1. The Tourism sector slipped to ~30% of Pre-Pandemic levels in 2020…

Its no surprise that the tourism sector was the most impacted due to the pandemic. Extended lockdowns, social distancing norms and economic downturns resulted in the market contracting to ~30% of pre pandemic levels in 2020. Among those still going on vacations, the average spends increased as these were the only vacations taken up in the whole year. Also, the people still going on such trips were the relatively well off sections of the society.

2. However, as vaccinations roll out and as consumers look to escape the lockdown fatigue, we expect a steady recovery going forward

Vaccination roll out in the region has been quick with UAE & KSA already having vaccinated majority of their populations. This has instilled a sense of comfort and security among people to move out. In our consumer interactions, consumers also expressed increased willingness for domestic travel. We already saw this play out as well last year when the number of internal tourists in the UAE more than doubled from May to October 2020, compared to the same period in the previous year.

Note(s): How do you expect your behaviour for following product/service categories once the country recovers from COVID-19 when compared with your behaviour in January/February in 2020

3. With marquee events lined up over the next few months in the region and a large focus to promote tourism…

The region is playing host to multiple global sporting events which are expected to attract a lot of tourist inflow. In addition, policies are also becoming favorable towards tourism inflow. The Saudi government for example has recently introduced a policy to promote tourism covering a wide array of investments, intended to significantly increase the contribution of tourism to economic output in the country.

Major Upcoming Events in the MENA Region

4. …we expect the sector to multiply 4x from 2020 levels to represent a USD 165 Bn market by 2025

This sector is ripe for a rebound in our view. As UAE and other countries open their borders to foreign tourists over the next few months in line with upcoming events, we expect a significant upsurge in tourist inflow. We could see some winners emerge in this space over the short to medium term.