Middle East: New Global Travel Hub

A new Amadeus report finds the Middle East poised to become the world’s dominant global travel hub with $4 trillion U.S. announced in travel and tourism projects, $86 billion earmarked for airport development and $7 billion invested in hotel projects. The Amadeus report projects that the number of tourists to the Middle East will double to 136 million by 2020.

The report, Securing the Prize for the Middle East, explains what the region should focus on to fulfill its potential as a dominant global hub. The survey also warns against complacency and exposes the risks posed by a lack of coordinated pan-regional policies in regulation, investment and business operation.

The factors enabling the Middle East to underpin the next wave of globalization created by emerging economies such as China, India, Latin America and Africa include the region’s geographic position at the center of the major air routes; its continued economic growth compared with the G8 countries; and the major investments planned in the travel industry, including $86 billion for airports. The region’s approach to innovation and technology adoption is also highlighted.

Investment in the travel, hospitality and aviation sectors will enable the Middle East to diversify its economy with plans to expand international, intra-region and domestic tourism. Religious tourism is likely to be a major new factor, with Saudi Arabia generating more than $7 billion in 2009 from visitors to Muslim pilgrimage sites and projecting visitor numbers to grow from over 12 million in 2009 to 15 million in 2013. The emergence of a new range of low-cost carriers will also support this trend.

The potential of innovation and new technology to underpin future growth is also discussed in the report. Strategic investment by the region’s airlines in new aircraft technology has already paid off and the critical role of IT infrastructure is also a factor.

The report also recommends the need for integration and transparency. This includes the creation of a common regulatory framework across the region covering visa regulations, immigration and air control. A call for greater financial transparency is made, particularly the need for the airline carriers to show their independence from government subsidy. The benefits for the major carriers to become members of global alliances, or to establish a Middle Eastern-based code sharing agreement are also addressed.

“The Middle East already connects more major global destinations via a single flight than any other hub. This has been the result of aspiration, dedication and innovation from business and political leaders. This approach to strategic planning, ambitious investment and early technology adoption continues and the region is now poised to take an even greater competitive leap forward, enabling it to lead the next wave of globalization. The aim of becoming the world’s dominant travel hub by 2025 is within reach, but obstacles remain, the chief one being complacency,” said Antoine Medawar, vice president, Middle East and North Africa, Amadeus.

“From a global perspective, the stagnation of existing global hub developments necessitates the development of new ones, and the Middle East would be the best choice to create them. However, while the region benefits from assets such as strategic geographical location and strong GDP growth, it will still need to work hard to attract new business and leisure travelers to the region. This report sets out clear factors that need to be addressed if it is to take hold of the significant opportunities and reach its goal of becoming the dominant global travel hub,” commented Mona Farad, managing partner, Insights Management Consultancy.

Commissioned by Amadeus, the study was developed by Insights Management Consultancy, a leading business consultancy headquartered in Abu Dhabi, and h2c, a specialist consultancy in hospitality marketing and distribution solutions. Insights Management Consultancy is the Gulf & Middle East representative of h2c consulting services.

The report is supported by interviews with senior executives in the travel and tourism industry, including the Arab Air Carriers Organization (AACO), Marriott and the Abu Dhabi National Corporation of Tourism and Hotels. Visit www.amadeus.com/globaltravelhub.

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