IDEATION CENTER INSIGHT

Destination
Middle East
Boosting the
region’s position
in global tourism
Contacts
Dubai

Karim Abdallah
Partner
+971-4-436-3000
karim.abdallah
@strategyand.ae.pwc.com

Marwan Bejjani
Partner
+971-4-436-3000
marwan.bejjani
@strategyand.ae.pwc.com

Dima Sayess
Partner
+971-4-436-3000
dima.sayess
@strategyand.ae.pwc.com

Vivek Madan
Principal
+971-4-436-3000
vivek.madan
@strategyand.ae.pwc.com

Melissa Rizk
Senior Fellow, Ideation Center
+971-4-436-3000
melissa.rizk
@strategyand.ae.pwc.com
ABOUT THE AUTHORS

Karim Abdallah is a partner with Strategy& Middle East, part of the PwC network. Based in Dubai,
he is a member of the family business, investments, and real estate practice in the Middle East.
He leads the real estate platform in the region and supports clients in identifying opportunities in
the growing tourism sector, defining winning concepts and conducting feasibility studies for mega-
projects and large-scale tourism destinations.

Marwan Bejjani is a partner with Strategy& Middle East. Based in Dubai, he leads the travel and
tourism platform in the Middle East. He supports clients in defining winning strategies across the
travel and tourism sector. His experience covers destination development and activation, travel
distribution, destination management company setup, governance, and partnership development.

Dima Sayess is a partner with Strategy& Middle East and the director of the Ideation Center,
the leading think tank for Strategy& Middle East. Based in Dubai, she has more than 15 years of
experience in public-sector consulting in the region, including working for Strategy&, focusing on
socioeconomic and government reforms. She has also worked as a strategic development advisor at
Dubai’s Executive Council.

Vivek Madan is a principal with Strategy& Middle East. Based in Dubai, he is a member of the
travel and tourism platform in the Middle East. He specializes in strategy development, commercial
performance optimization, and new business ventures and is an expert in aviation. He recently
supported the strategy development and execution of a multicontent aggregation platform for
tourism in the GCC region.

Melissa Rizk is a senior fellow with the Ideation Center. Based in Dubai, she has worked on thought
leadership projects focusing on economic and social development, national and corporate digitization
trends and applications in the GCC region, and the leisure and entertainment sector. Her previous
experience was as an associate within Strategy& Middle East’s government and public sector practice.

Alessandro Borgogna and Alice Klat also contributed to this report.

The Ideation Center

TheIdeationCenteristheleadingthinktankforStrategy&MiddleEast,partofthePwC
network.Weaimtopromotesustainablegrowthintheregionbyhelpingleadersacross
sectorstranslatesocioeconomictrendsintoactionsandbetterbusinessdecisions.Combinin
innovativeresearch,analysis,anddialoguewithhands-onexpertisefromtheprofession
communityintheprivateandpublicsectors,theIdeationCenterdeliversimpactfulideas
throughourpublications,website,andforums.Theendresultisonethatinspires,enriches,
andrewards.TheIdeationCenterupholdsStrategy&’smissiontodeveloppracticalstrategie
andturnideasintoaction.AttheIdeationCenter,weenjoythefullsupportofallpracticesint
MiddleEast.Togetherwebringunsurpassedcommitmenttothegoalofadvancingtheinterests
oftheMiddleEastregion.Findoutmorebyvisitingwww.ideationcenter.com.

Strategy& | Destination Middle East 1

EXECUTIVE SUMMARY

Tourism represents a significant long-term economic opportunity for the Gulf

Cooperation Council (GCC)1 countries and Egypt, one that will be available years
after the current economic turmoil. These countries understand its potential and have
focused in recent years on enhancing their offerings with the aim of becoming global
tourism destinations.

The performance of the GCC countries and Egypt has often not matched their ambition. With
the exception of the United Arab Emirates (UAE), which attracts large numbers of visitors, these
countries do not receive as many tourists as they could. These numbers were further reduced
by the COVID-19 pandemic. However, the scale of the long-term opportunity remains unaltered.

To develop the sector, governments need to embark on a five-stage tourism journey. First,
they should define their vision for tourism in their country. Second, they should introduce
effective governance structures. Third, they need to identify the travelers that are most likely
to be attracted to their offerings, segmented by source markets and sociodemographic
profiles. Fourth, they must prepare the destination by burnishing the appeal of their tourism
products and experiences, and ensuring that destinations are ready to welcome tourists. Fifth,
they need to ensure tourists will visit the country, which involves marketing and promotion
campaigns aimed at target travelers in source markets, platforms that convert prospective
tourists’ interest into bookings, and transport connections to the destination. All of this needs
to take advantage of the digital technologies that are involved in all stages of tourism, for
providers and travelers alike.

Once the stages are completed, the country should review and renew them regularly to
reinforce its position in the global tourism market. By developing tourism systematically, these
countries have the opportunity to build thriving global tourism destinations in the Middle East
that contribute to their economies and create jobs.

2 Strategy& | Destination Middle East

A COMPELLING OPPORTUNITY FOR THE REGION

The GCC and Egypt understand tourism’s potential for economic diversification, growth, and
job creation and have sought to become part of the recent global expansion in the sector.
These governments’ vision of building major tourism destinations in the Middle East is as
compelling as ever.

