The State of Middle East Outbound Travel 2019

by Meghan Carty + Skift Team - Dec 2019

Skift Research Take

Outbound travel from the Middle East hasn’t garnered the attention of some other outbound markets, but given the high travel expenditure and growth of the region, we think this is one that’s worth paying attention to.

Report Overview

The Middle East region might not be experiencing huge booms in outbound travel like China or India, but this doesn’t mean the region should be overlooked. Outbound travel from the countries in the region has been steadily increasing overall, along with their expenditure which is among the highest in the world per trip. Middle Eastern travelers travel for long periods of time and spend a lot of money. It’s time for the travel industry to start to pay attention to this region.



In this report, we provide a closer look at the Middle East outbound travel market, with a special focus on the Gulf Cooperation Council (GCC) countries. First, we give an overview of the market by the numbers, as they stand today and where they’re heading in the future. Then we examine the key factors that are driving outbound travel from the region. Next, we look at the behaviors and preferences of Middle Eastern consumers and travelers, starting with those that are technology related, and then zooming into travel-specific trends, including booking behaviors, destination preferences, and the impact of religion on travel. Finally, we provide examples of travel brands and destinations around the world that are putting initiatives in place in an effort to attract travelers from the Middle East.

What You'll Learn From This Report

  • Market size and expenditures of Middle Eastern outbound travelers, by core market
  • Key factors driving outbound travel from the Middle East
  • Behaviors and preferences related to technology and social media among Middle Easterners that are shaping the way they travel
  • Trends in the travel behavior and preferences of Middle Eastern travelers, from booking preferences to destination preferences
  • How global travel brands and destinations are taking steps to better cater to travelers from this region

Executives Interviewed

  • Joe Naaman - Executive Vice President of Strategy, Twenty31 Consulting Inc.
  • Reem El Shafaki - Senior Associate, Muslim Lifestyle Markets, DinarStandard

Regional Context

The Middle East is a complex region that encompasses countries at various levels of economic development and political stability. There is some debate about which countries are included in the region, but it is most often considered to include the following 16: Bahrain, Cyprus, Egypt, Iraq, Iran, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, the United Arab Emirates, and Yemen.

Within the region, the smaller subsection known as the Gulf Cooperation Council (GCC) includes some of its most developed and prosperous countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). The GCC is an intergovernmental economic and political union with its members all being monarchies and largely oil-and-gas-based economies. Because of their relative stability and wealth, much of the international travelers and outbound travel expenditures from the Middle East come from the GCC countries. For this reason, we will pay special attention to the GCC countries in this report. Other Middle Eastern countries, like Syria and Yemen, will be largely disregarded because of the unique and unfortunate political situations and conflicts they are currently dealing with which heavily impact their outbound travel capabilities, in addition to the availability of data concerning their travel habits.


The Market by the Numbers

Over the past few decades, the economy of the Middle East has been closely tied to its oil production and global oil prices. This has meant periods of tremendous growth and others of decline. Additionally, it has resulted in a widening gap between countries in the region, mainly based on their levels of oil production, with the GCC countries and a few others surging ahead and others falling behind.

The pattern of outbound tourism from the region’s countries reflects some of this volatility, but overall, shows a clear increasing trend. According to Skift Research’s analysis of data available from the World Bank, Middle Easterners took about 71 million trips outside of their own countries in 2017, the last year for which data is available, compared to 16.5 million in 1997. Because of a lack of relevant data for some countries, these numbers are likely low estimations, but they still illustrate how the market has grown over the last two decades, with especially strong growth starting in 2008.

 

Exhibit 1: Outbound travel from Middle East countries has clearly grown over the last 20 years, with especially high levels of growth beginning in 2008.

Notes: Outbound trips refers to trips outside of the traveler’s home country. Outbound departure data is not available for all countries in the region for each year. The data above includes what is currently available. The 2017 estimate does not include Bahrain, Iraq, Lebanon, Syria, or Yemen. Due to their small outbound travel markets, the omission of these countries has a negligible impact on the total outbound departures for the region.

