A promising surge awaits the Middle East travel industry, with a projected growth of 40% between 2022 to 2026, according to the latest Middle East Travel Market Report. This annual deep-dive, a collaborative effort between Insight Out Consulting and global research leader Phocuswright, has been shedding light on the region’s tourism dynamics since 2012.
Interestingly, the Kingdom of Saudi Arabia and the United Arab Emirates are poised to be the pivotal drivers behind this anticipated growth. The two nations are rapidly evolving as leading travel and tourism hubs, setting benchmarks for the broader region.
With 15 years of dedicated regional research under their belt, Insight Out Consulting has been a torchbearer for the Middle Eastern travel and hospitality sectors. Their comprehensive approach, backed by primary data collection and high-level interviews, has shaped industry strategies for giants like Amadeus, Jumeirah, and Seera.
The recent Phocuswright report is a repository of insights. It encompasses evolving distribution trends, sector-specific analyses—including air, hotel, and car rental—and a dedicated focus on major travel markets such as the UAE, KSA, Egypt, and Qatar.
Commenting on the rich tapestry of findings, Li Hawkins, Managing Director of Insight Out Consulting, shared, “Our alliance with Phocuswright consistently unveils the evolving nuances of the Middle East’s travel landscape. We’re witnessing an industry in flux, with a pronounced lean towards digital platforms and a thirst for immersive, experiential journeys. Modern travelers in the Middle East are gravitating towards deeper, culturally anchored experiences, a departure from the generic tourist offerings.”
Key Takeaways from the Report:
Saudi Arabia: KSA is the fastest-growing travel market in the region, with a 107% increase in 2022 gross bookings compared to 2021 figures and is forecasted to grow by a whopping 65% by 2026. The Saudi government’s alignment with the private sector to develop mega projects such as the Red Sea Project and NEOM is expected to attract millions of tourists to Saudi Arabia in the coming years. The country recently revealed its plans to invest $800 billion in its tourism sector over the next 10 years, as part of its Vision 2030. Additionally, the government has also invested in improving critical infrastructure, such as airports, roads and hotels in order to realise this vision. Saudi Arabia has also eased visa requirements, which has significantly impacted the number of leisure tourists coming into the country.
United Arab Emirates: The UAE was one of the first destinations to fully recover its travel and tourism activities and is primed and ready to capitalise on the growing demand for travel and tourism, maintaining its leading position as the largest travel market in the Middle East. Overall, the travel market in the UAE witnessed significant growth in 2022, a 101% year-on-year increase from 2021, and is forecasted to grow by a further 10% in 2023. This growth is largely supported by the national government, which has invested significant funds and launched several initiatives such as the UAE Tourism Strategy, which aims to attract investments worth AED 100 billion and host 40 million hotel guests by 2031. The UAE airline sector is also one of the most developed in the world, with Emirates, Etihad Airways and FlyDubai being among the top 50 airlines in the world. Furthermore, the UAE’s hospitality sector is also rapidly expanding and is expected to witness the number of hotel rooms reaching over 200,000 keys by 2030, driven by the increasing number of tourists visiting the UAE and the growing demand for luxury hotels.
Qatar: Qatar’s tourism sector witnessed a dramatic recovery in 2022, driven by the FIFA World Cup event, the continued expansion of Qatar’s infrastructure, and the increasing popularity of the country as a leisure destination. The Qatar National Tourism Council (QNTC) is investing heavily in the country’s tourism sector, with plans to develop new hotels, attractions and cultural experiences, and has forecasted to welcome six to seven million visitors annually by 2030. Qatar Airways stands as a testament to this vision and has worked to continually expand its global footprint to support the country’s tourism sector.
Egypt: While Egypt’s tourism levels are still below pre-pandemic levels, the country has witnessed significant improvement since 2020. This recovery is driven by a number of factors, including the depreciation of the Egyptian pound, and the government’s efforts to promote the country as a safe and attractive tourist destination. Domestic tourism has been on the rise in Egypt in recent years, as Egyptians become more interested in exploring their own country. Additionally, Egypt’s wide variety of natural attractions has also made it well-suited for adventure tourism, which is another growing trend in the region.
Digital Maturity and Transformation: 2022 was a remarkable year for online travel bookings in the Middle East, as the region witnessed a staggering 103% increase in online booking values compared to 2021. This growth has been largely driven by the increase in tech-savvy travellers, the increased adoption of customer-facing tech solutions such as AI chatbots, mobile apps, and loyalty programs, and the integration of more advanced online back-end systems, such as booking engines and distribution channels, by travel suppliers, particularly hotels. With digital maturity and transformation on the rise in the Middle East and online penetration continuing its ascent, the online booking market is experiencing rapid expansion. Online bookings are anticipated to account for 50% of the market’s bookings in the UAE and KSA by 2026. In this fast-paced and highly competitive market, where guest experiences and operational efficiency are paramount, it is crucial for players to continually maintain, optimize and adapt their technology stack.
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Photo – top of page – NEOM
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Article written by Diane Lefebvre