In recent years, the GCC and Egypt have focused on enhancing their tourism infrastructure
and offerings, and marketing their destinations far and wide. However, performance has often
not matched ambition. Tourist arrivals were still relatively low for most of these countries in
2019, ranging between 0.1 and 0.7 travelers per head, with the exceptions of Bahrain and
the UAE at 7.4 and 2.5, respectively.2 By comparison, Spain and Singapore attracted 1.8 and
3.3 travelers per head, respectively.3 There has also been little growth in tourist arrivals in the
region between 2014 and 2019, with decreases in some countries.4

The COVID-19 pandemic has disrupted the travel and tourism sector and brought much of it
to a temporary halt. Strategy& is forecasting that those countries with an established tourism
sector could have to wait at least three to five years for tourism to regain the level of demand
it enjoyed in 2019. Nonetheless, historically tourism has proven to be among the most resilient
sectors. Indeed, in recent years tourism has been a success story, contributing 10.3 percent
to global GDP in 2019.5 The sector was expected to grow by nearly 50 percent in the coming
decades, principally due to more frequent travel among the middle class and the youth
population, along with the emergence of new destinations.6 As such, GCC and Egypt should
not be distracted from the long-term tourism opportunity.

Strategy& | Destination Middle East 3

STARTING THE TOURISM JOURNEY

The GCC countries and Egypt need to adopt a systematic and coherent approach, a tourism
journey that will develop the sector over the long term (see Exhibit 1). What the tourism journey
does is create a structure within which the government and stakeholders, in the public and
private sectors, can act and coordinate. At the end of the journey, the government will need to
review and renew its approach, to continuously reinvent and innovate to prevent its offerings
from becoming stale. Reinforcing the relationship between travelers and the country is critical,
as the strength of a tourism destination comes from its reputation and repeat visitors.

4 Strategy& | Destination Middle East

EXHIBIT 1
The tourism journey consists of five stages

1 DEVELOP A NATIONAL TOURISM VISION AND PLANS

2 INSTITUTIONALIZE EFFECTIVE TOURISM-SECTOR GOVERNANCE

IDENTIFY THE TARGET

3 TOURIST SEGMENTS 4 PREPARE THE DESTINATION

Travel distribution
and connectivity
Marketing and promotion

5 CONNECT TOURISTS
TO DESTINATIONS

DIGITIZE THE END-TO-END TOURISM JOURNEY

Source: Strategy&

Strategy& | Destinao Midle East 5

1. DEVELOP A NATIONAL TOURISM VISION AND PLANS

The first stage of the tourism journey is for the government to define its national tourism vision
and plans. To design a consistent strategy and secure collective commitment, all stakeholders,
public and private, need to understand and support this vision.

The vision will incorporate target outcomes, such as the anticipated number of tourists,
tourism’s contribution to GDP and job creation, and the country’s desired image as a tourist
destination. Already countries across the region have set objectives. Saudi Arabia’s Vision 2030,
for example, aims to make the country an appealing destination for regional and international
travelers. It plans to offer multiple integrated tourism products and experiences, such as
religious; heritage; entertainment; urban; and meetings, incentives, conferences, and exhibitions
(MICE). Saudi Arabia wants to increase the number of domestic and international tourists to
100 million a year by 2030 and boost the sector’s contribution to 10 percent of GDP, up from 3
percent in 2018.7

Other countries have a niche approach. For example, Bahrain aims to become an elite
international and regional family destination.

6 Strategy& | Destination Middle East

2. INSTITUTIONALIZE EFFECTIVE TOURISM-SECTOR GOVERNANCE

The second stage is to ensure that there is effective governance that aligns the aspirations
and roles of all public and private stakeholders, thereby ensuring successful implementation
of the vision and plans.

The tourism sector involves numerous organizations as it encompasses a variety of

subsectors. These include the government, through the ministry of tourism and tourism
boards; travel players such as airlines and transport companies; accommodation players,
which is mainly hotels, conferences, and events entities; attractions and destinations, such
as mega-parks and museums; and tourism-services-related entities, such as tour operators
and travel agencies. In some cases, international organizations are also involved. In Saudi
Arabia, for instance, the government has established multiple dedicated entities to lead each
subsector involved: the ministry of tourism, the ministry of culture, the General Entertainment
Authority, the General Sports Authority, and the Saudi Exhibition and Convention Bureau.
The Saudi Commission for Tourism and National Heritage also recently signed a long-term
strategic partnership with the World Travel and Tourism Council.8

Sector governance is complex. Typically, the ministry of tourism chairs a council or

committee, with the role of coordinating efforts between the different subsectors and entities
to ensure they are all working toward a common goal and to oversee the implementation of
the various plans.

The second stage is to ensure that there is effective governance

that aligns the aspirations and roles of all public and private
stakeholders, thereby ensuring successful implementation of the
vision and plans.

Strategy& | Destination Middle East 7

3. IDENTIFY THE TARGET TOURIST SEGMENTS

In the third stage, the government must determine which tourists constitute its main target
segments. These are the travelers most likely to be attracted to the country’s offerings.