Within the region, a handful of countries are responsible for the majority of the total outbound trips of the entire region. The top four countries in terms of the number of outbound departures are Saudi Arabia, Iran, Turkey, and Israel. Together, these accounted for 68% of all the region’s outbound trips, and Saudi Arabia alone accounted for 30% in 2017.

 

Exhibit 2: The top four countries accounted for 68% of the region’s total outbound trips in 2017.

 

We expect to see continued strong growth of outbound travel in the region. Population and economic growth are the biggest drivers of travel output. As we showed in our Global Travel Economics 2019–2029 report, the Middle East and Africa together will have the fastest growing populations over the next decade, with half of all births worldwide expected to occur in this region. During this time period, the population in Africa and the Middle East is expected to grow more than twice as fast as the rest of the world, with a 2.2% compound annual growth rate versus 0.6% across all other regions.

While the highest levels of population growth will be observed in Africa, the Middle East’s relative wealth and the existing maturity of its travel market will help propel outbound tourism forward in the region. Based on our analysis of a number of data sources, we anticipate significant growth in the Middle East’s largest outbound travel markets over the next decade, with the number of trips more than doubling in 2029 in Saudi Arabia, Iran, and Egypt over the 2017 numbers.

 

Exhibit 3: Actual and estimated outbound trips by country, 2017–2029, in millions of departures.

Note: These countries are those for which relevant data to make forecasts is available. Sufficient data is not available to make 2029 estimates for Oman, Jordan, or Cyprus.

Outbound Travel Expenditure

Aside from the growing number of outbound travelers from the Middle East, the region’s high expenditure should also make it especially attractive to travel brands and destinations. The overall international tourism expenditures by Middle Eastern countries has been increasing over the last 20 years or so, according to data from the World Bank and Skift Research estimates. With the growing population of the region and increasing wealth of its major travel markets, we can expect that an increasing trend will continue.

 

Exhibit 4: Over the last 20 years, outbound tourism expenditure by Middle East travelers has increased steadily.

Note: Certain years include international expenditure data for all 16 Middle East countries, but some are incomplete. The totals for the region in the chart above account for all countries for which data is currently available and estimates where possible.

Other than Saudi Arabia, which maintains its position in the top spot, the other three countries with the highest outbound travel expenditure are not the same as those with the highest number of outbound trips. Rather, the second through fourth spots are taken by GCC countries: UAE, Kuwait, and Qatar. Combined with Saudi Arabia, travelers from these four countries contribute 57% of the total international spending of the region.

 

Exhibit 5: The top spending outbound travel markets in the Middle East are GCC countries.

 

A historical look shows that Saudi Arabia has long maintained the top spot, but while it has experienced quite a lot of volatility between 2007 and 2017, the other three nations have been steadily increasing their international travel expenditures.

 

Exhibit 6: The GCC countries Saudi Arabia, UAE, Kuwait, and Qatar had the highest outbound travel expenditures in 2017.

 

According to a 2018 report from the World Tourism Organization (UNWTO) and the European Travel Commission (ETC), per-capita international tourism spending by travelers from the GCC was 6.5 times higher than the global average in 2017. Because of their relatively high travel expenditures, the GCC countries are especially important to the Middle East outbound travel market.

 

Exhibit 7: The six countries of the GCC account for the majority of outbound travel spending in the Middle East.

 

DinarStandard, a growth strategy research and advisory firm, analyzed 192 countries for its recent State of the Global Islamic Economy Report 2019/20 in partnership with the Dubai Islamic Economy Development Centre and Salaam Gateway. According to its analysis, the top four Muslim outbound markets in 2018 in terms of expenditure are also the highest in the region overall. The World Bank has yet to release data for 2018, but DinarStandard’s analysis estimates that in that year, Saudi Arabians spent $22 billion, the UAE $17 billion; Qatar outspent Kuwait with $15 billion to its $12 billion on outbound travel.

