Tourism to continue to drive UAE’s economic growth
Retail spending from international visitors in the UAE has seen a significant revival
With inbound travel from around the world to the UAE thriving, tourism will continue to play a crucial role in powering UAE's economic growth, according to a senior Visa executive.
International visitor numbers to the UAE have surged by 70 per cent from Q2 2022 to Q2 2024, according to data from VisaNet, while tourism spending nearly doubled during the same period.
This growth significantly outpaces the overall trend in the GCC. The UAE comprised 54 per cent of the GCC’s international travelers in both Q2 2022 and Q2 2023, decreasing slightly to 53 per cent in Q2 2024. Together, the UAE and Saudi Arabia account for 75 per cent of traveller share and 85 per cent of spending share in the GCC. The region saw a 45 per cent year-on-year increase in international travelers from 2022 to 2023, followed by an additional 19 per cent growth in 2024, as reported by VisaNet.
The World Travel & Tourism Council estimates that travel and tourism will contribute $64.4 billion to the UAE's GDP in 2024.
“In the UAE, the tourism landscape is nothing short of extraordinary. We’ve seen an unprecedented surge in tourism. With growth and expansion that outpaces many other regions, tourism remains a top priority in the UAE,” said Dr Saeeda Jaffar, senior vice president and group country manager for Visa GCC.
According to a ForwardKeys report last year, international visitor numbers to the UAE in 2023 surged nearly 40 per cent compared to 2019. Additionally, Dubai's DXB airport has reclaimed its title as the world’s busiest international airport, surpassing pre-pandemic traffic levels.
Tourism from around the globe is flourishing in the UAE, with a significant share of growth attributed to visitors from other GCC nations. The UAE is the most visited country in the GCC, attracting travellers for shopping, leisure, education, healthcare, business, and investment opportunities.
Moreover, the UAE hosts over 100,000 cross-border residents — those who spend six months in the UAE and the rest abroad — who contribute over 20 per cent to the country’s inbound transaction volumes, primarily from Saudi Arabia, the USA, and India.
Higher spend
Retail spending from international visitors in the UAE also has seen a significant revival post pandemic, with an average increase by almost 40 per cent in 2023, reflecting the UAE’s enduring appeal as a top global tourism destination. This was marked by the return of affluent travelers and lengthier stays, contributing to an increased average retail spend per trip.
Spending on services like shopping, dining and accommodation has seen an even stronger resurgence, reflecting not only higher costs associated with these services but also the release of pent-up demand as consumers indulge more when abroad.
The number of international tourists to Dubai has surged, with 3.7 million arrivals recorded in the first two months of this year, up from 3.1 million in the same period in 2023. This upward trend, underpinned by initiatives such as the Dubai Economic Agenda D33, is a testament to the resilience and robustness of the UAE’s economy.
Outbound travel from the UAE reached an all-time high in 2023, with VisaNet data showing a 30 per cent increase compared to the previous year. The UK was the top destination, followed by France, Saudi Arabia, and Turkey, with Italy emerging as a new favorite. The largest spending categories for Visa cardholders were fashion-related transactions, dining at restaurants and cafes, and lodging. Cross-border residents notably accounted for 35 per cent of the UAE’s outbound travel volume.
The choice of destination was also influenced by currency exchange rates and the cost of luxury shopping. For instance, VisaNet data revealed that Japan became a favored destination when the yen weakened against the dirham, making luxury goods more affordable than in the UAE.
Looking ahead
“Looking ahead, forecasts indicate an addition of 17.3 million international tourist arrivals to the UAE from 2024 to 2029. This influx is expected to enhance the tourism sector’s contribution to GDP by 2.6 percentage points between 2023 and 2028. Major infrastructure projects, such as the Al Maktoum International Airport — which aims to accommodate 260 million passengers annually — demonstrate the UAE’s ambitious economic vision,” added Dr Jaffar.
As UAE travelers become increasingly digital-savvy, insights from Visa’s Global Travel Intentions Study reveal that over 70 per cent are comfortable using digital wallets while traveling, highlighting a significant shift towards digital payment methods despite rising costs.
“Infrastructure and technology investments are critical to enhance travel experiences, making them seamless, convenient, and enjoyable. The UAE, known for its tech-savvy, young population, has seen digital payments become a fundamental part of travel expectations and preferences,” said Dr Jaffar.