The government should segment these tourists according to their markets of origin and
their sociodemographic profiles. Data analytics and data sharing between tourism-sector
stakeholders, particularly when exploiting predictive and behavioral analysis, can support
governments in making informed decisions about which tourists to attract. Artificial
Intelligence (AI), machine learning, and geolocation can be used to identify target travelers
and predict their preferences.

Select source markets

Governments should prioritize the source markets that can make the most significant
economic contribution. Travelers from these source markets should be able to travel to their
destinations with relative ease and be a natural fit for the region.

Potential market size and propensity to travel

The most attractive source markets possess a mixture of a large number of outbound
travelers, rising long-term outbound tourism, and high average spending levels per head. In
recent years, the global source markets with the highest number of outbound travelers to
the GCC and Egypt have included China, France, Germany, Russia, the U.K., and the United
States. China was one of the fastest growing source markets with high average expenditure at
the destination of around $1,700 per trip per traveler.9

Convenience and proximity

Most international travelers prefer destinations that are relatively accessible or convenient.
Geographic proximity is an important factor. For the GCC and Egypt that means prioritizing
source markets in Africa, Europe, and South East Asia.

One of the effects of the pandemic has been to encourage travelers to seek destinations
closer to home, including those accessible by car. This means domestic and short-haul travel
is an important opportunity, an offering that will endure with customer loyalty. Travel bubbles,
also known as travel bridges or corona corridors, are essential to any such international
travel at present. These are exclusive arrangements between countries that follow similar
procedures to suppress infection rates. They allow people to travel within a specified zone
without the need for quarantine.

8 Strategy& | Destination Middle East

Natural fit

For some travelers, language and cultural fit also facilitate tourism. These travelers are more
likely to visit countries in which they can communicate easily through a shared language and
where they feel at home with the country’s moral, religious, and social norms. Familiarity with
a country encourages visitors and provides a stable stream of travelers.

The GCC and Egypt have two kinds of visitor profiles: concentrated and diversified. The
UAE and Egypt have diversified profiles, hosting visitors from a diverse range of countries,
a demonstration of their widespread appeal. Egypt has the largest share of Europeans, but
received a low percentage of Asians in comparison with GCC countries (see Exhibit 2). In
recent years, new source markets have emerged, in particular from Asia. Visitors from China
and India have been growing at a rate of more than 25 and 10 percent per year, respectively,
since 2013.10

EXHIBIT 2
The largest tourism markets tend to have the most diverse visitors

Visitors by country of origin (in thousands of trips, 2019)

Concentrated arrivals Diversified arrivals

12,500 2% 412 2% 3,318 4% 15,644 6% 2,136 21,300 17,804

9% 12%
22% 21% 26%
31%
5% 41% 30%
9% 33% 9%
15%

9% 23% 36%
25%
68% 63% 60%
44% 39%
30% 30%

Bahrain Kuwait Oman Saudi Arabia Qatar UAE Egypt

MENA Western region Asia Other

Note: Percentages may not sum due to rounding.

Source: Euromonitor; Bahrain Tourism & Exhibitions Authority; Visit Qatar statistics 2019; national statistics databases; Shawn Baldwin/Bloomberg,
“Egypt’s tourism sector sees ‘remarkable growth,’ tourism receipts to increase to 29.7 bn by 2024,” Egypt Independent, January 31, 2020 (https://
tinyurl.com/yxcd5jup); Strategy& analysis

Strategy& | Destination Middle East 9

Of course, the most natural fit is domestic tourists. They are particularly important at
present as they can help the recovery. Domestic tourism represented 71.3 percent of total
travel and tourism spending globally in 2019.11 The GCC and Egypt have not, however,
drawn sufficiently upon this segment. The number of domestic trips per head amounted
to only 1.4 per head in Saudi Arabia, 0.22 in Oman, and 0.1 in Egypt, compared to 3.4 in
China, Spain, and the United States (see Exhibit 3). Omanis tend to have an unusually high
level of spending when traveling domestically.

EXHIBIT 3
The region has potential for domestic tourism
(2018 data)

Domestic trips Domestic spend

per capita as % of GDP
3.5%
1.5 1.42 3.5

2.7% 3.0
2.4%
2.5
1.0
2.0
0.70
1.5
0.5
1.0
0.22
0.3% 0.5
0.04 0.02
0.13 0.00
0.0 0.0
Saudi Arabia UAE Oman Egypt Qatar Bahrain Kuwait
Domestic trips per capita (per 1,000 population) Domestic tourism spend as % of GDP

Source: Euromonitor; World Bank; Strategy& analysis

Some countries, such as Malaysia, are using domestic tourism to test offerings before mass
international travel resumes. Malaysia is focusing on two domestic tourism categories: safe
and green. Tourism Malaysia has launched campaigns such as #TravelLater to encourage
its citizens to stay home and visit domestic destinations to promote economic recovery. As
a result of these efforts, the country’s domestic tourism sector is expected to grow by 30
percent in the coming year.12

Identify sociodemographic segmentation of tourists

The government must also define the profiles of the target segments, identifying those most
likely to be drawn to the country’s tourism offerings. The GCC and Egypt should evaluate nine
segments that align with budget and desired experiences (see Exhibit 4).