Per-Trip Outbound Travel Expenditure

Because of the high wealth of the region, per-trip expenditures for Middle East travelers is on the higher end compared to the other countries and regions. In 2017, the average spend per outbound departure was $1,551, higher than the UK and Germany, two high-spending outbound markets globally.

 

Exhibit 8: The average spend per outbound departure for the Middle Eastern travelers is relatively high.

 

Delving into the country level, travelers from three of the GCC countries spent over $3,000 per outbound trip on average in 2017. By comparison, the number for U.S. was only $1,900 for the year.

 

Exhibit 9: Qatar, the UAE, and Kuwait all have per-departure outbound trip expenditures of over $3,000.

 

Some destination marketing organizations (DMOs) have found similar trends when Middle East travelers visit their destinations. Data from VisitBritain, for example, reveals that Middle Eastern travelers in the UK spent an average of $2,040 per visit, compared to $1,579 for travelers from Asia, and $1,091 for North American travelers.

 

Exhibit 10: Compared to other high-spending regions, Middle Eastern travelers to the UK spend the most per visit.

 

Looking at the top spending countries from each of these regions (or each country, in the case of North America), we again see the dominance of the Middle East from a spending perspective. The four high-spending GCC countries we discussed previously also exhibit very high per-visit spending, as VisitBritain’s data reveals, with Kuwait and Saudi Arabia showing especially high expenditures.

 

Exhibit 11: Of the UK’s top-spending inbound markets in the Middle East, North America, and Asia, four of the top five highest per-visit spenders are Middle Eastern nations.

 


Key Factors Driving Outbound Travel From the Market

There are several key factors that are combining to drive the growth of the Middle East’s outbound travel market. In this section, we will cover a few of the main factors.

A Young Population

In addition to its quickly growing population, the Middle East also has a young population. According to the Central Intelligence Agency’s World Factbook, the average age in the Middle East in 2018 was 28.8 years old, while Asia’s was 30.8, North America’s 38.6, and Europe’s 41.5. This means that the region is set to have a huge workforce for the foreseeable future, which translates to individuals with disposable income.

Younger people are already making up the majority of the traveling population in the Middle East. According to a 2018 study by Amadeus and InsightOut Consultancy, 75% of travelers from the Middle East are between the ages of 21 and 40. This young population of travelers has a lot of bearing on travel trends for the region, and will dictate where its outbound market is headed, since younger travelers have different preferences and behaviors from their older counterparts.

 

Expansion of and Strategic Position for Air Travel

The geographic position of the Middle East has made it an incredibly important region for air travel, as it easily connects “East” to “West.” Dubai has become an especially important air travel hub. According to PwC and Boeing, the UAE is within a four-hour flight of 40% of the world’s population and within eight hours of 80%. This has made the country a key connecting airport for the world’s travelers, and the growth of its aviation industry that has resulted from this status is also helping to drive outbound travel from the region.

The larger, long-haul airlines of the region (the ‘big three’ are Emirates, Etihad Airways, and Qatar Airways) rose quickly to prominence just over a decade ago. Boston Consulting Group wrote a report in 2006 titled “The Rise of Middle Eastern Carriers,” which indicates that airlines from this region had been the fastest-growing long-haul carriers that year and the few years prior. Emirates, it reported, had grown more than 20% over the decade prior to that, and the report expected that the region’s carriers would be responsible for “nearly a quarter of all global long-haul aircraft orders over the next decade.”

However, these airlines have been facing some headwinds recently. Etihad has faced structural and financial issues over the last year, and Qatar was impacted by the 2018 Saudi-led blockade of its home country. Still, they continue to grow, albeit at a slower rate than in the past. IATA reported that traffic growth on the region’s carriers slowed recently to a 2.9% increase in August 2019, whereas in recent years it was up to double-digit growth numbers. Even so, the region’s airline executives are optimistic due to strong travel demand.

