Fitch projects $340 billion boost in GCC tourism by 2030

The tourism sector in the Gulf Cooperation Council (GCC) region is set to see a remarkable 161.5% increase in its contribution to GDP, surpassing $340 billion by 2030, according to credit rating agency Fitch. This surge will account for 10% of the region’s economic output.

In a recent report, Fitch highlighted that the tourism sector contributed approximately $130 billion to the economies of GCC countries in 2023.

Last February, Saudi Tourism Minister Ahmed Al-Khatib noted that the travel and tourism sector's contribution to the GDP of GCC countries reached 7.8% in 2022, "falling short of the ambitions and aspirations of GCC leaders," according to the Saudi Press Agency (SPA).

In this context, the Supreme Council of the GCC approved a unified tourist visa at the Doha Summit late last year. Once implemented, this visa will allow holders to visit six countries with a single tourist visa. The aim is to attract more tourists and keep them in GCC countries for longer periods, thereby enhancing Gulf economic integration, as stated by UAE Economy Minister Abdullah bin Touq.

Gulf countries have "advanced and qualified infrastructure" for the travel and tourism sector. By the end of 2022, there were 10,649 hotel establishments, marking a growth of 1.2% compared to 2016, Bin Touq said in an interview with the Emirates News Agency last October.

The joint Gulf tourism strategy for 2023-2030 aims to increase the number of incoming trips to GCC countries by 7% annually. This would mean reaching 128.7 million visitors by 2030, compared to 39.8 million in 2022, according to Bin Touq.

Additionally, GCC countries aim to boost tourist spending to $188 billion by 2030, compared to an estimated $96.9 billion at the end of last year.

Aviation sector's contribution

The aviation industry is set to play a crucial role in enhancing tourism in the Gulf region. The region is home to some of the world's most advanced airports, including Dubai International Airport (which handled 87 million passengers in 2023), Hamad International Airport (45.9 million passengers), and King Abdulaziz International Airport (42.9 million passengers), according to Fitch.

Additionally, the GCC countries aim to double air traffic by 2030, Fitch reports.

Investing in infrastructure

In 2023, Saudi Arabia announced plans for 200 projects across 17 sectors, including four airports. This attracted significant interest from both local and international investors for the development of the new Abha International Airport, according to Fitch.

Last October, Saudi Crown Prince Mohammed bin Salman revealed the master plan for the new Abha International Airport, which will have a capacity of 13 million passengers annually, with the first phase slated for completion by 2028. The current capacity of the airport is 1.5 million passengers, according to SPA.

Hamad International Airport in Qatar was ranked first in a report on the world's best airports by AirHelp. In April, Dubai announced a $35 billion plan to transform Al Maktoum International Airport to accommodate 260 million passengers annually.

Fitch noted that Gulf countries are diversifying the funding sources for these projects through bonds and sukuk markets, allowing access to a larger pool of investors and long-term financing options.