10 Strategy& | Destination Middle East

 EXHIBIT 4
Tourist segments reveal distinct profiles according to travel experiences and spending
patterns

Sociodemographic segmentation of tourists

Demographic profile What they seek Preferred offerings

Conventional

Full-care Older travelers, at least Organized nature and cultural

Relaxation
seniors 65 years of age experiences

Budget-
conscious Middle- to low-income Organized activities;
Comfort
comfort travelers international brands
seekers

Family fun Mainly affluent

Entertainment All-inclusive resorts
travelers middle-class families

Comfort and
Well-off families and Sun and beach or urban
well-being Well-being
couples destinations
seekers

Business Middle- to high-income Convenience and

Luxurious short urban trips
tourists business professionals entertainment

Sports and
Young travelers on a Unique Exotic and less conventional
entertainment
budget experiences destinations
enthusiasts

Nature Outdoor activities and sports

Responsible travelers Ecotourism
lovers in exotic destinations

Natural reserves and outdoor

Authentic Authentic
Active travelers activities, in isolated
discoverers experiences
destinations
Explorers

Wealthy
Customized and personalized
world High-income travelers Discovery
programs
travelers

Source: Strategy&

Strategy& | Destination Middle East 11

4. PREPARE THE DESTINATION

The fourth stage is for governments to prepare the destination itself. This means enhancing
the appeal of tourism products and experiences, and ensuring that the destination can
welcome tourists.

Enhance the appeal of tourism products

The government should ensure that its tourism products are consistent with the preferences
of target tourist segments. Depending on its target market, a country’s tourism products can
focus on such intrinsic attributes as culture and heritage, “sun and beach,” or nature. There is
also the potential for offerings that are not intrinsic but that can be built. These include urban
tourism, which can mean shopping, MICE, and entertainment activities, such as theme parks,
concerts, and events.

Most countries should focus on a limited number of offerings. Currently, the UAE emphasizes
human-built offerings, while Egypt, Oman, and Saudi Arabia concentrate on intrinsic offerings
(see Exhibit 5).

12 Strategy& | Destination Middle East

EXHIBIT 5
A proportional comparison between offerings across different tourism categories
(based on quantity and popularity of supply)

United Arab Emirates Egypt Saudi Arabia

Current
Target in 2030

The UAE has cruises, MICE, sports and Egypt has heritage and culture, along with Saudi Arabia has mostly religious tourism, with
entertainment, and urban offerings, but with some sun and beach offerings. plans to expand into heritage and culture,
some sun and beach, and modern arts. MICE, urban, and nature.

Qatar Oman Bahrain

Qatar has some MICE and modern arts offerings. Oman has nature, and some heritage and Bahrain has some sports and entertainment,
culture, and sports and entertainment offerings. and urban offerings.

Kuwait

Heritage and culture Urban

Religious Sports and entertainment

Meetings, incentives, conferences,

Sun and beach and exhibitions (MICE)

Nature Cruises

Modern arts

Kuwait has some urban offerings.

Note: Saudi Arabia’s targets are based on its ambitious plans and ongoing mega-projects. Analysis does not account for education and healthcare tourism, as they are minor or non-
existent in most countries.
Source: National tourism websites; TripAdvisor; Lonely Planet; Google maps; Google travel; The Culture Trip; Time Out; Cruise mapper: Royal Caribbean (https://www.cruisemapper.com/
cruise-lines/Royal-Caribbean-1); Strategy& analysis

Strategy& | Destination Middle East 13

Burnishing the appeal of tourism products also means responding to travelers’ growing desire
for holistic experiences that can enhance them physically or spiritually, or that contribute to
the environment (see “The rise of sustainable tourism”). There is rising demand, for example,
for easily accessible, immersive, and participatory cultural and wellness trips. Hybrid forms of
tourism integrate wellness into hotels and transportation, with airports offering yoga rooms,
in-transit fitness clubs, and green spaces. Similarly, culture is changing to become more
experiential and interactive. Nuit Blanche is an annual, all-night free festival adopted in a
number of cities such as Helsinki, Melbourne, and Paris. It transforms a city center into art
galleries with installations, performances, and free access to cultural facilities.

The rise of sustainable

tourism
Another category to grow in the last decade journeys, and invest in the local market.13
is sustainable, also known as “responsible,” Typically sustainable tourism occurs in an
tourism. This form of travel seeks to reduce authentic destination, with the support of the
carbon footprint, preserve natural heritage, local community. Sustainable destinations
and conserve resources such as energy, seek tourists who travel by short flights, if
food, and water. Responsible tourists they fly at all, to reduce the carbon footprint;
select destinations for their sustainable and and arrive off season to balance demand
ethical practices. They buy local produce, across the year.
live authentic cultural experiences, and
prefer walking or biking. Some volunteer to Sustainable tourism has grown in response
conserve the environment by cleaning the to worries about the environmental impact
area they have stayed in and consuming of mass travel. These concerns are relevant
responsibly. There has already been a rise to such Middle East destinations as Egypt,
in demand for hiking, walking tours, cycling with its long-established tourism sector.
vacations, road trips, fishing, sea resorts, Egypt has identified sustainable offerings in
health farms, and visits to slightly isolated its national tourism vision and plans. Agro-
nature villages. tourism is becoming increasingly popular
in Saudi Arabia, where the government has
These tourists spend 50 percent more than been collaborating with the agricultural
regular travelers, take more time for their sector to offer holidays on farms.

