Inbound travel to Middle East to grow 40% by 2027

Travel bookings across the Middle East are set to generate more than US$127 billion by 2027, according to the latest market insights.

Hospitality consultancy Insight Out partnered with global travel research company Phocuswright to compile the annual Middle East Travel Market Report.

The report focuses on the UAE, KSA, Egypt and Qatar, providing detailed analysis of these key markets, including market sizing, future projections, distribution trends and insights into key travel segments, such as air travel, hotels and car rentals.

The latest edition forecasts a 40% growth in the region's travel sector, driven by substantial investments in travel infrastructure and increasing consumer demand.

The report reaffirms that the region's travel market is on a clear upswing with a 13% year-on-year growth recorded in travel gross bookings in 2023, which is five times higher than the growth in GDP in the region.

The UAE's travel market remains a dominant force in the region, recording US$44.5 billion in gross bookings in 2023, a 12% surge from the previous year.

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"Our collaboration with Phocuswright continues to provide vital data and insights into the Middle East's rapidly expanding hospitality and travel landscape," said Insight Out Consultancy Managing Director, Li Hawkins.

"The sector is rapidly evolving particularly with the acceleration of digital technology and the increasing demand for experiential travel.

"With these significant transformations in the travel landscape in the region, comes higher expectations from today's visitors to the Middle East who seek more profound, meaningful engagements that showcase the rich history and diverse traditions of the region."

Key takeaways:

• UAE: Its impressive growth was fuelled by strategic investments in airline routes, hotels, and attractions, underpinned by the nation's advanced tourism infrastructure. The hotel sector expanded significantly, with a 16% rise in bookings, driven by a diverse range of accommodations and increased inbound and domestic tourism. The UAE's focus on innovation, sustainability, and diversification in tourism positions it for ongoing growth, despite challenges like fluctuating demand and heightened competition from Saudi Arabia and Qatar.
• Saudi Arabia: Propelled by ambitious projects and strategic investments, Saudi Arabia's travel sector experienced a remarkable surge in 2023, with gross bookings reaching an impressive $17 billion, reflecting a 16% year-over-year growth. This growth was driven by rising domestic travel demand and increased inbound tourism.
• Qatar: Building on the global spotlight from the FIFA World Cup 2022, Qatar's travel industry continued to climb in 2023, with gross bookings nearing US$16 billion, up 8% from the previous year. The hotel sector diversified, offering a broader range of accommodations from luxury to budget, while car rentals became increasingly popular as travellers explored beyond Doha.
• Egypt: The tourism industry here flourished in 2023, drawing 14.9 million visitors and outpacing pre-pandemic revenue levels in Egyptian pounds. Despite challenges such as currency devaluation, geopolitical tensions, and global economic fluctuations, Egypt's tourism sector remains resilient, with a 63% increase in gross bookings in local currency.
• Digital Maturity and Transformation: The digital revolution in the Middle East travel market reached a tipping point in 2023, with online bookings accounting for a remarkable 46% of total gross bookings. Online travel agencies saw a 14% year-over-year increase in booking values, with hotels making up 55% of these bookings.

For more information, visit www.phocuswright.com/travel-research/market-overview-sizing/middle-east-travel-market-report-2023-to-2027

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