While growth of the full-service, long-haul airlines may have begun to slow, low-cost carriers (LCCs) in the region have picked up some of the slack. LCCs began rapidly expanding in the region in about 2013. According to research by Amadeus, regional LCCs increased their capacity by 17.7% (2 million seats) between June 2012 and June 2013, putting them second only behind Asia, which increased capacity 28.7% (The Middle East is typically considered a part of Asia. In this context Asia includes only East Asia, South Asia, and Southeast Asia). And according to Etihad Aviation Group and low-cost carrier Air Arabia, LCCs contributed to 17% of seat capacity in and out of the Middle East in 2018, compared to 8% in 2009.

The growth of lower-cost air travel indicates somewhat of a democratization of travel in the region and is a promising sign for further growth of its outbound travel market, especially when it comes to intra-regional outbound travel. Some airlines have recently put bets on this market. Etihad Aviation Group has partnered with existing LCC Air Arabia (based in Sharjah, UAE) to launch a new Dubai-based LCC, Air Arabia Abu Dhabi, sometime in the first half of 2020. This will become the fifth airline operating from the UAE. And, in late November 2019, India’s SpiceJet confirmed that it would start operations between India and Ras Al Khaimah in the UAE in 2020, and will later establish a new airline that will be based there.

 

Powerful and Increasingly Available Passports

When it comes to international travel, the power and availability of a country’s passport play important roles. The countries of the Middle East vary greatly in terms of the power of their passports. According to Passport Index, a website empowered by Arton Capital that provides real-time global rankings of 199 countries’ and territories’ passports, the countries of the Middle East vary in ranking from the UAE, which has the world’s most powerful passport, to Iraq, which is ranked 89th out of 90 (many countries have the same ranking as one another, which accounts for the current ranking being out of 90).

These rankings are based upon each country’s Visa-Free Score (VFS), which combines the number of countries for which the passport allows visa-free entry or visa on arrival. At the time of this writing, the UAE has a VFS of 178, with 118 countries that allow visa-free entry for UAE passport holders and 60 that allow visa on arrival, leaving only 20 countries/territories for which a visa must be obtained prior to arrival. The UAE’s passport is far and away the most powerful in the region, with Kuwait and Qatar having the next highest ranking at 42nd. That ranking might not sound too impressive, but consider the fact that China, with its almighty outbound travel market, is currently ranked 57th. We can expect that as the Middle East market continues to develop from the driving factors we’ve discussed, the region’s passports will also grow in power, facilitating international travel even more.

 

Exhibit 12: The power of the Middle East’s passports varies widely, but overall, the main markets are relatively powerful.

 

In addition to having relatively powerful passports, passports in some Middle Eastern countries are also becoming easier to access. A major example of this just occurred in August 2019, when a ban was lifted that prevented women of any age and men under the age of 21 to travel internationally without the permission of a male guardian. This change will, in effect, allow women 21 or older to apply for their own passports and travel independently. As we discussed previously, the Saudi Arabian outbound travel market is already a force in the region that is expected to continue its growth over the next decade. This change has the potential to spur it even more.

 

Relaxed Restrictions Related to Religious Pilgrimages

According to Pew Research, 91% of the Middle East and North Africa’s population was Muslim in 2010 and the total Muslim population is slated to grow twice as fast as the overall world population between 2015 and 2060. The global Muslim community undertakes two pilgrimages to the holy cities and mosques of Makkah and Medinah, which are both located in Saudi Arabia. These pilgrimages are called Umrah, which is a highly recommended trip that can be completed at any time of the year, and the Hajj, which is an annual compulsory trip, as one of the five pillars of Islam to be carried out at least once in a Muslim person’s life.

In recent years, the Saudi monarchy has made it easier for Muslims to complete these trips. For example, Umrah used to be restricted to only a short time period of the year, but the Kingdom has been expanding the window over the last couple years. Additionally, those who want to participate in the Umrah no longer need a specialized Umrah visa.

