The Gulf Cooperation Council (GCC) region stands out as one of the most resilient tourist hubs in its post-Covid recovery. New insights from the Mastercard Economics Institute delve into tourism in the six-country region of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
During Covid, industry-wide inbound travel spending dropped significantly within the GCC – around 13 percentage points lower than the rest of the world. Tight restrictions, particularly in the Kingdom of Saudi Arabia (KSA), affected religious and business travel in the region. However, travel bounced back in 2021 to close this gap.
In 2022, the GCC’s resilience became apparent, and with smaller states leading the charge, the region outperformed the entire international travel industry’s recovery by 40% It also surpassed the recovery of the top-10 highest-spending destinations by about 60% .
GCC recovery outperforms entire international travel industry by 43%: 1
SOURCE: UNWTO Tourism Statistics, Author Calculations
If the region is measured as a single country, it features in the top-five tourist destinations and ranks third for inbound tourism spending in 2022, with USD $45 billion flowing into the region from tourism in 2022. This inbound spending supports the local economy and is an increasingly important part of the tourism industry for the GCC region. 2
SOURCE: UNWTO Tourism Statistics, Author Calculations
London and Paris are known for attracting high-spending tourists, but visitors to Dubai in the UAE and to KSA outspent them on payment cards in 2022. On average, visitors to Dubai spent around $300 more per card in 2022 compared with those who visited London or Paris.
SOURCE: TOURISM INSIGHTS PLATFORM
Highest average spend per card in the GCC is often local to the region. For Dubai, the top source is Kuwait. For KSA, the second highest is the UAE, including Dubai, after China.
GCC outbound tourists are leading spending in international cities too. For example, the prominence of travelers from Kuwait and the UAE is observable internationally outside the GCC as well. Kuwaiti tourists spend an average of $3,390 per card in Paris, five times the spending by American tourists, on average.
Average spend per card by origin market
USD, Feb 2022 – Jan 2023
(Columns correspond to destinations, and rows correspond to origin markets)
SOURCE: TOURISM INSIGHTS PLATFORM
The GCC region is well known for its luxury hotels. This reputation of service excellence and high hospitality standards extends to budget-friendly hotels, too. The hotel satisfaction index, based on customer review data, shows that hotels in the GCC receive higher satisfaction scores than those in other prominent tourist cities.
For higher-end stays, where the region’s average spending is bolstered by “luxury aficionados” 5-star hotels in Dubai and Riyadh scored higher than 5-star hotels in international cities by a small margin, highlighting the competitiveness of the luxury hotel industry.
Hotel satisfaction scores for 3-star hotels outperform by an even wider margin. Dubai and Riyadh scored 71 and 69, while Paris, London and NYC trailed with 56, 42 and 30.
SOURCE: Mabrian Technologies via Online Travel Portals
The region attracts visitors with diverse interests. Tourists are indulging in arts and culture, wellness, cuisine, shopping, nature, and family activities, to name a few. Interest in wellness products and services is booming.
Social media posts by domestic tourists in Dubai in 2022 focused on arts & culture and wellness, which accounted for 24% and 18% of social media mentions. By comparison, British and American visitors to KSA showed interest in wellness, outdoor, and family activities, with the “active lifestyle” category accounting for nearly 1 in 5 social media mentions.
For KSA - Only considering US and UK as source markets
SOURCE: Mabrian Technologies via Social Networks
Reviews from tourists in 20 countries show that tourism offerings in Dubai, Riyadh and Abu Dhabi are on par with those in London, Paris, New York and Singapore.
Art & Culture: history & heritage sites, museums, engineering & architectural works, religious sites. Reviews from October 2022 to March 2023.
Family Activities: Theme & water parks, public parks, Zoos, Fun & game activities (such as escape rooms, scavenger hunts), etc.; Reviews from October 2022 to March 2023.
SOURCE: Mabrian Technologies via Social Networks
Tourism spending is increasing at a faster pace for experience-oriented spending than for shopping for “things”, according to a report published by the Mastercard Economics Institute. The gap between experiences and things is even greater in economies that cater to high-income travelers who tend to spend more on luxury hotels, restaurants and unique experiences.
Extending this analysis, we evaluate outbound tourism expenditures, rather than inbound tourism expenditures, for overall retail and luxury retail shopping by tourists leaving the UAE and KSA. We find that for both markets, luxury-focused outbound spending outperforms overall retail spending - up by 53% and 65% in each country relative to 2019. By comparison, luxury shopping sprees are up 154% and 100%.
All things considered, the GCC region is becoming an increasingly important contributor to the global travel, leisure and hospitality industry.
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Footnotes
1 Reflects industry-wide estimates of inbound travel spending by year and does not reflect Mastercard performance data.
2 Reflects industry-wide estimates of inbound tourism spending for 2022 and does not reflect Mastercard performance data.
Acknowledgements
This research draws on joint research carried out between the Mastercard Economics Institute and McKinsey & Company. A special expression of gratitude to McKinsey & Company, Chiara Caiati at Mabrian, and David Klippenstein at Mastercard for research support.
About
Mabrian Technologies
Mabrian Technologies provides travel data and insights since 2015, today in more than 40 countries. Using Artificial Intelligence techniques and a visual dashboard, Mabrian integrates more than 30 global sources to track the full traveler journey: air travel, hotel and holiday rentals stay, spend at destination, mobility and social impressions.
The Mastercard Economics Institute
Mastercard Economics Institute launched in 2020 to analyze macroeconomic trends through the lens of the consumer. A team of economists, analysts and data scientists draws on Mastercard insights – including Mastercard SpendingPulse™ – and third-party data to deliver regular reporting on economic issues for key customers, partners and policymakers.
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