury accommodations.
Mecca, Riyadh, Jeddah, Al Khobar, and Abha are the most visited destinations. Tabuk, Hail, and AlUla are the fastest-growing destinations, given the popularity of luxury resorts like Banyan Tree AlUla.
Adventure and nature-based activities are also significant trends appealing to domestic travelers. Muzzammil Ahussain, CEO of Almosafer, said, “Our latest data showcases the continued growth of domestic tourism in Saudi Arabia, reflecting the Kingdom’s rise as an attractive destination for local travelers who are increasingly showing a preference to explore the wealth of both natural and cultural landscapes and experience the growing range of unique entertainment and adventure-based activities.”
The growth of the Saudi tourism sector also contributes to reducing unemployment. As reported by Arab News in March, Al-Khateeb said the country has 940,000 tourism and hospitality jobs and aspires to reach 1 million by 2030.
He said the government has allocated nearly $100 million annually to train over 100,000 Saudi nationals for positions in the tourism sector.
Saudi Arabia is also working to diversify its tourist destinations. Since 2017, the Kingdom has been actively working on the Red Sea Project developed on the west coast of Saudi Arabia.
John Pagano, group CEO of Red Sea Global, said in an interview with Economy Middle East in May that, upon completion, the project should generate SAR 22 billion ($5.9 billion) for the country’s economy. Pagano said the project promotes investment opportunities, and “Red Sea Global has awarded SAR 64 billion worth of contracts since construction began, with over 70% going to Saudi businesses.”
Booming market
According to the UAE minister of economy, as of May, “the non-oil sector … accounts for 74% of the country’s total GDP.”
The World Travel and Tourism Council’s (WTTC) 2024 Economic Impact Research (EIR) has revealed that in 2023, the UAE tourism sector “grew by more than a quarter (26%) to contribute a record-breaking AED 220 billion ($59.9 billion) to GDP representing 11.7% of the entire economy.”
That growth should continue this year. The WTTC forecast indicates the sector’s contribution to the country’s GDP will exceed AED 236 billion ($64.25 billion) in 2024. The report added travel and tourism accounted for 809,000 jobs by the end of 2023.
“The remarkable growth in both employment and visitor spending is a testament to the UAE’s strategic vision and commitment to enhancing its travel and tourism,” said Julia Simpson, WTTC president and CEO,
According to the report, international visitor spending surged 40% in 2023 to AED 175 billion ($47.6 billion). By the end of 2024, that should grow by 10%.
While the UAE promotes travel in all seven emirates, Dubai, the second biggest emirate in the UAE, and Abu Dhabi, UAE’s capital, have taken the lead in investing in tourism.
In an interview with Economy Middle East in May, Issam Kazim, CEO of Dubai Corporation for Tourism & Commerce Marketing, said it welcomed a record 17.15 million international overnight visitors in 2023, representing 19.4% year-on-year growth. During the first quarter of 2024 alone, the city welcomed 5.18 million international overnight visitors.
The UAE also works to boost Abu Dhabi tourism. In May, Saleh Al Geziry, director general for tourism at DCT Abu Dhabi, told Economy Middle East the plan is for Abu Dhabi’s contribution to GDP to nearly double by 2030.
Invest and market
While the tourism travel sector holds promise for the region, the GCC needs to prioritize investment in infrastructure to accommodate expected growth. Abdullah Al Saleh, undersecretary of the UAE Ministry of Economy, noted in 2023 that GCC countries “look forward to capitalizing on the destination and tourism boom witnessed by the region to support the sustainable growth of this vital sector and stimulate more investments in it.”
He said countries should undertake marketing efforts to promote the GCC region as a unified destination and develop integrated tourism packages that cover multiple markets.
The WEF Travel and Tourism Development Index 2024 noted that while promoting traditional tourism has much potential, the GCC must think ahead. “There exists a clear opportunity for developing economies to use their tourism resource potential as a catalyst for broader economic development, provided they … invest in sustainable tourism practices.”
