Chinese, Russians shore up Middle East tourism

Chinese and Russian visitors boosted Middle Eastern tourism last year following a 2016 slump as Europeans gave the area a wide berth on security fears. (FITUR)
Updated 21 January 2018
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Chinese, Russians shore up Middle East tourism

MADRID: Chinese and Russian visitors boosted Middle Eastern tourism last year following a 2016 slump as Europeans gave the area a wide berth on security fears, according to the World Tourism Organization (WTO).
The Mideast region as a whole drew 58 million foreign tourists in 2017 — a 4.8 percent rise on the previous year — the Madrid-based WTO said in its latest figures released midweek.
Jihadist attacks on tourist sites in Egypt, Tunisia and Turkey in recent years particularly hit the industry.
But “over time, people forget and return,” said Jalel Gasmi, head of Granada Travel Services, a tour operator attending the Fitur international tourism gathering in the Spanish capital.
Despite the annual rise, Marcus Lee, heading the Welcome China agency, said the sector could not rest on its laurels.
For Chinese visitors, security “is the first thing they ask about” beyond visa regulations and often poor flight connections in the Middle East, said Lee.
Security concerns aside, Lee said rising purchasing power means the Chinese tourist takes a different approach compared to 20 years ago when, “for example ... coming to Europe they wanted to see ten countries in ten days.
“That’s no longer the case and we are concentrating on one country over ten days,” said Lee.
In the case of Egypt, tourist numbers soared 55 percent last year, even as European numbers dipped, with Chinese and visitors from Egypt’s neighbors taking their place.
Visitor profiles have changed since military man Abdel Fattah El-Sisi came to power in 2014 and especially since the 2011 overthrow of longtime Hosni Mubarak.
Before then, “the European market, including Russia, accounted for almost 80 percent (of tourists) but now, 52 percent,” said Hesham El Demeiry, head of the Egyptian tourist authority, adding Chinese and Indian visitors rose from 5 to 12 percent while tourists from Egypt’s neighbors doubled their share from 15 to 30 percent.
Turkey, meanwhile, is back in business after the fallout from the July 2016 coup saw visitor numbers slide by a third, before a similar rise last year.
Ankara is out to keep on attracting more visitors from Russia — whose tourists poured in during 2017 — as well as neighbors including Iran and Ukraine.
The downside, according to Turkish tour operator Ahmet Okay, is that the newcomers are likely to spend fewer tourist dollars than their EU or US counterparts.
Tunisia is also on the way back thanks to a surge in Russian and Chinese visitors with a 23 percent rise in visitors last year over 2016.


Is the Dubai economy turning the corner?

Updated 46 min 10 sec ago
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Is the Dubai economy turning the corner?

  • Expo 2020 expected to boost GDP
  • Relaxation of residency rules helps real estate

LONDON: Is the Dubai economy finally turning the corner? At least one major international bank thinks so.

It follows a move by the emirate's leadership to reboot an economy that has been hit hard by corporate job losses, the introduction of VAT and a slowing real estate sector.

The UAE’s non-oil economy is likely to “turn a corner” next year with Dubai’s Expo 2020 infrastructure projects, changes to visa rules and increased government spending set to boost growth, according to a Bank of America Merrill Lynch (BofAML) research note.

Abu Dhabi National Oil Company’s (ADNOC) downstream expansion plans are also expected to drive the country’s non-oil GDP growth, said the note compiled by Middle East and North Africa (MENA) economist Jean Michel Saliba.

The Gulf country’s real GDP growth is estimated to rise to 3.5 percent in 2019 from a forecast 2.8 percent increase this year and a 1.9 percent increase in 2017, said the note published on Thursday.

Buoyed by a recovery in oil prices, Abu Dhabi approved a 50 billion dirham ($13.6 billion) three-year stimulus package in early June, which BofAML estimated could add 0.4 percentage points to non-oil GDP growth.

ADNOC’s $45 billion five-year downstream investment plan — revealed in May — is estimated to add a further 1.1 percentage point to the emirate’s non-oil growth, the report said.

The Expo 2020 event in Dubai could drive up GDP growth by 2 percentage points between 2020 and 2021, the report said, by boosting job creation, consumption and tourist numbers.

Given the improvement in oil prices, the cost of Abu Dhabi’s stimulus spending is considered “financeable” by BofAML, while Dubai’s spending plans are said to be “modest.”

Recent structural reforms, including plans to introduce long-term expatriate visas for up to 10 years, could help to boost the UAE’s population and consumer demand, the note said.

“The new UAE long-term and temporary visa system should facilitate retention of white-collar expatriates,” it said.

“As we expect longer-term visas not to be linked to continued employment, this may increase expatriate incentives to acquire property and support real estate demand.”

The UAE announced in May that it would allow 100 percent foreign ownership of UAE companies in specific industries by the end of the year, a move that could give a welcome boost to foreign direct investment in the country.

A new UAE-wide insurance scheme may provide a one-time boost to corporate profits, the note said.

The UAE cabinet approved plans in June for the insurance scheme to replace the previous system whereby employers had to provide a monetary guarantee to cover each of their workforce.

The move is likely to free up capital that companies could choose to sit on or to reinvest, BofAML said.

“Should corporates invest, we estimate this could lead to a one-off 0.1percentage point boost to UAE non-hydrocarbon real GDP growth,” the report said.