The UAE is expected to host 27.6 million international visitors this year, up 4.6 per cent from last year, on the back of travel-friendly policies and infrastructure improvements.
Inbound travellers are expected to spend $62.2 billion when they visit the country this year, up from $59.2 billion that overseas visitors spent last year, according to the World Travel and Tourism Council's latest report on Monday.
“This dominant growth of the country’s travel and tourism sector is a result of its diverse tourism offerings,” the WTTC said, pointing to the country's attractions.
“It also attracts visitors through various international business and leisure events such as the Abu Dhabi Grand Prix and Arabian Travel Market (ATM).”
The UAE has invested heavily in technology to speed up the flow of passengers at its airports, eased its visa policies and is expected to benefit from the unified Gulf tourist visa that allows travellers to visit countries in the six-nation bloc with a single visa.
About 925,000 people will be hired in the UAE's travel and tourism sector this year, up 2.9 per cent from last year, WTTC data shows. The UAE's travel and tourism sector is forecast to contribute 12.9 per cent of its gross domestic product this year, or Dh267.5 billion ($72.8 billion) of its total economy, it said.
Regional conflicts
In the wider region, conflicts in the Middle East are expected to “dampen demand” for travel this year, but the effect will probably remain limited to directly affected areas, the WTTC said.
Despite this, travel and tourism sector's GDP contribution is expected to grow 7.4 per cent this year compared to last year, the global body said.
This growth is driven in part by a robust 10.9 per cent growth for Saudi Arabia’s sector. Saudi Arabia’s travel and tourism industry is set to record the strongest growth in the region in the next decade, reaching $203 billion by 2035.
This would mean an annual growth of 5.5 per cent between this year and 2035, twice the projected growth rate for the broader Saudi economy.
Over the same period, the number of jobs supported by the sector is expected to increase by 900,000, bringing the total sector-supported jobs to 3.6 million by 2035.
US hit by spending decline
The US remains the world's biggest travel and tourism market but international visitor spending is projected to decline by 6.9 per cent in 2025, the only economy forecast to undergo such a decrease, the WTTC said.
"Without destination promotion, traveller-friendly policies and reduced visa costs, it could lose its competitive edge," the global body said.
The warning comes after President Donald Trump's border clamp down has resulted in reports of tourists experiencing difficulties as they try to enter the US.
Visitor numbers from Canada, the US’s largest source market, are forecast to fall 20.2 per cent, with visitor arrivals from Mexico projected to drop 5.1 per cent.
"This weak outlook is primarily driven by change in sentiments, which are being influenced by the recent trade policies," the WTTC said, referring to Mr Trump's spate of trade tariffs on key partners.
"Economically, tariffs could result in slower growth in source market economies which, in turn, could have some negative impact on their outbound travel to the US," it said.
International visitor spending is not expected to return to its 2019 level until 2031.
Global outlook
Globally, a complete recovery of spending by international visitors is expected this year. It is forecast to grow 8.6 per cent above the 2019 level, reaching nearly $2.1 trillion. Meanwhile, spending by domestic visitors is forecast to rise 13.6 per cent above the 2019 level, with a projected spending of $5.6 trillion.
In terms of annual growth, international and domestic visitor spending are forecast to grow 10 per cent and 5.1 per cent, respectively, in 2025.
Overall, the travel and tourism sector growth is forecast to slow to 6.7 per cent this year, gradually trending back to the average pre-pandemic growth rate.
"In 2025 and the following years, uncertainties surrounding trade tariffs and rising geopolitical tensions could limit the sector’s expansion," the WTTC said.
The sector is set to contribute $11.7 trillion globally – or 10.3 per cent share of the world economy. The number of jobs supported by the sector is expected to increase by 14.4 million, lifting its total contribution to employment to 371 million jobs. This represents 10.9 per cent share of all jobs in the global economy.
