Middle East tourism sector can capitalise on global trends, says PwC

On the verge of massive growth, the tourism and hospitality industry of the Middle East must act now to respond to and capitalise on the global trends which will impact the regional sector, as outlined in a new report from the local arm of Big Four firm PwC.

The Middle East branch of professional services powerhouse PwC has examined the region’s growing tourism and hospitality industry, shining a light on the sector’s challenges and opportunities in reference to the firm’s newly devised ADAPT framework, which considers the regional impact of the converging global megatrends of growing wealth disparity, shifting age demographics, technological disruption, increased urbanisation, and a rise in national populism.

"Over the past decade, the Middle East has developed into a global hub for tourism and leisure. Visitors are attracted to the region’s retail offerings, hotels, beaches, and unique experiences such as a trip to the top of Burj Khalifa, Sheikh Zayed Grand Mosque in the UAE, Museum of Islamic Art in Qatar and the old-fashioned souks in Oman. However, new winds of change will require further transformation within the travel and tourism industry in the region," the PwC report states. 

The impact of these global trends, the firm says, will manifest in the Middle East tourism and hospitality market in a variety of manners, from employment generation to the enhancement of regional programmes toward social and cultural transformation, with the potential for the local industry and governments to take advantage over the long-term with a focus on the short-term.In terms of the growing social disparity between the haves and have-nots, of which the Middle East has the greatest global levels of inequality (although such imbalance can be primarily attributed to differences at the national level) the report points to common regional elements such as widespread youth unemployment, citing the 30% unemployment rate for Saudis under the age of 25 and a 50% rate in Oman.

The governments of the Middle East have to date responded to this youth unemployment situation through various measures, but foremost through the promotion of the private sector and by way of diversification toward knowledge-based economies. Yet, the tourism and hospitality industry is the largest employment generating sector globally, and, as Dubai has already demonstrated, holds great potential in broader socioeconomic terms if tourism policies are prioritised and the various stakeholders properly aligned.

Further to local youth unemployment, is the shift in international age demographics, both in terms of a growing youth bulge in emerging economies – with greater mobility and a desire for travel – and a generally greying global population of ‘silver’ tourists, together creating a need for tourist and hospitality market diversification. Again, this can serve as both an employment generator for a young, idle workforce, including as to the development of new entrepreneurs and small businesses, as well as acting in concert with national programmes for diversification.

PwC Partner and Global Deals Real Estate Leader, Martin Berlin concludes; “The tourism and hospitality industry is on the cusp of massive growth in the Middle East and it can play a key role in responding to some of the big challenges we face around job creation and the evolution of the private sector. But if it is to play such a central role, the entire tourism value chain must work together to realise future opportunities – through digitisation, differentiation, alignment and the development of a mindset that embraces tourism and customer service.”