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Tourism boom in the GCC

Not only are GCC countries diversifying their economies from being primarily oil-dependent, their tourism industries are also offering a wide variety of choices

  • By Jumana Al Tamimi, Associate Editor
  • Published: 23:21 August 18, 2008
  • Gulf News

  • Image Credit: Bloomberg News
  • The Saadiyat Island Cultural District with the Guggenheim Museum in Abu Dhabi in an artist's rendering.

Skyscrapper hotels and massive shopping centres continue to rise. Wide roads are being laid. New ideas, such as building water and theme parks, to lure people are being introduced and implemented.

Several plans, ranging from holding shopping festivals in the UAE, to cultural and entertainment events in Oman, to sports activities in Qatar, have been drawn to attract tourists, mainly from other GCC countries.

The tourism sector in the GCC region is booming, and mega projects are mushrooming to elevate the region on the world's tourism map.

To put things in perspective in financial terms, here are some of the examples that made headlines recently in the Gulf.

The UAE expects to receive 10 million tourists in 2008 compared to 8.8 million last year.

More than 30 multi-faceted entertainment resorts and theme parks are being built until 2012 with a projected investment of Dh228 billion ($62 billion), according to CMPi UAE, organisers of Middle East Attractions, Amusements, Parks, Leisure and Entertainment International Trade Exhibition (MEAAPLE) which will run in February.

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And beyond the UAE, every year, nearly 17 million travellers cross the bridge linking Saudi Arabia and Bahrain.

Hakeer, the giant Saudi developer, plans to build seven International hotels in the main Saudi cities as well as Dubai with the cost of one billion Saudi riyals. Qatar has allocated $1.4 billion to build a number of shopping centres by 2009.

In Bahrain, plans are under way to open a giant shopping centre at a cost of 25 million Bahraini dinars. Oman plans to build a tourism city or tourism integrated project, including hotels, tourist village, market, natural park, golf hotel, and malls, at a cost of $15-20 billion on an area of 34 square km. The first phase is expected to be completed in 2010.

Some press reports have estimated the overall investment in internal tourism projects in GCC to reach nearly $380 billion in the next 10 years.

But GCC officials say these figures as "conservative estimates" in view of the contributions of both public and private sectors.

Partnership

Tourism investments are carried out by private-public partnership, Gulf officials noted, where the first would provide hotels and shopping centres, while the second would provide infrastructure, such as roads, airports and communications.

At the same time, most GCC countries are providing incentives to private investors in tourism in the form of interest-free loans and cheap energy and labour.

"I think both private and public sector allocations would probably exceed $500 billion in the next 10 years. This depends on the result of the first two years of spending," Dr Abdul Aziz Abu Hamad Aluwaisheg, Minister Plenipotentiary, and Director of the Economic Integration Department Economic Affairs of the GCC, told Gulf News from Riyadh.

Pouring investments in the tourism sector comes at a time when GCC states are continuously increasing their efforts to diversify their oil and gas-based economies. Sky-rocketing oil prices are further pushing these efforts, according to officials and experts in the region.

"With oil revenues rising rapidly, GCC countries are in a better position nowadays to invest in diversification. Economic cities, tourism, financial centres are just some of the examples of diversification. Education and media outlets are other examples of diversified economies. All GCC countries have embarked on such projects, each according to its own pace," said Aluwaisheg, who has lectured at some of the big schools in the United States, including Columbia University in New York.

"In the long-term interests of the region's economy, it is very important for GCC countries to take strategic initiatives to diversify and be less dependent on oil revenues," said Dubai-based Mohammnad Dahmash, Partner & Middle East Leader of Real Estate Advisory Group partner at Ernst and Young. He also noted that oil is a depleting resource of energy and alternative energy sources are being sought globally.

Meanwhile, other experts in the field exclude the possibility of negative impact of competition as a result of duplication of services and tourist attractions offered by GCC countries.

"While most GCC countries are trying to further enhance tourism through festivals, the theme/attraction and demand drivers of the festivals are not entirely the same thereby eliminating the risk of duplication,"said Dahmash.

"For example, while Dubai promotes shopping/retail through the Dubai Shopping Festival and Dubai Summer Surprises, the Muscat festival has a cultural and entertainment theme associated with it. Meanwhile Doha is focusing actively on sports tourism," added Dahmash.

"Moreover, the target audience by age group is not the same either," Dahmash, based in Dubai, said in reference to the different age groups travelling for shopping, leisure and sport adventures.

"Leisure travellers will not be limited to sun and sand but will be able to find alternative entertainment projects like the Dubai and in UAE and entertainment district in Qatari Lusail," added Dahmash.

Beaches and giant malls are not the only types of tourism offered by GCC countries. Authorities have started working on several other forms, including education and medical tourism, though many believe both fields seemed to have a long way before getting well-established in the region.

"A significant number of GCC tourists will probably always prefer to travel abroad, but more could be done to attract some of them to travel within the GCC," said Aluwaisheg, describing recent decisions to open branches of Western cultural institutions in GCC cities as "steps in right direction".

In the past few years, Western universities, many with big names and long history, have opened branches in both UAE and Qatar. "Education is one important reason. Hundreds of thousands of GCC nationals travel abroad to study and train. Some of those students and trainees could be attracted inwards," added Aluwaisheg.

Others agree.

"One avenue that is currently unexplored and could hold tremendous potential is education tourism. As world-class universities are establishing themselves in cities such as Dubai and Doha, the Middle East has the potential to become the education hub for the MENA [Middle East and North Africa] and South-East Asia region," said Dahmash.

Pilgrimage

At the same time, Saudi Arabia benefits from the religious tourism. It is estimated that pilgrimage to Makkah generates 27 billion Saudi riyals every year for country.

Apart from cultural, leisure, educational tourism, experts believe other tourism avenues that can be explored in the region including "business tourism" where the area could be promoted and presented as a suitable place for meetings, incentives, conferences and exhibitions (MICE).

Already some cities in the region, mainly Dubai and Abu Dhabi, have started to gain the reputation of cities for conferences and exhibitions.

Meanwhile, experts believe authorities in GCC countries can promote national or domestic tourism as form of national integration and national identity. "I have seen little of this in the Arab world (outside school children being sent to national historical sites)," noted Waleed Hazbun, Assistant Professor at the Department of Political Science at Johns Hopkins University.

"Many tourists sites remain too commercial, shopping malls, amusements parks, while others, such as archeological ruins, have tended to mostly appeal western tourists," said Hazbun in an interview with Gulf News.

The GCC tourism is a "family-oriented" tourism, where a lot can be done in this regard if "things were made easy" for people to travel, experts noted.

"When a family from the Gulf region travels abroad, for France as an example, they visit Euro Disney. Very few would watch a play in a theatre," said Aluwaisheg. After all, "making travel easy" and lowering the cost to GCC nationals would greatly facilitate the movement of people among the member countries.

- This is the second and last part of a special coverage on regional tourism.

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