View from the Middle East and Africa: tourism importance to grow and grow
As Middle Eastern and African countries look to diversify their economies, tourism is coming to the fore. But which locations are making the most of the opportunities present?
Tourism is one of the most important sources of foreign currency for many countries in the Middle East and Africa (MEA) region. Thus, it is not surprising that despite a quite challenging 2016 for the hospitality sector, some 316 new hotels have been announced to open in 2017 in the region. The United Arab Emirates is leading the list with 59 hotels while preparing for its Expo 2020 event, which is expected to attract 25 million visitors.
Gulf Co-operation Council (GCC) countries account for more than 42% of the hotel projects announced in the MEA region in 2017. Apart from the yearly pilgrimage of Muslims to the holy cities of Mecca and Medina in Saudi Arabia and the upcoming World Cup 2022, oil-dependent Gulf countries have defined tourism as a key pillar in diversifying their economies.
Whether the foreign investors’ profit targets – such as the world’s largest hotel company Marriott International, which will be opening its 50th hotel in UAE in 2017 – are fulfilled will remain to be seen. Regional conflicts, a strong US dollar (to which the currencies of the GCC are pegged) and low oil prices troubling the local economies are just a few aspects that will continue to have a direct impact on the tourism industry in the years to come.
An attractive FDI destination for the hotel and tourism industry in the region is Iran. Home to 19 Unesco World Heritage sites, Iran has much to offer in terms of tourist attractions. Under the presidency of Hassan Rouhani, Iran signed a nuclear treaty with Western powers, which has re-opened Iran’s doors to the global business and tourism community, although the deals appear to be under fresh scrutiny from new US president Donald Trump. Iran attracted 4.8 million visitors in 2013 and 5.2 million in 2015, filling almost all 104 listed five-star and four-star hotels in the country. To achieve its ambitious plan of 20 million tourists by 2025, Iran will need more than 170 additional hotels, but it will also need a stable political system and friendly relationship with neighbouring countries, as well as with Mr Trump.
Mazdak Rafaty is managing partner of Ludwar International Consultancy and SME adviser to the joint Emirati-German Chamber of Commerce. Email: email@example.com
The fDi Report 2016
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