Middle East peace could bolster Gulf tourism

London/Dubai: The Middle East is one of the fastest regions to recover from the present global economic crisis, a top international tourism official said, adding that peace could accelerate the growth.

"If peace returns in Iraq, Lebanon, Palestine and Iran, can you imagine how it will boost tourism in the region?" said Jean-Claude Baumgarten, president and chief executive of the World Travel and Tourism Council, at the World Travel Market.

"Hundreds of thousands of new people will start travelling across the region for business, pleasure and other purposes. Lack of peace in parts of the Middle East has hampered public mobility and restricted regional tourism to a certain extent."

International arrivals in the Middle East last year grew 18.2 per cent to 55.1 million, compared to 46.6 million in 2007, according to the United Nations World Tourism Organisation (UNWTO). Tourism arrivals fetched $45.7 billion (Dh168 billion) in foreign currency in the Middle East last year, up from $34.98 billion in 2007.

However, this year arrivals declined 7.6 per cent year to date.

"The Middle East is one of the fastest regions to recover from the present crisis and grow faster than other regions," he said.

Even now, he said, hotel occupancy in Dubai is over 90 per cent.

"Dubai has created a fantastic hub in the region with the best connectivity that supports its tourism and economy," he said.

"Abu Dhabi is creating a different type of destination by redeveloping some islands and deserts to transform them into tourism destinations.

"The governments have created some fantastic airlines — Emirates, Etihad and Qatar Airways — that are fast growing and driving the tourism industry's growth. So, I see a very positive sign in the region's overall tourism industry."

UNWTO said it expects this year the region to record a five per cent decline in arrivals.

UNWTO expects the global tourism arrivals to decline to 600 million this year, down from 643 million last year. Global tourism receipts data is trailing by about two per cent, compared to arrivals. "This means tourists are spending less or having shorter visits," Taleb Rifai, UNWTO's secretary-general, said.

"However, we see demand bottoming out and the tourism sector regaining confidence. We see growth coming next year between one to three per cent. However, the situation remains fragile.

"We are most concerned about the unemployment and its impact on society and economy."

Recovery will be gradual

This year has seen the worst recession since the 1930s, with global gross domestic product (GDP) contracting by an estimated 1.3 per cent. While there are tentative signs that the economic cycle is now turning, driven by unprecedented policy stimuli, reviving credit markets and recovering asset prices, recovery is expected to be gradual — and a second dip into recession early next year cannot yet be ruled out, World Travel and Tourism Council (WTTC) said.

"As a result, travel and tourism economy GDP is now forecast to decline by 5.5 per cent in 2009," Jean-Claude Baumgarten, the council's president and chief executive, said.

"This means that travel and tourism's contribution to global GDP will fall this year to less than 9.3 per cent from 9.6 per cent in 2008," Baumgarten noted, "and this is also down from the 9.4 per cent predicted at the start of 2009.

"Moreover," he added, "activity in 2010 is likely to be flat at best."

Nevertheless, the updated forecasts from WTTC and Oxford Economics show that there has been no change in the projected long-term growth trend of four per cent per annum forecast for travel and tourism over the coming decade, making it a key engine of expansion in the longer term.

"In the aftermath of the financial crisis that started last summer, the global economy contracted at its steepest rate in post-war history," said Adrian Cooper, managing director of Oxford Economics, WTTC's research partner.