Sports tourism compensates for oil economy shrinkage in GCC nations
Know how sports tourism is a driving economic force in the GCC
The Gulf Cooperation Council (GCC) countries have recognised the potential of sports tourism as a pivotal economic driver.
The region aims to diversify its economy away from oil dependency and attract foreign visitors, and a way they have done that is by hosting major international sporting events.
But how effective has this strategy been, and what implications does it have for the future of tourism in the Gulf?
Sports tourism involves traveling to experience or participate in sporting events, and it has gained significant traction in the GCC, particularly in countries like Qatar, the United Arab Emirates (UAE), and Saudi Arabia.
These countries are investing heavily in sports infrastructure, branding themselves as premier destinations for international sporting events.
The success of this initiative is evidenced by high-profile events such as the FIFA World Cup in Qatar, the UFC events in Abu Dhabi, and the Formula 1 Grand Prix in Bahrain and Saudi Arabia.
“Having had the privilege of serving as the UK minister of sport, tourism and heritage, I have witnessed first-hand how investment in sports can transform a nation’s global standing, and I look admiringly at how the Middle East is exemplifying this with remarkable ambition.
“From the monumental 2022 FIFA World Cup in Qatar, a turning point that spotlighted the Gulf’s capacity to host large-scale sporting events, through to the Grand Prixes embedded into the F1 calendar, and the suite of world class tournaments, international perceptions of the region are being challenged and changed, highlighting new visitor opportunities,” said Dame Tracey Crouch, Hanover Sport managing director.
What are the economic benefits of sports tourism?
The impact of sports tourism on the GCC economy is multifaceted. Firstly, hosting major sporting events attracts large numbers of international visitors, generating revenue through hotel bookings, dining, transportation, and shopping.
For instance, the FIFA World Cup 2022 in Qatar saw an influx of over a million visitors, significantly boosting local businesses and employment.
In the UAE, particularly in Dubai, the annual Formula 1 Grand Prix attracts thousands of tourists who come to enjoy the race and the accompanying festivities. This not only enhances the city’s global image but also contributes to its goal of becoming a leading tourism hub.
“From an economic perspective, hosting global events allows the GCC countries to position themselves as attractive destinations for international business and leisure alike, and the expectation is that with exceptional thinking about delivery, many more ‘mega events’ will materialise.
“The inter-connectivity between sport and tourism in the GCC, will, without doubt, contribute significantly to the growth of the region’s non-oil sectors, supporting long-term economic diversification away from hydrocarbons,” added Crouch.
Sports tourism contributes to infrastructure development. To prepare for these events, GCC countries invest in stadiums, transportation networks, and hospitality facilities, which have long-term benefits for both residents and tourists.
For example, Qatar's extensive investment in its metro system ahead of the World Cup is expected to serve the country well beyond the tournament.
Andrew Baturin, CMO at UAE- based business travel platform Tumodo talked about how this effects economic growth saying,
Sports tourism has become an important driver of economic growth and international visibility for GCC countries.
Many countries aim to double their number of tourists by 2030 as part of their national visions. These events not only attract visitors but also bring in business travellers in advance for event preparation, stimulating long-term economic activity
Does sports tourism attract foreign investment?
The GCC’s focus on sports tourism has also attracted foreign investment. Companies from around the world are eager to capitalise on the growing sports scene, leading to partnerships that enhance local expertise and expand offerings.
The UAE, with its robust sports ecosystem, has become a hub for sporting events, including the UFC Fight Night and international cricket tournaments. These events not only bring in revenue but also showcase the region’s capabilities to host world-class events.
FIFA, UFC, and F1
The FIFA World Cup in Qatar was a landmark event, marking the first time the tournament was held in the Middle East. The event placed Qatar on the global sports map, bringing with it a wave of interest in the region. The World Cup generated approximately $6 billion (Dh22 billion) for the Qatari economy, showcasing the potential of sports tourism.
Similarly, the UFC events in Abu Dhabi have positioned the emirate as a central player in the combat sports arena.
The UFC has committed to hosting more events in the UAE, contributing significantly to the local economy through tourism, sponsorship, and merchandise sales. The events draw international audiences and bolster Abu Dhabi's reputation as a sports capital.