The monarchy is also taking steps to expand the holy mosques, and this is a key part of its Saudi Vision 2030 plan. So far, these efforts have resulted in tripling the number of foreign Umrah visitors from 2005 to 2015, when a high of 8 million entered the country. Since that peak, pilgrim visits have leveled off, but still remain important. As of August 2019, more than 2.4 million Umrah pilgrims visited Saudi Arabia, and 1.8 million international visitors came during the 2019 Hajj season.

The Ministry of Hajj and Umrah has also recently signed memorandums of understanding with online booking companies like Agoda and Umrahme.com to broaden access to booking pilgrimage trips.

While not all Umrah and Hajj visitors come from other Middle Eastern countries, the easing of restrictions on these pilgrimages, will still help to drive a notable amount of intra-regional travel.

 

Key Challenges for the Market

There are many signs that the outbound travel market from the Middle East will continue its steady growth. However, there are some challenges that the region will need to overcome in order to make this a reality.

One of the biggest challenges is presented by the regional economy’s dependence on oil and gas. The region’s (and especially the GCC’s) economy, and the wealth of its population, is tied to its oil and gas market, and this has a direct impact on its travel industry. Joe Naaman, executive vice president of strategy at travel and tourism consulting company Twenty31 explained that “unless the Middle Eastern market really commits to diversifying its economies and if they continue to be reliant on oil and gas as we — as the rest of the world moves away from oil and gas — they’re going to face some major challenges in terms of, wealth of a nation and wealth of the population as well. And with decreased wealth … there’s a decreased opportunity for travel.”

Reem El Shafaki, senior associate, Muslim lifestlyle markets at DinarStandard echoed this as the biggest potential challenge she could foresee for the market: “I would say right now they have much higher incomes than your everyday traveler. They are able to spend more. I would say if they don’t continue to have this income, that will definitely be a big challenge.”

The economy also has a strong bearing on the expat population living in the Middle East, especially in countries like the UAE, the population of which is currently about 80% expats, and Saudi Arabia, which is about one-third expats. As Naaman of Twenty31 explained, “when the economy is doing well, you have a lot of expats in the Middle East because the local governments and companies can afford to have them … And actually the trend that we’ve seen over the last couple of years, since the price of oil started to go down in late 2014, is that there has been a pretty drastic decrease in the number of expats living in the Middle East.” If the population of expats decreases, then the population of outbound travelers also decreases, which could stunt the market’s growth moving forward.

In an effort to keep these things from happening, many countries of the Middle East have laid out strategic plans with a strong emphasis on diversifying their economies beyond oil and gas. Saudi Arabia, for example, revealed its Vision 2030 plan in 2016. Many of the goals throughout the plan revolved around the idea of economic diversification and taking gradual steps away from oil. In Crown Prince Mohammad bin Salman’s introduction to the plan, he wrote: “We are determined to reinforce and diversify the capabilities of our economy, turning our key strengths into enabling tools for a fully diversified future.” Other countries have similar plans, like Kuwait’s Vision 2035, Bahrain’s Economic Vision 2030, and Oman’s Vision 2040.

Other than the potential economic challenges, the region will also likely continue to face political and social issues that could have impacts on the outbound travel market. Conflicts in the region have in recent years had negative effects on its air travel, with multiple areas where air traffic has been banned or cautioned against flying. The Federal Aviation Administration (FAA) banned U.S. airlines from flying above parts of the Gulf of Oman and Persian Gulf after Iran shot down an American surveillance drone in June 2019. Flights between Amsterdam and New Delhi were rerouted to avoid flying over Pakistan earlier this year due to its conflict with India, and flying over Syria has been largely avoided in recent years due to the catastrophic conflict there. With situations like these, additional miles need to be flown, which increase operational costs, and therefore may impact an airline’s bottom line and ability to expand service within the region.


