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UAE tourism sector to reach pre-Covid-19 level in late 2021

Waheed Abbas/Dubai
Filed on July 3, 2020

(Reuters)

The GCC could lose up to $50.7 billion of its GDP due to the impact of the Coronavirus pandemic on tourism, while the UAE may lose up to $30.5 billion.

But the sector will reach a decent recovery in Q1 2021 and achieve pre-Covid-19 levels only in later part of 2021, say local and global tourism industry executives.

According to the UN Conference on Trade and Development's (UNCTAD) latest forecast, Gulf economies will take a hit of $26.8 billion to their GDP in case of moderate impact from Covid-19 and $38.7 billion loss if the impact is intermediate. But in the worst case scenario, the region will be hit with $50.6 billion losses.

The study has based its forecast on three scenarios - moderate, intermediate and dramatic. Moderate is equivalent to four months standstill of international tourism; Intermediate impact is equivalent to eight months while dramatic covers 12 months of standstill in international tourism.

For the UAE, the UN study forecast $10.2 billion impact if tourism sector takes a moderate hit, $20.3 billion for intermediate and $30.5 billion for dramatic. This will amount of between two to seven per cent of the country's GDP. Official figures showed that tourism sector contributed $45 billion, or 11.1 per cent, to UAE's $414.2 billion GDP in 2018.

Last week, Dubai announced that it will start receiving tourists from July 7 after over three months of ban on tourists following the outbreak of the pandemic.

Helal Saeed Almarri, director-general of Dubai Tourism, recently said in video message that since mid-May, Dubai has been opening gradually and all the landmarks are open now for tourists.

Pre-Covid-19 in late 2021

Asim Arshad, Group CEO of Orient Travel and Tours, said that the local inbound tourism sector reaching pre-Covid-19 level in 2020 is virtually impossible because there are still restrictions in place.

"It is impossible to reach pre-Covid-19 level in 2020. To reach that level, we need cure or vaccine for the virus. Of late, things are improving much faster than anticipated and we are getting a lot of requests and inquiries which is a very interesting because the UAE has done so much to prevent virus that it is much safer destination," said Arshad.

With restrictions surrounding social distance in place in busses and hotels, it will be more of private tourism rather than mass tourism.

"Even if local tourism sector reaches pre-Covid level in late 2021 is interesting enough as it will be coinciding with Expo 2020. There is a possibility that incremental incentivized business will be able to give us essentials," he added.

Avinash Adnani, managing director of Pluto Travels, believes that the local tourism sector will start picking up in October 2020 and reach decent level in March 2021.

"I think pre-Covid-19 level will be reached next October because even if people feel safer, they should have the money to travel following massive job losses. Reaching pre-Covid-19 level will not be decided only by safety but affordability also. 2021-end will be good for tourism and 2022 will be booming - not before that," said Adnani.

waheedabbas@khaleejtimes.com


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