GCC Tourism's GDP Contribution to Surge to $340 Billion by 2030: Fitch

UAE, 10 July, 2024 : The Gulf Cooperation Council’s (GCC) tourism sector is projected to see a significant boost in GDP contribution, increasing from $130 billion in 2023 to over $340 billion by 2030, equating to more than 10% of the region's GDP, according to Fitch Ratings. The aviation industry is expected to play a crucial role in this growth, with air passenger traffic anticipated to show substantial increases.

Modern Airports and Recovery Trends

GCC countries already host some of the world’s most modern airports, such as Dubai International Airport (UAE), Hamad International Airport (Qatar), and King Abdulaziz International Airport (Saudi Arabia). In 2023, GCC airport traffic surpassed 2019 levels by 8%, demonstrating a strong recovery, with traffic up by 20% compared to 2022. This contrasts with most EMEA airports, where 2023 traffic reached only 97% of 2019 levels.

Significant Investments in Aviation

The UAE and Qatar have heavily invested in their airports and flagship airlines over the years, establishing themselves as major international passenger hubs. Saudi Arabia has also ramped up investments in its airports to meet anticipated population growth and increased international visits, including pilgrim tourism. Dubai recently announced a $35 billion plan to expand Al Maktoum International Airport to handle 260 million passengers annually.

Shift to Public-Private Partnerships

GCC countries are increasingly embracing public-private partnerships (PPPs) for infrastructure projects. Dubai announced a pipeline of PPPs in social and transport sectors worth $10 billion and $1 billion, respectively. In 2023, Saudi Arabia revealed plans for 200 projects across 17 sectors, including four airports. The Abha Airport procurement attracted significant interest from local and international investors, marking a growing trend in PPP airport concessions in the region.

Diversifying Funding Sources

GCC countries are looking to bond and sukuk markets to access a broader pool of investors and secure long-term financing for large projects. Fitch’s EMEA airports are rated under the Transportation Infrastructure Rating Criteria, which will also apply to future projects in the GCC. Fitch’s current portfolio includes issuers with diverse debt structures, from corporate-like issuers with senior unsecured debt to project finance hybrids with strict covenants.

Source : www.zawya.com