Understanding Middle Eastern Travelers

Technology Usage and Preferences

Technology use in the Middle East varies by the development and stability level of each country. As most of the outbound travelers from the Middle East come from the more wealthy and stable countries (like the GCC countries), they also tend to be highly connected individuals. Individuals in this market have developed their own unique habits and preferences. As the market grows, it’s important to understand the technology use landscape in the country in order to best reach its outbound travelers.

 

Internet Penetration and Mobile Use

Internet penetration, or the percentage of the population using the internet, across the Middle East varies by country. Most countries in the region have at least half of their populations online, and half of them have 80% or more online. The GCC countries dominate, with the five highest internet penetration rates in the region, which are also some of the highest rates in the world.

 

Exhibit 13: The GCC countries have near universal internet penetration.

 

Mobile use is also quite high in the GCC countries. According to a report by GSMA, the trade body that represents the interests of mobile network operators worldwide, on average 77% of the population in the GCC states were mobile subscribers in 2017, with Bahrain, Qatar, and the UAE having 80% or higher mobile penetration, compared to the global average of 71%.

 

Social Media Use and Preferences

With such high internet and mobile penetration in much of the region, much of the Middle East also has heavy social media usage. In their report Digital 2019, We Are Social and Hootsuite indicate that six of the countries in the Middle East (Kuwait, Qatar, UAE, Israel, Cyprus, and Bahrain) land in the top 20 countries in the world in social media penetration of their populations over the age of 13, all with over 97% in January 2019.

 

Exhibit 14: Six Middle Eastern countries have social media penetration at rates of 97% and above, landing them in the top 20 in the world.

Note: These penetration rates consider the total social media eligible population in each country, which includes those over the age of 13.

While the overall social media usage is high and most of the social media sites used in the region are global platforms, there are country variations in site preference. Northwestern University in Qatar has conducted an annual survey called Media Use in the Middle East every year since 2013. The latest iteration of the survey, given in 2018, gives an in-depth look at social media habits in six Middle Eastern countries and one North African country (Please note that we have excluded Tunisia from our analysis below in order to focus only on the Middle East as we define the region in this report).

The data shows the dominance of WhatsApp in the region, with close to 80% or more using the platform in all of the surveyed countries except for Egypt. Facebook, YouTube, Twitter, and Snapchat are popular in some countries, but not in others.

 

Exhibit 15: WhatsApp is highly used in the Middle East, while Facebook and YouTube are very popular in some countries.

 

WhatsApp’s dominance in the region is striking. And while the platform’s main function for most users is for direct messaging, it is commonly used for other reasons that are more akin to other social media platforms, like discovering and sharing news and entertainment content.

 

Exhibit 16: WhatsApp is most commonly used as a messaging platform, but is also used in ways similar to other social media platforms

 

YouTube also stands out for its relatively high usage in some Middle Eastern countries. According to Think with Google, Saudi Arabia is the biggest user of YouTube per capita in the world, and in this country and the UAE, 68% of Millennials consume more digital video than they do on TV. Overall, Think with Google reports 60% of YouTube viewers in the Middle East and North Africa are Millennials, which makes them the second largest YouTube viewing audience after the U.S. based on time spent watching videos on the platform.

YouTube, like WhatsApp, is used by Middle Eastern users for more than its main functionality (i.e., to watch video content). According to the survey by Northwestern University in Qatar, it is also used to communicate with individuals, as well as for finding and sharing content. YouTube users in Saudi Arabia show especially varied reasons for use of the platform, such as direct communication with individuals.

 

Exhibit 17: YouTube users in the Middle East use the platform for reasons beyond finding and consuming content.

 

Travel Behaviors, Preferences, and Market Trends

The technology usage and preferences of Middle Eastern travelers (and those who might be travelers in the coming years) can help us understand how they interact with the travel industry, and how the travel industry can reach them. In this section, we will zoom in more on travel specific behaviors, preferences, and market trends. As we pointed out before, the Middle East is made up of countries that are quite different from one another in some cases, with a few countries contributing the bulk of the region’s outbound travelers. Because of this, the behaviors, preferences, and trends we will discuss here apply to the major outbound travel markets that we have focused on throughout the report so far.

