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Five key stages for developing the tourism sector across the Middle East

By Karim Abdallah, Marwan Bejjani, Dima Sayess, and Melissa Rizk

Article

Despite the disruption of the COVID-19 pandemic, tourism remains a significant long-term opportunity for the GCC countries and Egypt. If these countries put into action a systematic plan for sustainable progress, they can develop their tourism sector rapidly and establish themselves as a major force in the global tourism market.

The GCC and Egypt understand tourism’s important role in economic diversification, growth, and job creation. After all, the sector contributed more than 10% of global GDP in 2019. In the Middle East, however, ambition has often exceeded performance. With the notable exceptions of Bahrain and the UAE, the number of travelers per head in 2019 hovered only between 0.1 and 0.7. This is compared, for example, with 1.8 and 3.3 in Spain and Singapore respectively.

A systematic approach to developing the sector over the long term involves a tourism journey traveling through five stages.

The first stage is for governments to define their national tourism visions and plans. Plans should incorporate key targets, such as the desired image as a tourist destination, the number of travelers sought, and the intended tourism contribution to GDP and job creation. For example, Saudi Arabia is looking for 100 million domestic and international tourists by 2030, and for the sector to increase its contribution from 3% of GDP to 10%.

The second stage is to institute effective governance. This can align the efforts of all relevant public and private stakeholders, ensure their collective and consistent commitment to achieving the established vision, and make plans easier to implement. Stakeholders include government bodies, travel players such as airlines, hotels and event venues, tourist attractions such as mega-parks and museums, and tourist services such as travel agents and tour operators. To handle such complex governance, the ministry of tourism normally chairs a council that encompasses all these interests and co-ordinates actions towards a common goal.

The third stage is for governments to pinpoint which categories of tourists they want to target, defined by their source markets and socio-demographic profiles. Selected categories should be those travelers most likely to be attracted by what the country has to offer, those that can make the most significant economic contribution, and those able to travel to the region relatively easily, Of course, one obvious natural fit segment is domestic tourists, although the region has yet to make the most of this opportunity. The number of domestic tourists per head in 2018 was only 1.4 in Saudi Arabia, 0.22 in Oman and 0.1 in Egypt, compared to 3.4 in China, Spain and the United States.

The fourth stage is to prepare the destination itself. This means boosting the appeal of tourism products and experiences, and guaranteeing that the destination is ready to welcome tourists. Tourism products should tally with emerging trends and the preferences of target tourist segments. They could be products based around intrinsic attributes such as culture, heritage or the climate. Other offerings can be developed. For example, urban tourism benefits from enhancing the appeal of shopping or conferencing facilities, or entertainment venues.

All countries need to assess how ready they are to welcome their target tourists and provide them with the experiences they seek. There are many aspects to this readiness, such as the quality of accommodation and restaurants, the availability of top-notch tour services and activities, highly qualified staff, an efficient transport infrastructure, and the standards of security, healthcare, and the environment.

The fifth stage is to connect the tourists to the country. The bottom line is that the vision must translate into bookings and repeat visitors. To do so requires strong marketing campaigns, platforms that manage to convert initial interest into bookings, and plentiful convenient transport connections to the destination.

The GCC and Egypt should be looking to create partnerships and invest in their distribution channels, such as travel agencies and tour operators, while performing focused marketing and promotion in their main target markets. The low prices resulting from the travel recession in the wake of the pandemic provide an opportunity for suitable acquisitions. Although the pandemic is likely to accelerate the growth of online channels, it should not be forgotten that traditional travel agencies remain the preferred option for older and more affluent visitors.

As governments follow this systematic approach, they always need to be mindful of the importance of introducing digital components at every stage to make the journey resilient for the future.

Once these five stages are put into action, each country should constantly renew and review them to strengthen its performance in domestic and international tourism. By doing so, they will be ideally placed to take advantage of the market’s post-pandemic recovery, and build thriving global tourism destinations in the Middle East.

About the authors

Karim Abdallah and Marwan Bejjani are partners with Strategy& Middle East, part of the PwC network, Dima Sayess is a partner and the director of the Ideation Center, the leading think tank for Strategy& Middle East and Melissa Rizk is a senior fellow with the Ideation Center.

Contact us

Karim Abdallah

Karim Abdallah

Partner, Strategy& Middle East

Marwan Bejjani

Marwan Bejjani

Partner, Strategy& Middle East

Dima Sayess

Dima Sayess

Partner, Strategy& Middle East

Melissa Rizk

Melissa Rizk

Senior Fellow, Ideation Center, Strategy& Middle East

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