14 Strategy& | Destination Middle East

 Ensure the readiness of the destination

The government needs to ensure its destinations can receive its target tourists and provide
them the experiences they seek. The GCC and Egypt can do this through two exercises:
assessing their state of readiness, and bearing in mind the specific needs of target traveler
segments. The government can use the results of these exercises to prioritize its efforts and
to coordinate with public and private stakeholders.

Assess readiness
There are eight main areas of readiness. The GCC and Egypt are at very different levels of
readiness in terms of accommodation, food and beverages, tours, and the other elements that
make a destination ready (see Exhibit 6).

EXHIBIT 6
The GCC and Egypt need to assess their state of tourism readiness based on quantity and quality of supply

Saudi
UAE Egypt Qatar Oman Kuwait Bahrain Arabia

ACCOMMODATION Variety, quality, and availability

FOOD
Variety, quality, and availability
AND BEVERAGES
TOUR SERVICES
Availability
AND ACTIVITIES
Quality and amount of tourism-specific talent,
HUMAN CAPITAL availability of training programs

Quality of airports and roads, traffic,

INFRASTRUCTURE availability of public transportation, and taxis
OTHER FORMS
OF READINESS

SECURITY Safety, security, and crime level

Health and hygiene, and quality of

HEALTHCARE
healthcare sector
Environmental sustainability and
ENVIRONMENT
pollution levels

Overall readiness

Readiness level: Low High

Source: World Travel & Tourism Council, “Global Talent Trends and Issues for the Travel & Tourism Sector” (2014); World Travel & Tourism Council and the World Economic Forum, “Travel
and Tourism competitiveness index,” 2017 and 2019 editions; World Travel & Tourism Council Data Gateway (https://tool.wttc.org/); national visions and plans; Abu Dhabi Tourism &
Culture Authority; Booking.com; TripAdvisor; Viator; Numbeo; Dubai Statistics Center; Visit Qatar; Statista; CEIC Data; Strategy& analysis

Strategy& | Destination Middle East 15

Accommodation, and food and beverages Some countries need to intensify their efforts in
these two aspects of readiness. For example, hotels and restaurants in Saudi Arabia and
Oman still have room for improvement. In particular, Oman lacks high-quality hotels and
restaurants despite its focus on luxury tourism. Egypt also needs to improve the overall quality
of these facilities.

Tour services and activities Tours and activities help visitors discover destinations, and are
vital for heritage and cultural offerings. Egypt, an established heritage and cultural destination,
offers 1.54 tours/activities per 1,000 travelers. The UAE similarly offers a large number of
activities when compared to other leading urban destinations such as Singapore. By contrast,
Bahrain and Saudi Arabia have only limited offerings of fewer than 0.02 tours per 1,000
inbound travelers.14

Human capital Qualified multilingual guides and personnel improve the traveler experience.
Qatar and the UAE have highly qualified staff with globally recognized, tourism-specific
certifications and accreditations. For example, the UAE offers the International Air Transport
Association diploma.15 Qatar has partnered with Stenden University in the Netherlands to train
and license tour guides.16 Other countries, however, have been struggling to recruit quality
staff consistently, although moves are afoot to improve skills.

Infrastructure Public transportation, taxis, ride-sharing platforms, and an efficient road

network allow convenient access to different destinations within a country. Across the region,
especially in Egypt and Kuwait, there is a lack of ground transportation, and road quality
needs to improve, in particular to relieve congestion. Public transportation beyond taxis is in
short supply, while taxi availability in Oman is insufficient.

Security, healthcare, and the environment The GCC countries are notable for their security.
They are improving their healthcare, which is often free to visitors who require emergency
treatment. Some GCC countries and Egypt need to improve their environmental practices, in
particular to reduce urban pollution.

16 Strategy& | Destination Middle East

Pay attention to the needs of target tourists
The second aspect of readiness is paying attention to the specific needs and preferences of
target tourists. Travelers from different source markets, or segments, value some aspects of
readiness more than others. For instance, in a 2019 survey, Chinese and French respondents
placed a premium on the affordability of accommodation and food offerings.17 They were
particularly sensitive to security when selecting their destination. By contrast, more than half
of Moroccans said they prize the quality of human capital and the ability to communicate
easily (see Exhibit 7).