 

There Are Two Main Groups of Middle Eastern Travelers

Most travelers from the Middle East, and especially its main outbound markets, fall into two main groups. The first are high-net-worth individuals. The members of this group are nationals of primarily Saudi Arabia or the UAE, and Kuwait and Qatar to a smaller extent. They are avid travelers, who take long-haul, long-duration trips and they have money to go far from home and expect luxury throughout the journey.

The second group is the expats in the region. As we mentioned before, the UAE’s population is about 80% expats, and Kuwait and Qatar show a similar proportion. Bahrain is over 50% expats and Saudi Arabia is about 30%. Naaman of Twenty31 Consulting explains that “a big chunk of those non-locals are migrant workers and even though they travel back home perhaps once a year, they aren’t really considered travelers otherwise.” The rest, however, who “primarily come from the U.S., from England, from Germany, from France, from Australia” and live in the Middle Eastern countries just mentioned. Most members of this group may not have the level of wealth as the first group, but they have the resources to travel outside of the region at least one time per year for a trip that is not back to their home countries. Due to their shared region of residence, they have some traits in common with the first group, but also have some of their own behaviors and preferences.

Travel companies and destinations that are looking to appeal to travelers from the Middle East should bear these two groups in mind. Leona Reed, associate vice president of global marketing for Visit California told Skift earlier this year that the destination marketing organization (DMO) put two Middle East strategies in place to compensate for the differences between the two groups: “These differences mean dual strategies will run concurrently in each market, one aimed at expats and one at natives.”

In the main travel markets of the Middle East, particularly the GCC, the middle class does not exist as it does in some other regions of the world. Therefore, while the explosion of middle-class populations are driving outbound travel in places like China and India, this is not much of a factor in the Middle East. Naaman of Twenty31 forecasts that if the region’s diversification strategies are successful, “in the next 20 years, I think we can start to expect to see that middle class grow a bit faster.” So while the middle-class is negligible when it comes to Middle East outbound travel today, it might become an important group to consider in the future.

 

Middle Eastern Travelers Take A Few Long Trips Each Year

In general, Middle Eastern travelers, particularly those from the GCC, travel for long periods of time, at least a few times a year. The high-net-worth individuals tend to take more trips per year on average compared to expats. Naaman of Twenty31 Consulting explained that from his company’s research, they have found that members of the former group are heavy travelers, taking about eight to 10 weeks per year to travel and during this time, they take about two to four trips. This means that the trips they take are long in duration: “It wouldn’t be unheard of for the more wealthy ones to charter flights to Europe and they’ll go spend a month or a month plus in places like the UK, France, Germany, Spain, or Italy.” These trips take place almost entirely in the summer, in order to escape the oppressive heat of the Middle East.

Expat travelers, on the other hand, travel a bit less often, with an average of 3 trips per year (two of which are long-haul trips, and the one a short, intra-region trip). These trips are often in the summer, but could also take place in the winter, and according to Naaman, one of the long trips is almost definitely back to their home countries.

For both groups, trip duration of the long-haul trips tends to be long. Three of four of the UK’s main source markets in the Middle East had average lengths of stay longer than 14 nights in 2018 (compared to 7.5 nights for the U.S.). And according to the U.S. Department of Commerce, travelers from the GCC spend an average of 28 days in the U.S. when they visit.

 

Exhibit 18: Of the UK’s main source markets in the Middle East, three out of four had average lengths of stay of longer than 14 nights in 2018.

 

Offline Booking Is Still Prevalent, But Online Is Growing

Booking travel through offline means is still very common in the Middle East overall. According to Amadeus, 67% of the region’s travel bookings take place offline, although the large majority of travelers go online before booking to do some searching and planning.

