Now widely recognized as an important emerging sector with significant potential for growth, the Gulf states are devoting increasing levels of attention to tourism in an ongoing effort to diversify their economies.
Bahrain was an early innovator in this space and gained global recognition for achievements such as hosting the first Formula 1 Grand Prix in the Middle East. Doubtless, the best-known regional tourism success story to date is Dubai, which has used the combination of Emirates Airlines, local hospitality investments, and internationally-renowned events to put itself on the global tourism map. Similarly, Oman has been gaining recognition and popularity for its efforts to capitalise on its unique geography, coastline, and cultural heritage.
As impressive as the achievements of the past couple of decades have been, it is immediately obvious that much more can be done with regards to tourism, and at least three key factors underscore the exceptional potential of the GCC as a global tourism hub. Location is perhaps the most significant strategic opportunity available to the region.
The fact that the Arabian Peninsula sits at the crossroads of Asia, Europe, and Africa is special in a global sense, and is set to become an increasingly significant factor because of the dynamic demographics and economics of Asia and Africa. The two continents are continuing to see some of the fastest population and economic growth rates in the world, translating into rising disposable – and discretionary – incomes, and a rapidly growing “middle class” hungry for new experiences. This demographic will become the largest of its kind globally, estimated to exceed 1 billion people for just China and India combined by the early 2020s. For many of these people, the GCC offers a combination of proximity, relative familiarity, and value for money.
The second major advantage to the GCC is its world-class connective infrastructure, developed after years of investment underpinned by a strategic vision. The region is now an international aviation hub and is welcoming an increasing numbers of passenger traffic by sea as well, thanks to its inclusion in the itineraries of global cruise lines. While alternative options exist and tend to be cost-competitive, tourism has been a strategic priority for several Gulf economies for some time, so the GCC now also boasts a competitive selection of accommodation, transportation, and leisure options. Put simply, the GCC is accessible and “tourist-ready.” Levels of readiness vary in practice, of course, but significant developments and improvements are underway across the region.
The third advantage to the Gulf is its exceptional tourism assets, which make for a set of unique experiences. The region boasts a long and diverse history, with a rich archeological and architectural legacy as a consequence. A growing number of these assets are now gaining international acknowledgement through institutions such as the UNESCO, which so far has recognised twelve World Heritage sites within the GCC. The Gulf also possesses exceptional natural assets: one of the world’s largest deserts, oases, mountain ranges, a diverse range of coastal areas, diving spots, and island archipelagos, often with special geological and ecological features. Additionally, there is a growing array of modern man-made attractions, such as the world’s tallest building and largest shopping mall, as well as some of the world’s largest theme parks, and a variety of international business, leisure and sporting events, such as the Formula One Grand Prix, hosted in both Bahrain and Abu Dhabi.
It is this third area which today presents arguably the greatest potential for regional development in tourism. While the region has much to offer, its tourism identity is unevenly developed. Thanks to the Two Holy Mosques, Saudi Arabia has a long history of religious tourism, but was known for relatively little else, at least until the recent rise in conference and exhibition activity. Dubai has gained renown as a modern, international hub with a diverse range of attractions, but has largely shaped its identity independent of its neighbours. Bahrain and Abu Dhabi have successfully placed themselves on the motor racing map, and Oman is seeing growing popularity as a destination for resort tourism. However, the external perceptions of the tourism destinations in the region are often narrow and shallow. Moreover, the tourism identity of the region as a whole is largely non-existent. Yet the regional geographies offer a variety of unique characteristics, and connectivity is not typically a problem. One strategic opportunity, therefore, is to induce the growing visitor flows to explore the region in greater depth and with more time. To this end, much more product development will be required.
Encouragingly, the magnitude of the tourism opportunity is now receiving growing attention across the region. The recent decision by Saudi Arabia to begin issuing tourist visas is a major milestone and effectively means that the entire region is now open to constant visitor flows. In recent years, all GCC countries have developed significant institutional frameworks with national tourism promotion agencies and other entities. Tourism identities are being defined, articulated, and further developed on multiple levels.
Going forward, important steps are likely to materialise in regulation, communication, and capital mobilisation to take the GCC tourism narrative to the next level. In the regulatory field, the primary emphasis is likely to be on enabling the development of new areas of activity. The evolving Saudi visa policy is a case in point. Bahrain’s Ministry of Industry, Commerce, and Tourism is looking at ways to further develop maritime activities to capitalise on the island’s geography. Ongoing efforts by several countries to encourage long-term residency are important in terms of developing networks around the world and encouraging more family tourism.
While GCC countries have made tremendous progress in boosting international awareness of the region and its tourism potential, progress remains uneven. Much more can be done to attract greater attention to the diversity of tourism-related offerings across the peninsula. In many cases, external attention tends to focus fairly narrowly on certain geographies and events, ignoring the fact that the region has far more to offer than first meets the eye. Regional and local tourism have a very important role to play in this regard as well. Much more can be achieved by enabling local residents to better understand what is available close by.
Further steps to develop the tourism identity will naturally continue to be linked to more effective capital mobilisation. An important reason for skewed perceptions is the fact that the region is not equally accessible to tourists. New investments are required in order to develop new destinations and experiences. This can range from resort tourism to developing more activities around heritage and natural sites or creating products around adventure tourism. Success in this regard is likely to hinge more and more critically around private capital, often beginning with investments in basic connective infrastructure. There are also significant opportunities for entrepreneurship in destination management, tour provisions infrastructure management, and various other related activities. While much remains to be done, it is clear that within a short period of time, the GCC has emerged as a globally significant tourism destination with exceptional potential for growth.
About the author
Jarmo Kotilaine is chief economist at the Bahrain Economic Development Board