UAE among top tourism beneficiaries in EEMEA

UAE among top tourism beneficiaries in EEMEA

Greece, Egypt, UAE, and Turkey are some of the largest beneficiaries of tourism flows in Easter Europe, Middle East and Africa (EEMEA), based on tourism figures as a percentage of total exports and GDP, a report said.

Tourism is expected recover in a solid way in the second half of 2021 (2H21), given the low base of 2020, but also improved vaccination and very high saving rates, said BofA’s EEMEA Equity Strategy Viewpoint. Furthermore, there are additional domestic tailwinds to support tourist arrivals.

For example, Egypt could benefit from greater arrivals of Russian tourists if direct flights between Russia and Egyptian red sea resorts are restored. Direct flights between Moscow and Cairo were already restored in 2018. Prior to the suspension of all flights in 2015, Russians accounted for 32% of all arrivals (5 million visitors in 2015). The World Expo could add to the tourism recovery in the UAE. Originally, pre-Covid, authorities expected it to attract 15 million visitors (50% international arrivals), although this appears ambitious.

Greece is likely to see c.50% of 2019 travel receipts this year, supported by bilateral deals on arrivals of vaccinated tourists (already signed with Israel, in progress with the UK and Serbia). Turkey has already embarked on marketing activities to attract tourists. In addition, Montenegro, Croatia, and Cyprus are the largest European beneficiaries of tourism with a direct contribution to GDP in the range of 13-23% in 2019.

UAE: quick vaccination progress and the Expo

The UAE's exposure to tourism and global trade, as well as its proactive vaccination programme, suggests it could benefit from a global recovery if the Covid pandemic dissipates. The UAE-Israel normalization accords open further avenues for tourism growth.

Since the first commercial flight between the UAE and Israel launched in November, close to 70,000 Israelis visited the UAE over two months, according to the authorities. Given the UAE and Israel have some of the world's fastest Covid-19 vaccination campaigns, the authorities have suggested a bilateral quarantine-free travel corridor could be set up soon.

After reopening its borders to international visitors in July 2020, Dubai received 1.1 million overnight visitors in July-November 2020 and 2.2 million passengers in December 2020. In comparison, Dubai received 16.73 million in 2019, suggesting material upside if the pandemic dissipates. An increase in Covid infections led the authorities to impose precautionary measures in February, and extend them until Ramadan in mid-April. The restrictions reduce the capacity at which hospitality and entertainment venues can operate (50-70%), while pubs and bars are closed.

The rescheduled World Expo 2020 could provide upside to growth. The event will now take place from October 2021 to March 2022. The timing could coincide with a global loosening in travel restrictions, and corresponds to the peak tourism months for Dubai. This could provide a material tourism boost.

The original pre-Covid projections by the authorities targeted 25 million visitors over the six-month Expo period, with over 70% originating from outside the UAE. The total number would include 7.5 million resident visitors, 2.2 million GCC visitors, and 5 million transit visitors. Thus, the government target was a 50% increase in the number of annual visitors, but this is likely ambitious, especially if the pandemic does not dissipate. – TradeArabia News Service

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