Now accepting applications for Fast Company Middle East’s Best Workplaces For Women 2023. Click here to register.
In recent years, the MENA region has experienced a remarkable surge in its tourism sector, igniting a domino effect that has rippled through consumer spending and significantly bolstered its GDP.
According to the Mastercard Economics Institute (MEI), the UAE is poised for a consumer spending spree next year, fueled by a 5% growth forecast and a continued influx of European tourists.
This outpaces regional neighbors Saudi Arabia and Egypt, projected to increase 4.3% and 1.2%, respectively.
The Economic Outlook 2024 report says rising costs in the MENA regions will necessitate “crucial decisions” about spending and investment. However, it predicts that consumers won’t be entirely deterred.
“Even with inflation taking a larger chunk of spending on essentials, consumers will prioritize the discretionary spending that matters most, with travel, events, live concerts, and movies remaining popular choices,” the report said.
Gulf countries are expected to see a 22% jump in visitor spending this year compared to 2019, 26 percentage points higher than the global average. The MEI attributes this to the region’s aggressive tourism strategy, which has made it “one of the world’s fastest-growing destinations.”
The UAE, Turkey, Egypt, and Tunisia stole the show for European travelers in 2023, cracking the top 10 fastest-growing destinations compared to 2022.
Meanwhile, traditional European hotspots like Italy, Spain, Portugal, and Greece saw a decline in bookings over the same period. This trend, the report predicts, “is expected to accelerate in 2024.”
The report highlights the crucial role of diversification in bolstering the GCC’s economic future. Expansionary fiscal policies are key to propelling the non-oil economy through increased investment. This, in turn, will generate positive ripple effects, creating jobs and boosting domestic consumption.
“While a significant investment drive for more development through giga projects – large-scale and ambitious infrastructure or capital project investments- is underway in Saudi Arabia, the United Arab Emirates (UAE) seeks to maintain its position as the regional trade and investment hub,” says the report.
Loading the player...
CNN's Becky Anderson on the business of storytelling