Robert O'Hanlon, partner tourism, hospitality and leisure Deloitte Middle East writes for TTN on the future of the tourism economy in the region
DESPITE a fall in hotel occupancies in most countries in the Middle East region in 2009, the outlook remains positive as GCC countries are expected to continue economic diversification away from oil based activities and attract significant investments. The travel and tourism economy will emerge as a significant contributor and a beneficiary of increasing economic activity in the region. The UAE, Saudi Arabia and Oman stand out as the players who have invested early and are well placed to reap benefits in the years ahead.
With growth expected to be fueled through non-oil export earnings and services, the UAE is spearheading numerous development interventions, helping the economy recover after a challenging 2009. The UAE government is expected to maintain a positive attitude to private sector investment. With a forecasted 15.7 per cent of the total workforce employed in the travel and tourism economy in 2009, the country already has the necessary infrastructure and assets in place to boost the tourism economy by attracting more visitors to the region through customised travel packages tailored to the needs of visitors.
The outlook of the travel and tourism economy is forecasted to expand at an annualised growth rate of 2.8 per cent over the years 2010 to 19 as per the World Travel and Tourism Council (WTTC), a target that the country will aim to transcend given its advantageous position as the gateway to the Middle East. Despite a slow down in 2008 and 2009, the UAE's hotel sector continues to command revenues per available room that are amongst the highest in the world, reflecting market recognition of the high quality of accommodation and service provided.
Saudi Arabia's economy is expected to be boosted by rising government spending and investment in infrastructure and industrial activities. The country is investing its revenues from oil-based activities to fuel investments in the non-oil sector which assume a share of just less than than 50 per cent of the economy. Domestic tourism, a recent focus area in the country, is expected to contribute significantly to the economy in the future. The travel and tourism industry is expected to grow at an annualised rate of 6.2 per cent during the period 2009 to 19 as per the estimates released by WTTC.
The first country in the GCC region to diversify its economy, Oman continues to be dedicated to economic diversification to reduce its dependency on oil-based activities. Tourism has been a key pillar of the economy and the continued dedication of the Oman Ministry of Tourism to develop this sector stands unchallenged. The travel and tourism economy is forecasted to expand at an annual rate of 7.8 per cent during the years 2009-19, placing the country in the spotlight in the entire Middle East region.
Throughout the Middle East the investment in recent years by governments into infrastructure in general and the tourism sector specifically has been without parallel. That investment, combined with the Middle East's globally strategic location, indicates that it is well positioned to benefit from any upturn in global economic activity.
Source:  03 January 2010
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