Tourism in the Gulf is gradually emerging as a key sector for the economic vitality and a combination of government policies, socio-economic trends, and geopolitical forces is ushering in a radical change in the travel landscape of this region, with Saudi Arabia taking the lead
IN my 25 years of experience in the travel industry, I have been able to observe the numerous factors that make a country or region attractive for tourists. While the West with its boisterous appeal and the East with its hermit charm have been a playground of aspirational holidaymakers, the Gulf Cooperation Council (GCC) countries have not traditionally been in a regular traveler’s to-do list. But that, research suggests, is changing.
The GCC is, slowly but steadily, picking up pace and generating tremendous interest in travelers. Tourism in the Gulf is gradually emerging as a key sector for the economic vitality and a combination of government policies, socio-economic trends, and geopolitical forces is ushering in a radical change in the travel landscape of this region, with Saudi Arabia taking the lead.
Amadeus recently launched a report on the GCC travel sector titled ‘Shaping the Future of Travel: Big Travel Effects’, which was researched and collated by Frost & Sullivan and Insights. The study analyses the findings of a survey of around 1,000 travellers from the region as well as the observations of thought leaders in the travel industry. Not only does it provide valuable insights into the future of industry in the GCC region, it also brings to light the factors that will influence them at a core level. The main factors are classified under five large heads: the population effect, the ‘beyond oil’ effect, the infrastructure effect, the gateway effect and the information effect.
Undoubtedly, Saudi Arabia, with its remarkable economic transformation, is set to spearhead growth in the travel and tourism sector. The country’s new cities, Rabigh, Hail, Makkah, Madinah, Jazan and Tabuk that are being developed across the country will not only become the edifice of modern age KSA and be driven by private investors, but also become the prime movers for attracting domestic and foreign investment.
The developments are expected to create more than 2 million jobs and house 4.5 million people. These multiple economic cities will be backed by an equally impressive list of new universities, colleges, and training institutes in its quest to drive industrialization through a knowledge-based economy.
The country will continue to use its hydrocarbon revenues to drive strategic infrastructural growth, a fact that is expected to trigger development in the region’s seasonal and corporate travel sector. The $7 billion Saudi Land Bridge railway project that will connect Riyadh and Jeddah and the $7 billion Heramain High-Speed Railway project that will link Makkah and Madinah are scheduled to be completed by the end of 2016 and will considerably boost intra-regional travel.
Consequently, Saudi Arabia’s demography will support the growth of the sector. With 28 million residents, KSA is the most populous country in the GCC and will constitute nearly 60 percent of the region’s population by the year 2030. Interestingly, 30 percent of the population today are under the age of 15, and will soon become ‘coming-of-age travelers’ who significantly influence the perception of travel in the region.
Interestingly, Saudi Arabia has already registered a significant rise in online travel bookings, expedited by the Arabization of website content. This is particularly relevant given that Internet penetration in the country stands at 49.7 per cent and 42 per cent of leisure travelers booking their travels using smartphones, according to the report.
Saudi Arabia’s travel sector is also influenced by the ever-increasing number of seasonal travelers from across the globe during Umrah and Haj. However, the lack of a generic tourist visa is a major barrier to inbound tourism in the country. That said, it is noteworthy to mention that the country is taking numerous steps towards dropping its barriers to GCC residents which will result in a greater number of travelers to the Kingdom. This, along with the GCC’s initiative for a region-level unified GCC visa will considerably boost tourism in the region.
Amadeus has worked as a technology partner for the Saudi Arabian travel market for decades. We have seen the tourism landscape evolve. Currently, visa barriers, insufficient tourist offerings, spotty marketing and only business related visitors have limited the sector’s contribution to its economy. But the country has a huge potential and it needs to leverage itself. We expect KSA to move into a new era, with highly educated and connected youth, developed cities, major business and leisure destinations added. We also foresee a change in the country’s overall political and social policies that will help it finally open to the world attract global travelers and contribute generously to its GDP.–Courtesy Saudi Gazette