Technology including virtual reality and more Arabic content is expected to shape the travel industry as a young population matures and the flow of expats back to the Arabian Gulf gathers momentum, a report revealed yesterday.
According to a report from the travel technology provider Amadeus, nearly 25 per cent of the Gulf population is currently less than 15 years of age.
As today’s young people become tomorrow’s decision-makers, this virtually connected population will put pressure on the travel industry to adapt to mobile-enabled technology and more Arabic content.
Virtual travel could also shift the way the travel industry functions, according to Ivan Jakovljevic, the industry head of travel for the Middle East at Google.
Google’s Art Project already enables participants to walk through the galleries at 17 museums, including London’s Tate Gallery.
In March, Facebook bought the virtual reality technology provider Oculus Rift for US$2 billion. Among its products is a headset that creates a computer-generated environment.
“The incredible thing about the technology is that you feel like you’re actually present in another place with other people,” said Mark Zuckerberg, Facebook’s chief executive, during the acquisition.
As the performances of the region’s economies improve, expats from Europe and the Middle East are also starting to return in greater numbers.
In the region, Qatar has the lead in net migration as more construction workers arrive to feed some $200bn of infrastructure projects. For every 1,000 people, 49 came to live in Qatar last year. In the UAE, the figure is 11 and in Bahrain the figure is a negative 40, with outbound movement in the population because of the political situation there.
“The double-digit growth of expats in the Gulf combined with natural population growth [means] a rising middle class in the region [that] will shape the traveller profile,” said Mona Faraj, a managing partner at the research company Insights.
Intra-regional travel will generate around $160 billion in 2030 up from $40 billion last year for the UAE, the highest in Gulf. The overall figures for Gulf will be around $300 billion in 2030 up from $100 billion in 2013, the report says.
Almost 70 per cent of the UAE’s population is expatriate, while expats comprise 68.8 per cent of the population in Kuwait and 86.5 per cent in Qatar.
While Gulf economies, with collective wealth of $65 trillion, reap the benefits of their vast oil and gas reserves amid high oil prices, they also need to diversify their economies.
“This [wealth] will be depleted in 40 to 50 years,” said Omar Al Hudaif, the chief executive of Al Fursan Travel of Saudi Arabia. “In the world, the top 10 countries who spent the most last year all have diversified economies. Leisure travel is dependent on disposable income.”
Last year, the highest-spending tourists coming to the Gulf included those from China, Germany, the US, the UK, France, Canada, Japan, Australia and Italy.
Among regional business travelers, Bahrain, Saudi and the UAE population spent the most during intra-regional and international trips. UAE-based travellers spent $5,000 and $10,400 respectively, while those from Bahrain spent $6,900 and $12,205 respectively.
Business travel to European countries, excluding the UK, is expected to drive growth in the outbound sector. Last year it was geared more towards travel to the Asia-Pacific region, which excludes Australia and New Zealand, and South Asia.
In February, the European Union agreed to grant visa-free travel for Emiratis to its 26 Schengen countries. The United Kingdom has also eased visa requirements. In March, the UAE waived visa requirements for citizens from East European countries, bringing all 28 EU member states under visa-free travel to the UAE. The Emirates allows citizens of 32 countries the visa on arrival facility.
Dubai, which leads in attracting meetings, incentives, conferences and exhibitions (Mice) travel in the Middle East, is expected to attract between 3 million and 4 million business travellers by 2020. Of these, Mice travellers will comprise 1.7 million and 1.9 million from the current levels of 900,000, according to the report.
The industry is also expecting a 4 per cent rise in intra-regional travel with the relaxation of travel formalities. In the study, 33 per cent of the respondents said visa issues were the main reason for their inability to travel more often.
With the expected easing, the UAE stands the best chance to benefit, according to the Amadeus report undertaken with Frost and Sullivan and Insights. It currently attracts 52.9 per cent of total regional travel.
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