Despite ongoing global economic challenges, the Middle East’s tourism industry has experienced the strongest post-pandemic recovery worldwide, according to HSBC.
According to the bank’s latest ‘Jet, Set, Go!’ research study, the area, which is home to the largest Arab economy in Saudi Arabia and the global commercial and leisure centre of the UAE, is exceptional in that it saw a “total recovery” in terms of visitor arrivals in the first quarter of 2023.
In comparison to the same period in 2022, the number of visitors increased by 15% in the first three months of 2023.
According to the research, the Middle East’s tourist industry has recovered to a much larger extent than Europe, which came in second place and saw visitor numbers reach 90% of pre-COVID levels.
Top international tourist destinations including Saudi Arabia, the UAE, Qatar, and Turkey saw large increases in tourist spending.
“The Middle East region saw the strongest performance in terms of recovery in tourism and is the first region in the world to recover beyond pre-pandemic numbers,” said Maitreyi Das, an economist at HSBC Securities and Capital Markets who prepared the research.
According to the first quarter of 2023, “Qatar and Saudi Arabia are the best-performing tourist destinations globally.”
One of the key pillars of Middle Eastern countries, particularly the six-member economic bloc of the Gulf Cooperation Council (GCC), that are attempting to diversify their economies away from oil is the development and expansion of the tourist sector.
In order to reach its goal of 100 million visitors annually by 2030, Saudi Arabia is investing billions of dollars in the growth of its tourism industry.
Asfar, the Saudi Tourist Investment Company, was established in July 2023 to aid in the expansion of the travel and tourism industries by the Kingdom’s sovereign fund, the Public Investment Fund.
According to a statement released at the time by the PIF, Asfar would invest in new tourism initiatives and create tourist hotspots around Saudi Arabia with hospitality, attractions, shopping, and food and beverage options.
The PIF-owned AlUla Development Company began operations earlier in 2023 with the goal of making the city a popular travel destination on a worldwide scale.
A fully owned subsidiary of the PIF, Saudi Entertainment Ventures (Seven), said in November 2022 that it intended to invest 50 billion Saudi riyals (USD 13.3 billion) to build 21 integrated entertainment destinations across 14 Saudi cities.
The second-largest economy in the Arab world, the UAE, is making significant investments to grow its tourism industry.
The vice president and ruler of Dubai, Sheikh Mohammed bin Rashid, said in May that Dubai had the greatest visitor expenditure in the region, at Dh121 billion (USD 33 billion), up 70% from 2022.
At the time, he stated, “We have set a target of reaching 40 million tourists within seven years and increasing the contribution of the tourism sector to our GDP [gross domestic product] to Dh450 billion.”
According to HSBC, the Middle East has the highest percentage of global GDP derived from tourism, at 5%, indicating that “the region may benefit from the ongoing recovery in the year ahead.”
It said, “Asia Pacific is second, with more than 4% of the region’s GDP coming from tourism.”
Additionally, international tourism receipts increased to USD 1 trillion last year, up 50% from the level recorded in 2021.
Comparing each region’s recovery, Europe experienced the most dramatic improvement (87% of pre-pandemic levels), followed by Africa (75%), the Middle East (70%), and the Americas (68%).
“Asia destinations earned about 28% of pre-pandemic revenues last year due to prolonged border shutdowns, which is likely to be up sharply in 2023,” HSBC added.
Turkey ranked fourth globally among regional travel destinations in 2022, with tourism receipts exceeding (by 104%) those from before the COVID-19 pandemic.
The rate at which air traffic seat capacity has expanded is one of the elements determining how quickly the tourism industry recovers, according to the HSBC report.
According to perceptions, 40% of individuals believe that the Middle East has already seen a tourism revival, while 20% believe that this will happen by the end of 2023. With international visitors up 15% from Q1 2019, the Middle East was the only region to surpass pre-pandemic levels of tourism in the first quarter of 2023.
In the same period compared to pre-COVID levels, Europe enjoyed tourism numbers that were second only to 2019 figures, according to a recent HSBC analysis.
Tourist arrivals were down 20% globally, 14% in the Americas, 46% in Asia-Pacific, and 12% in Africa from pre-COVID levels.
According to the most recent information from HSBC’s research on post-pandemic tourism, tourist spending or receipts in Europe surpassed pre-pandemic levels by around 85% in 2022, those in Africa by about 75%, and those in the Middle East by about 70%. At fewer than 30% of pre-pandemic levels, Asia Pacific fell further behind.
Dubai Airport declared earlier in August 2023 that 41.6 million passengers used the airport in the first half of 2023, reaching pre-pandemic traffic levels.
According to the survey, the Middle East has the biggest percentage of GDP that comes from tourism at 5%, followed by Asia-Pacific, Africa, and Europe at roughly 4.5%, and the Americas at 3%.
According to HSBC data, France was the top tourist destination in 2019 with over 90 million visitors, followed by North American and European nations.
According to the figures, Saudi Arabia received over 18 million visitors, the UAE received more than 20 million, and Turkey received over 50 million.