The Middle East is leading the world in the international travel recovery in the fourth quarter of this year and into early 2023, despite geopolitical and economic headwinds, travel data analysis company ForwardKeys has said.
Forward bookings for the Middle East show a 4 per cent increase in international arrivals in the fourth quarter compared with the same period in 2019, ForwardKeys said in a report on Wednesday.
The report was released at the World Travel and Tourism Council (WTTC)'s global summit in Riyadh.
The region is pulling ahead of the global average of a 30 per cent decline in the fourth quarter compared to pre-pandemic levels, the latest ticketing figures show.
“The Fifa World Cup is certainly the key driver for its travel recovery,” said Juan Gomez, head of market intelligence at ForwardKeys.
International arrival levels could return to those seen in 2019 by 2023, with travel to the Middle East up by 15 per cent on pre-pandemic levels in the first quarter of 2023, the bookings figures show.
“The Middle East is the only region to show growth into 2023, but Africa and America are not too far behind. Overall, the outlook for 2023 looks promising, despite high inflation in key source markets and the looming recession,” said Mr Gomez.
“Tickets are still being booked and economy-class travel continues closing the gap with premium cabins.”
The Middle East is now attracting more premium travellers than in 2019, the report shows.
Saudi Arabia recorded the biggest growth, but Qatar, Egypt, Jordan and Lebanon are also growing, with a regional average of 11 per cent above 2019, it said.
Also, at the WTTC summit in the Saudi capital, the kingdom called for worldwide collaboration among national tourism organisations to create a new Tourism Innovation Index for a sustainable and resilient tourism landscape globally.
The Saudi Tourism Authority is collaborating with industry intelligence and news platform Skift to establish a framework for the potential index, it said in a statement on Wednesday.
The index will “provide invaluable data and insight that informs policy, drives meaningful change and promotes continuous enhancement”, said Fahd Hamidaddin, chief executive of the authority.
The global index will aim to define “what really constitutes innovation in tourism”, said Rafat Ali, founder of Skift.
Among the countries and regions which have already expressed interest in collaborating are Singapore, South Korea, Japan and Western Australia, he said.
Sustainability in the travel and tourism sector was another major theme at the WTTC summit.
The industry can reduce its emissions by more than 40 per cent by 2030 if it takes radical action to contribute to the race to net zero, according to a report by the Saudi-based Sustainable Tourism Global Centre and advisory firm Systemiq, which was released during the summit.
The industry is currently generating significant environmental and social costs and is responsible for 9 per cent to12 per cent of total global greenhouse gas emissions, the report found.
Without significant change, these emissions will rise 20 per cent by 2030, representing one third of the total global carbon budget of that year, putting the viability of the industry at risk, it said.
Industry leaders and policymakers must move urgently to enact a reform agenda centred around five priorities: reduce emissions; protect and restore nature; strengthen communities; shift traveller behaviours; and increase resilience to climate change and other shocks, it said.
The reform agenda requires increased investment in transport, facilities and nature totalling $220 billion to $310 billion a year to 2030, equal to 2 per cent to 3 per cent of the industry's $10 trillion contribution to the world’s gross domestic product, the report said.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Company profile
Date started: December 24, 2018
Founders: Omer Gurel, chief executive and co-founder and Edebali Sener, co-founder and chief technology officer
Based: Dubai Media City
Number of employees: 42 (34 in Dubai and a tech team of eight in Ankara, Turkey)
Sector: ConsumerTech and FinTech
Cashflow: Almost $1 million a year
Funding: Series A funding of $2.5m with Series B plans for May 2020
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
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Simran
Director Hansal Mehta
Stars: Kangana Ranaut, Soham Shah, Esha Tiwari Pandey
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Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
