International tourist arrivals expected to increase by 17.3 million between 2024 and 2029
During the Economy Middle East Summit 2024, together with Haitham Mattar, managing director of IHG Hotels & Resorts and Sunil John, founder of ASDA’A BCW and former CEO MENA for BCW, we discussed the role of tourism as a dual engine for economic and social development in the Gulf region, its potential to stimulate local economies and act as a bridge between cultures.
As domestic and international travel continues to grow, digital innovations are dramatically changing the way consumers use payments. In the GCC, this shift is evidenced by the fact that contactless now accounts for 99 percent of all face-to-face transactions, reflecting the consumer preference for more convenient and secure payment options.
Visa, a network committed to working for everyone, everywhere, is at the core of this money movement. It plays a crucial role in facilitating commerce across geographies, connecting consumers, businesses, and economies worldwide. At a time when digital payments are an integral part of every business, the importance of innovative digital payment solutions cannot be overstated. This shift toward digital payments is playing a significant role in strengthening the UAE’s position as a global economic powerhouse.
UAE’s rise as a global tourism hub
Let us start with some statistics and insights. The UAE has firmly established itself as one of the most popular travel destinations worldwide, with Dubai consistently topping the TripAdvisor Travelers’ Choice Awards. A report by ForwardKeys highlights the impressive growth in international visitors to the UAE in 2023, which was nearly 40 percent higher than in 2019. Furthermore, Dubai’s DXB airport surpassed pre-pandemic levels to become the world’s busiest international airport.
Inbound tourism from around the world to the UAE is thriving, with a significant portion of this growth coming from other GCC countries. The country is the most visited in the GCC, drawing visitors for a variety of reasons, including shopping, leisure, study, healthcare, business, and investments. Additionally, the UAE serves as a second home for over 100,000 cross-border residents – individuals who reside in UAE for 6 months and abroad for the remainder of the year – who contribute more than 20 percent of the country’s inbound transaction volumes (top corridors being KSA, USA, and the U.K.).
Higher spend driven by affluent travelers, longer stays
Retail spending from international visitors in the UAE has seen a significant revival post pandemic, with an average increase by almost 40 percent in 2023, reflecting the UAE’s enduring appeal as a top global tourism destination. This was marked by the return of affluent travelers and lengthier stays, contributing to an increased average retail spend per trip.
Spending on services like dining and accommodation has seen an even stronger resurgence, reflecting not only higher costs associated with these services but also the release of pent-up demand as consumers indulge more when abroad.
The number of international tourists to Dubai has surged, with 3.7 million arrivals recorded in the first two months of this year, up from 3.1 million in the same period in 2023. This upward trend, underpinned by initiatives such as the Dubai Economic Agenda D33, is a testament to the resilience and robustness of the UAE’s economy.
Infrastructure investments fueling economic vision
Forecasts predict an increase of 17.3 million in international tourist arrivals in the UAE between 2024 and 2029. This growth is set to boost the tourism sector’s contribution to GDP by 2.6 percentage points between 2023 and 2028. Infrastructure projects like the Al Maktoum International Airport, designed to handle 260 million passengers annually, exemplify the country’s forward-looking economic vision.
The demand for outbound travel from the UAE has also reached record highs, with VisaNet data revealing a 30 percent growth in 2023 compared to 2022. The top destinations for these travelers include the U.K., France, Saudi Arabia, Italy, and Türkiye. Interestingly, cross-border residents generate 35 percent of the UAE’s outbound travel volumes.
UAE travelers are increasingly becoming more digital-savvy, as revealed by Visa’s Global Travel Intentions Study. Despite rising costs, over 70 percent are comfortable using digital wallets during their travels, signifying a decisive shift toward digital payments.
Strategies for regional growth
In the UAE, the tourism landscape is nothing short of extraordinary. As described above, we’ve seen an unprecedented surge in tourism. With growth and expansion that outpaces many other regions, tourism remains a top priority in the UAE. The question resonating in every meeting and every conversation is: What are the unique strategies that can drive the growth of UAE’s tourism sector now?
The answer lies not just in the growth, but how this growth is achieved and sustained.
Diversification is a significant driver of this growth. The UAE is a kaleidoscope of natural, historical, cultural, and wellness attractions. By developing and promoting these attractions, coupled with creating new experiences, we can cater to a diverse range of travelers. For instance, Visa’s partnership with Dubai Health Authority aims to position Dubai as a prime destination for health tourism.
Sustainability remains a key consideration
Infrastructure and technology investments are critical to enhance travel experiences, making them seamless, convenient, and enjoyable. The UAE, known for its tech-savvy, young population, has seen digital payments become a fundamental part of travel expectations and preferences.
Hosting international events is another aspect that boosts the UAE’s global profile. Our event calendar in GCC in general is packed with major upcoming events that will continue to attract global attention, further enhancing the UAE’s global tourism profile. Saudi Arabia is expected to host the FIFA World Cup and its own Expo. In terms of sports tourism, Abu Dhabi and Saudi Arabia have been hosting international Golf and Tennis tournaments. The Formula 1 Grand Prix, hosted by several GCC countries including Bahrain and the UAE, has also been a major attraction.
