The FIFA World Cup in Qatar later this year will likely benefit the travel hubs in the UAE and neighbouring countries as well as provide a boost to Qatar’s own economy, Emirates NBD has said in a report.
“Overall, the outlook for the GCC region remains constructive. Expected fiscal surpluses will allow governments to spend as planned without needing to tap debt markets in a rising interest rate environment,” noted Khatija Haque, Emirates NBD head (Research) and chief economist.
Recent reforms to the personal and business laws in the UAE will likely continue to drive inward investment and attract talent.
Emirates NBD noted GCC economies have seen a relatively strong start to 2022. The hydrocarbons sectors have benefited from increased oil production so far this year, with crude oil production up 12% on Q1, 2021 for the UAE and 19% over the same period for Saudi Arabia.
Survey data for the first quarter of the year point to a solid expansion in non-oil sectors as well, with strong growth in business activity and new work in the UAE, Saudi Arabia and Qatar.
For Dubai in particular, Expo 2020 has helped to boost activity over its duration, and the relaxation of travel restrictions has contributed to a strong recovery in the tourism and hospitality sector over the same period.
International visitor numbers have recovered to around 70% of pre-pandemic levels in the first couple of months of this year.
Hotel occupancy bounced back in February to over 80% after slipping in January as a result of the Omicron variant of Covid-19, and hotels have been able to almost double their revenue per available room in the first two months of 2022, compared with the same period a year earlier.
The largest source market for international visitors to Dubai so far this year has been Saudi Arabia, which has displaced India from the top spot, and visitors from other GCC countries have returned in larger numbers as well as travel restrictions have been relaxed, the report said.
There has also been a sharp rise in the number of visitors from the UK and Europe relative to early 2021 as those countries have signalled a desire to “live with” the coronavirus.
With the reopening of other markets such as Australia, New Zealand and Singapore, we are optimistic that the recovery in international tourism will continue over the course of the year, underpinning growth in the UAE’s transport and hospitality sectors, Emirates NBD said.