EXHIBIT 7
Factors that increase travelers’ willingness to visit the GCC and Egypt
(percentage of survey respondents in each country)

MOROCCO CHINA FRANCE

Appealing tourism products 40% 47% 30%

Quality of accommodation
28% 27% 19%
and food and beverage outlets

Availability of tours and activities 21% 23% 14%

Affordability (accommodation, 24% 53% 41%

food and beverages, services)
Quality of human capital 56% 38% 21%
(e.g., English-speaking guides)

Selected by more than 30% of respondents

Note: Strategy& carried out a survey of 1,000 people in China, Morocco, and France asking which of these factors would increase their willingness to visit the Gulf Cooperation Council
countries and Egypt.
Source: Strategy& survey

The second aspect of readiness is paying attention to the specific

needs and preferences of target tourists. Travelers from different
source markets, or segments, value some aspects of readiness
more than others.

Strategy& | Destination Middle East 17

5. CONNECT THE TOURISTS

The fifth stage is to complete the tourism journey by bringing tourists to the country.
Successful tourism visions result in bookings and repeat visitors. Too often tourism strategies
around the world miss this vital stage.

The elements of this final stage of the journey are: marketing and promotion campaigns aimed
at target travelers in source markets, platforms that convert this interest into bookings, and
transport connections to the destination.

Targeted marketing and promotion

Carefully targeted marketing and promotion should raise awareness and interest in the
destination among sought-after travelers, and increase the likelihood that this interest results
in bookings. Countries should aim for specific segments using a mixture of traditional media,
sponsorship, and such digital channels as social networks and online travel agents (OTAs). A
country could showcase some of its most attractive tourism products on television channels
in source markets or event sponsorships and global trade fairs. More important, it needs to
focus on digital platforms as they are fast gaining in popularity.

Such targeted marketing and promotion is vital for Egypt and most GCC countries and cities,
apart from Dubai, as they do not show up in travelers’ searches for holidays (see Exhibit 8).
The goal must be to make themselves synonymous with the kind of tourism experiences their
target segments want.

18 Strategy& | Destination Middle East

EXHIBIT 8
Varying levels of interest in country and city destinations
Average frequency of searching for the destination over the previous year, maximum 100, as of October 31, 2019

Level of interest in country destinations

75
67 63 60

38
25
10 7 6 6 5 5

U.S. U.K. France Singapore Egypt China UAE Qatar Saudi Kuwait Bahrain Oman
Arabia

65 61 59 59
43

12
4 3 2 2 1
Las London Paris Dubai New York Abu Cairo Doha Jeddah Riyadh Muscat
Vegas Dhabi

Note: Computes a score out of 100 based on the frequency of searching for the destination on Google, under its travel category. According to Google, “Numbers represent search interest
relative to the highest point on the chart for the given region and time. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular. A score of
0 means there was not enough data for this term.”
Source: Google trends

Strategy& | Destination Middle East 19

Digital experiences are critical to communicating that the GCC and Egypt are the places to
which target tourists should travel. Some countries use apps that allow people to explore
a country’s offerings and activities, for example the TAGTHAi app (meaning “Greetings”)
launched by the government of Thailand.18 Virtual reality can also perform this role,
capturing the imagination and, at present, keeping travel dreams alive. The German town
of Herrenberg has developed a digital twin for potential travelers to visit virtually. Another
form of engagement and promotion is reviews on digital platforms. Indonesia partnered with
TripAdvisor to provide training to owners of tourism businesses so that they could manage
and boost ratings and reviews. The result was that review scores improved and previously
neglected sites became more popular.19

Some countries are transforming their national tourism websites into one-stop shops,
allowing users to explore offerings and book holidays. These are all the more powerful when
they provide the personalized recommendations that travelers now expect. For instance,
Singapore’s website features an interactive trip-building tool that helps users to identify
their preferred travel style. It then offers bookable itineraries based on which activities and
experiences they select. The site advises people interested in culinary tourism to try certain
restaurants or cooks, such as the pastry chef Janice Wong,20 while recommending specific
eco-tourism guides to those seeking adventure.21 Countries’ websites can also use virtual
concierge services and chatbots to recommend and book personalized offerings and activities
at the destination.

20 Strategy& | Destination Middle East

Improve distribution channels

Distributors in source markets help to promote destinations and push tourists to visit a
specific country or city. To do this, the GCC and Egypt need to create partnerships and
invest in their distribution channels. They should identify the right time to make acquisitions,
such as during the COVID-19 pandemic given the low prices caused by the travel recession.
Traditional travel agencies were still the largest distribution channel (see Exhibit 9). Such
traditional channels, with their high levels of customer service and frequent customer contact,
remain a preference for higher-paying or older visitors. Although online distribution channels
were already growing, the pandemic has accelerated adoption in a short time, disrupting the
traditional channels (see “Responding to crisis”).

EXHIBIT 9
Despite the growth of online channels, traditional channels remain dominant

Global travel distribution market total value (US$ billion)

2,895
4% Direct offline

2,438
7% 28% Direct online

1,983
23%
8%
17% Online travel agencies
21%
14%

13%

34% Travel agents, tour operators

40%
43%

16% 17% Travel management companies

16%

2013 2017 Pre-COVID-19

2020 forecast

Note: Percentages may not sum due to rounding.