Finally, sustainability remains paramount. The economic benefits of tourism need to be balanced with preserving the UAE’s natural and cultural heritage and addressing the environmental and social impacts of tourism. The Visa Global Travel Intention Study shows that about 73 percent of travelers are aware of eco-friendly travel, with 49 percent actively seeking sustainable travel choices during their most recent trip.
Revolutionizing travel experiences
At Visa, we understand that travel starts with a dream, an inspiration, a desire to explore the unknown. We aim to be there from the very beginning, from the moment our cardholders start dreaming about their next destination. We strive to bring unique offers that inspire our cardholders to explore places they may not have thought of or believed they could afford. Through strategic partnerships and co-brands, we make seemingly unreachable destinations accessible.
Once the dream destination is chosen, we stand with our cardholders in the planning and booking phase. We provide attractive offers for hotel bookings and car rentals, supported by a premium concierge service. These partnerships with entities like Booking.com, Agoda.com, IHG, Jumeirah hotels, and the Visa Luxury Hotel Collection help customers curate memorable vacations.
Lucrative co-branded travel card offers
Additionally, cardholders can enjoy several benefits their Visa cards have to offer. For instance, co-branded travel cards often provide lucrative benefits such as bonus air miles, accelerated rewards, travel booking with points, complimentary lounge access, and travel insurance. By carefully choosing a card that aligns with their needs in terms of fees, rewards, and offers, Visa cardholders can make their travel more affordable.
We also suggest using the Visa card for expenses like public transport, airport parking, in-flight meals to accumulate reward points. Such points can be used to avail various perks, including free lounge access, complimentary meals, delayed checkouts, concierge services, additional baggage allowances, and discounted car rental services. Finally, managing expenses wisely by distributing spending across multiple cards can enhance cardholders’ spending limit, yield more rewards and perks, and extend the interest-free repayment period, provided the cards have different payment cycles.
Travel protections for cardholders
Visa’s commitment to security is unwavering. Not only are Visa card transactions backed by our advanced security technology but we also provide other protections to ensure that our cardholders have peace of mind throughout their travel. From comprehensive travel insurance, emergency medical assistance, emergency card replacement, to insurance cover for rented cars, we have our cardholders covered. Our cardholders can enjoy their travel experience without worrying about the unexpected.
But the journey doesn’t end there. Once our cardholders reach their destination, we aim to enhance their experiences. We work continuously to provide exclusive, targeted offers and programs that present new and unique experiences. For example, in the UAE, there are countless experiences that become accessible when using a Visa card.
Visa leverages unique data insights, analytical and advisory capabilities to personalize these offers. We partner with various industry players in the region, like Saudi Tourism Authority, to create specific, contextual offers that resonate with individual cardholders. In this way, we not only facilitate transactions but also inspire, protect, and enhance the overall travel experience for our consumers in the UAE, making it more secure, convenient, and rewarding.
Shaping the future of tourism
As we navigate through this era of rapid change, certain trends are poised to profoundly reshape the travel and tourism sector over the next five years.
Foremost among these is sustainable and responsible tourism. A rising awareness among travelers about the environmental and social impact of tourism has led to an increased demand for sustainable and responsible tourism options. Travelers are no longer just seeking adventures but are also mindful of the footprints they leave behind. This shift presents an opportunity for Visa to drive initiatives that promote sustainable and ethical practices in tourism.
Another trend that is gaining momentum is the personalization and customization of travel experiences. With the availability of data and advancing technology, travelers seek unique experiences tailored to their specific needs and preferences. At Visa, we leverage unique data insights, analytical and advisory capabilities to deliver personalized experiences and offers that resonate with individual travelers.
The next trend — digitalization and technology — continues to revolutionize the travel and tourism industry. The focus is on providing seamless, convenient, and enjoyable travel experiences with digital tools and platforms. Visa, as a global digital payments technology company, is at the forefront of this transformation, enhancing travel experiences with secure, convenient, and innovative payment solutions.
Trends shaping the future of tourism
However, perhaps the most transformative trend is the evolution of travel purposes. Travel is no longer confined to leisure or business; it’s a combination of both and more. We see the rise of digital nomads, combining work with travel, and business travelers integrating private events or well-being time off into their trips. This “new normal” presents a diversified purpose of travel, and Visa is committed to supporting this diversity among its customers and partners.
Lastly, the geographic origin of tourists is shifting. We foresee a surge in travelers from places like China and other parts of the Global South. Recognizing this shift, Visa continues to build partnerships and offer solutions tailored to these emerging markets.
In conclusion, these trends — sustainability, personalization, digitalization, travel transformation, and geographic shifts — are not just shaping the future of tourism; they are also presenting opportunities for Visa to inspire, protect, and enhance travel experiences in more sustainable, personalized, and diversified ways.
Dr. Saeeda Jaffar is senior vice president and group country manager for Visa GCC.
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