The Formula 1 Grand Prix has been another game-changer for Bahrain and Saudi Arabia.
“The Kingdom [Saudi Arabia] has already played host to some of the biggest and most renowned sporting events globally including F1 Saudi Arabian Grand Prix, FIFA Club World Cup, UFC Championship, and more. These sporting events have resulted in a major influx of domestic and international fans as well as tourists to the venue, enhancing further the robust local ecosystem,” said Muzzammil Ahussain, CEO of Saudi Arabian travel company Almosafer.
The races not only attract F1 enthusiasts but also promote the broader tourism appeal of the countries. The Saudi Arabian Grand Prix, launched in 2021, is part of the country’s Vision 2030 strategy to diversify its economy away from oil and enhance its global presence.
“The GCC region is fast emerging as a major global sporting hub buoyed by state-of-the-art infrastructure, greater accessibility and investment-friendly government policies contributing to its transformation into an attractive sports destination.
“Sporting events are central to Saudi Arabia’s ambitious tourism goals on the back of Vision 2030 with its focus on economic diversification, attracting both domestic and international tourists in huge numbers.
“Revenue from sports events within Saudi Arabia is expected to have a projected market volume of US$272.6 million (Dh1 billion) by 2028 as per Statista [an international statistics tracker]” added Ahussain.
Challenges
While the prospects for sports tourism in the GCC are promising, challenges remain. The region's warm climate can deter visitors during some months, especially during the summer months. However, strategic scheduling of events during cooler months and the development of indoor venues are mitigating this issue.
While major events draw attention, the GCC countries must ensure they offer a holistic tourism experience. Cultural experiences, heritage sites, and recreational activities are essential to keep visitors engaged beyond the event itself. Countries are starting to recognise this need; for instance, Qatar's National Museum and the UAE's Louvre Abu Dhabi have become integral parts of their tourism offerings.
“Beyond the obvious economic impact, sports events also drive tourism by showcasing a country’s cultural and natural assets. While many might paint the GCC with one broad stroke, each country is unique in its own regard and thus has excelled in its own way.
“Using events to slowly but surely transform destinations into becoming synonymous with sport while remaining an international tourism target with much more on offer.
“Tourists who come for a high-profile sporting event often stay to explore the cultural and leisure experiences on offer, and vice versa. The challenge is how to promote the whole package harder and faster if the GCC are to meet their ambitious plans,” added Crouch.
The effectiveness of sports tourism as a strategy for the GCC is apparent in several key areas:
1. Increased tourist arrivals: There has been a notable rise in the number of international tourists visiting the GCC for sports events, with many returning for additional experiences, according to an analysis by consultancy firm Roland Berger.
2. Economic diversification: The influx of tourism revenue helps to reduce reliance on oil, contributing to the broader economic diversification goals of these nations.
3. Brand recognition: Hosting major events enhances the global profile of the GCC countries, promoting them as viable destinations for international tourism beyond sports.
4. Local engagement: The success of these events has fostered a growing local sports culture, with increased participation in various sports among residents and a sense of national pride.
“In 2020 Abu Dhabi, named the world’s leading sports tourism destination for eight consecutive years by the World Travel Awards, hosted the Abu Dhabi Grand Prix since 2009 and the UFC's Fight Island.
“By focusing on sports tourism and such major events like World Cup, etc, GCC countries are successfully diversifying their economies and attracting high-spending international visitors and business professionals,” added Baturin.
As the GCC continues to invest in sports tourism, the region is likely to see an evolution of its tourism landscape. Future plans include the establishment of more sports complexes, academies, and training facilities aimed at nurturing local talent and promoting long-term engagement in sports.
As global sporting organisations look to expand their reach, the GCC is well-positioned to become a go-to destination for future international events, such as the Asian Games and various World Championships in different sports.
Sports tourism has emerged as a vital component of the GCC’s economic strategy. By effectively leveraging major sporting events, the region is attracting international visitors, boosting local economies, and fostering a vibrant sports culture. As the GCC countries continue to innovate and enhance their tourism offerings, the future of sports tourism in the region looks promising, potentially reshaping its economic landscape for years to come.