Source: eDreams Odigeo, “Investor presentation,” April 2019; Phocuswright European Travel Overview Thirteenth Edition, December 2017

Strategy& | Destination Middle East 21

Responding to crisis
Governments might suddenly find themselves entrepreneurs on how best to mitigate the
facing a crisis, one that unexpectedly pandemic’s impact on tourism.22 Already, hotels
disrupts the sector, as has occurred during have adopted novel approaches to limit contact,
the COVID-19 pandemic. In these instances, including digital check-ins and virtual concierge
governments need to be agile and adapt services. All hospitality facilities have introduced
their strategies and plans to respond to advanced cleaning and sanitation processes.23
the immediate challenges. Case in point,
governments need to develop recovery plans Governments need to offer financial assistance
for the tourism sector in light of the pandemic, to stabilize the industry. Dedicated investments
covering the emerging challenges of health and can relieve pressure on small businesses,
safety, innovation, and financial assistance. increase their liquidity, and enhance
employment opportunities.
Health and safety are critical to restore
travelers’ confidence and ensure their well- Governments can also take advantage of
being. Until a vaccine is widely available, the crisis to reassess their positioning and
tourism destinations need high sanitation offerings in the global market. The GCC and
standards and protocols, including social Egypt should use the hiatus caused by the
distancing. They should strengthen their COVID-19 pandemic to institute short-term
healthcare capacity and deploy touchless changes, strengthen the tourism sector,
travel and tourism experiences. Governments catch up with more developed markets,
should also adapt their marketing campaigns and continue the tourism journey. The GCC
to communicate health and safety measures countries and Egypt can use this time to
to cautious travelers. Emirates Airlines has rethink their national tourism strategies and
launched the campaign “Dubai is Open” to aspirations, while adapting their plans to a new
inform people that it welcomes business and environment that involves stricter regulations
leisure visitors, while instituting health and and changing consumer preferences. They can
safety measures. reevaluate their customer base and offerings.
This is particularly useful for late entrants to
Governments should also integrate innovative mass tourism, such as Saudi Arabia, which
approaches to cope with the numerous can modernize their offerings, and test them in
restrictions and disruptions. The World Travel the domestic and regional market so that they
Organization has launched the “Healing are ready for international travelers once the
Solutions” initiative that gathers ideas from sector recovers.

22 Strategy& | Destination Middle East

There are three key distribution channels that provide an opportunity for governments,
whether directly or through their tourism entities, to strike partnerships or make acquisitions:

• Travel agents in key target markets Tourism entities can partner with or acquire
travel agents, operators, or airlines in target markets. An example is Tourism Australia,
which collaborates with more than 160 travel companies in its target markets, including
wholesale, retail, and online travel agencies. Emirates Group has acquired complete,
or partial, stakes in travel agencies, including online outlets, in target markets (such as
Travel Republic in Europe and Gold Medal Travel Group in the U.K.), and destination
management companies (such as Destination Asia).

• Online distributors Tourism entities can expand their distribution reach on online
platforms, mainly through partnering with online travel agencies. For example, both
Singapore and Hawaii in the U.S. have partnered with Expedia to develop microsites for
streamlined and innovative booking experiences.

• Domestic destination management companies (DMCs) Governments need to expand

their DMCs so that they can compete globally. In the short term, DMCs will need to ensure
coordination between the various local players to promote local tourism to domestic
tourists. An example is Dubai, which has consolidated all inventory onto such platforms as
Arabian Adventures and CitySightseeing Dubai.

Strengthen transport connections

Visitors need easy and affordable travel connections. Despite the short-term disruption
to global travel from the pandemic, the GCC countries and Egypt possess the long-term
advantage of being at a global crossroads — and from efforts in some of these countries to
develop aviation and aerospace industries. In 2019, Dubai International was the fourth busiest
airport in the world in terms of passenger numbers.24

Along with international connections, countries need to ensure there is convenient domestic
travel to major tourism sites. For example, visitors should be able to easily reach remote
attractions, such as Salalah in Oman or Al Ula in Saudi Arabia, which includes a UNESCO
World Heritage site.

Strategy& | Destination Middle East 23

 Digital is an absolute requirement that governments must
incorporate at every stage of their tourism journey.

24 Strategy& | Destination Middle East

DIGITIZE THE END-TO-END TOURISM JOURNEY

As governments follow this systematic approach, they need to be conscious that their
target tourists also have a parallel journey, one suffused with digital experiences. Digital is
an absolute requirement that governments must incorporate at every stage of their tourism
journey. The pandemic has reinforced the critical role of digital technologies, such as by
allowing for touchless, and so safer, travel (see Exhibit 10).

EXHIBIT 10
Technology is reshaping travelers’ experiences

Security
- Touchless travel: biometrics,
facial recognition,
E-documentation, virtual
Assessment of options scanning
- Personalization of - Enhanced safety: COVI-passes
recommendations: one stop for health authentication
shops, e-agents, chatbots, - Robot cleaners Destination arrivals
facial recognition - Automated public transport
- Digital hotel self-check-ins:
Book e-concierge, mobile key
Discover rooms
- Predictive analytics for
In-flight occupancy rates and
experience preferences
- Personalized Travel
interaction
Review

Discover
- Awareness campaigns:
mobile and social media
- Predictive analytics for
target travelers and
preferences Review
Visit - Insights generation: data
analytics, gamification,
Bookings artificial intelligence
- Streamlined
booking services Touristic experience
- Immersive experiences:
virtual and augmented
reality, 3D mapping,
artificial intelligence

Source: “Multi-National Travel Trends - A Global Look at the Motivations and Behaviors of Travelers,” Expedia Group media solutions
(https://tinyurl.com/yyojg5x7); “Understanding the journey of the connected consumer in leisure travel,” Facebook (https://tinyurl.com/y3qx3ebf)

Strategy& | Destination Middle East 25

 CONCLUSION

Tourism is an integral part of the economy in the GCC countries and Egypt. All these
countries need to act now to create a systematic tourism journey that will position them to
take advantage of the recovery in global tourism. As they build their sectors in response to
the target journey, they will develop renowned tourism destinations that will contribute to
sustainable growth and jobs.

