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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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