26 Strategy& | Destination Middle East

ENDNOTES

1. The GCC countries are Bahrain, Kuwait, October 1, 2019 (https://tinyurl.com/

Oman, Qatar, Saudi Arabia, and the United yyc345wf).
Arab Emirates.
8. World Travel & Tourism Council, “WTTC
2. Euromonitor database, Visit Qatar, Bahrain and Saudi Commission for Tourism and
Tourism and Exhibition Authority, National National Heritage Announce Partnership
Center for Statistics and Information to Support Ambitious Plan to Welcome
Oman. Tourists to Saudi Arabia,” September 27,
2019 (https://tinyurl.com/y5tkaw62).
3. Euromonitor database, Visit Qatar, Bahrain
Tourism and Exhibition Authority, National 9. Euromonitor database.
Center for Statistics and Information
Oman. 10. Euromonitor database.

4. Euromonitor database (2013–2019). 11. World Travel & Tourism Council,

“Travel & Tourism: Global Economic
5. World Travel & Tourism Council, Impact & Trends,” June 2020 (https://
“Travel & Tourism: Global Economic wttc.org/Research/Economic-
Impact & Trends,” June 2020 (https:// Impact/moduleId/1445/itemId/91/
wttc.org/Research/Economic- controller/DownloadRequest/action/
Impact/moduleId/1445/itemId/91/ QuickDownload).
controller/DownloadRequest/action/
QuickDownload). 12. Linda Bethke, “The coronavirus crisis
has hit tourism in Malaysia hard,” DW,
6. World Economic Forum, “The Travel & May 11, 2020 (https://www.dw.com/en/
Tourism Competitiveness Index 2019: the-coronavirus-crisis-has-hit-tourism-in-
Travel & Tourism at a Tipping Point” malaysia-hard/a-53392776); Corinne Wan,
(https://reports.weforum.org/travel-and- “Malaysia puts bet on domestic tourism,
tourism-competitiveness-report-2019/ nature attractions tipped to do well,” WIT,
travel-tourism-at-a-tipping-point/). August 4, 2020 (https://www.webintravel.
com/malaysias-focus-on-domestic-
7. Vicky Karantzavelou, “Vision 2030 Plan tourism-will-pave-the-way-for-travel-
aims to make Saudi Arabia a top five recovery/).
global destination,” TravelDailyNews,

Strategy& | Destination Middle East 27

13. “What is sustainable tourism?” Northflash, 20. Singapore Tourism Board website (https://
December, 20, 2017 (https://northflash. www.visitsingapore.com/editorials/
com/what-is-sustainable-tourism/). singaporean-chefs-cooking-up-a-storm/).

14. Calculated using the tours and tickets 21. Singapore Tourism Board website
listed on Viator.com with traveler numbers (https://www.visitsingapore.com/see-do-
from Euromonitor database. singapore/explorers/).

15. International Air Transport Association, 22. UN World Tourism Organization, “Calling
“Dubai training center” (https://www. on innovators and entrepreneurs to
iata.org/en/training/courses/classroom- accelerate tourism recovery,” March 25,
training-centers/itc/dubai-training-center/). 2020 (https://www.unwto.org/calling-
on-innovators-and-entrepreneurs-to-
16. Saif al-Kuwari, “QTA, Stenden University accelerate-tourism-recovery).
join hands to train tour guides,” Gulf
Times, February 27, 2017 (https://www. 23. Drees & Sommer, “Preparing for
gulf-times.com/story/534574/QTA- Hospitality 2.0 in the post Covid-19 era,”
Stenden-University-join-hands-to-train- Hospitalitynet, May 4, 2020 (https://www.
tour-guides). hospitalitynet.org/news/4098465.html).

17. Strategy& survey. 24. Airports Council International, “Annual

World Airport Traffic Report, 2019” (https://
18. TAGTHAi app, Thai Digital Platform store.aci.aero/product/annual-world-
Social Enterprise Company (https://play. airport-traffic-report-2019/).
google.com/store/apps/details?id=com.
thaidigitalplatform.tagthai&hl=en_GB).

19. “Asia-Pacific Tourism 2019: Market Trends,

Opportunities and the Challenges Facing
Tourism Organizations,” Phocuswright,
March 2019 (https://www.phocuswright.
com/Free-Travel-Research/Asia-Pacific-
Tourism-2019).

28 Strategy& | Destination Middle East

Strategy&
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