Offline booking is especially common among the high-net-worth individuals. As Naaman explained, “they are not themselves going onto OTAs or walking into the travel agent and booking their trips … they have usually dedicated representative travel agents that they work with that will help book the entire experience for them.” Travelers from this group are also more likely to travel as part of large family groups (which we talk about next). According to El Shafaki of DinarStandard, this often pushes them to book with travel agents, as opposed to booking themselves online “because OTAs sometimes don’t accommodate for large groups.”

However, with the main outbound countries having such high levels of internet and mobile penetration and social media use, especially among the large, young population, it’s no surprise that online travel in the Middle East is growing in prominence. There are currently 40 regionally based online travel agencies (OTAs) serving the Middle East, compared to just five in 2013. MENA Research Partners estimates that the online travel market for the Gulf region alone will reach $15 billion by 2023, which will be 140% growth from current levels. This translates to 20% annual growth from 2019 to 2023, compared to 4% for the conventional travel market in the region.

 

Family Travel Is Most Common, Including Multi-Family and Multigenerational

Middle Eastern travelers most commonly travel with their families. GlobalData found that in 2017, 73% of outbound trips taken by Saudi Arabians were taken by families (rather than solo, couples, or group trips). This is compared to the global average of 31%. Beyond their propensity to travel with their families, something that makes Middle Eastern travelers stand out is the size of the family groups they tend to travel in. According to the report by Amadeus and InsightOut Consultancy, it’s common for Middle Eastern travelers to travel in groups of two or three families together, including multiple generations. And with 33% of Middle Eastern households (and three-quarters of those in GCC countries) having five or more people, these groups can be quite large.

For the high-net-worth travelers, these large groups might include family, friends, and household staff; their “entourage,” as Naaman phrased it. For this reason, El Shafaki points out that there’s “a big need” for this market to easily find “hotels that [can] accommodate large families with suites and different rooms.”

 

Nature and Weather Are Key Destination Characteristics, But Airline Connectivity Can Be Crucial

Because of the region’s strong airlines and connectedness, Middle Eastern travelers quite often travel outside of their home countries and even out of the region. According to a 2018 study by Ipsos, 65% of Saudi travelers travel internationally, and five out of 10 of the top countries traveled to for leisure and six out of 10 of the top traveled to for business are outside of the region.

Amadeus and InsightOut Consultancy reported in 2018 that 64% of Middle Eastern travelers traveled outside of the region in the past 12 months. And traveling outside of the region is especially common among the two main traveler groups that we’ve discussed, who have the time and resources to do so.

When they travel outside of the region, Middle Eastern travelers most commonly travel to Europe and Asia. As mentioned before, traveling in the summer is most common in order to escape the intense desert heat of the Middle East. The most commonly selected destination then are those that can offer somewhat of a reprieve from that, while also offering lusher, natural landscapes. The UK, Germany, and France are top destination choices.

Aside from destinations like those, which are commonly selected by travelers from a variety of source markets, Middle Eastern travelers have some more unique destination preferences as well. Bosnia and Herzenogovnia, for example, is surging in popularity among travelers from the GCC. DinarStandard’s El Shafaki posits that one of the reasons “it’s appealing to GCC travelers [is] because of its beautiful nature. The GCC weather, it’s quite hot and they don’t have lush scenery there, and so that’s something they find in Bosnia.”

According to the UNWTO’s Yearbook of Tourism Statistics 2018, Bosnia and Herznogovnia experienced a 61% increase in inbound tourists from the Middle East (data includes only Egypt, Kuwait, and Saudi Arabia) from 2015 to 2016, the latest data that is available. Over 33,000 tourists visited Bosnia and Herznogovnia from these three countries in 2016 compared to only 1,700 in 2012. And according to hotel data from the Sarajevo tourist board, 13,000 visitors from the UAE visited the country in the first seven months of 2016, while only 65 total visited in 2010.

Nature and more mild weather are not quite enough to account for a surge like this on their own. Air travel connectivity is also crucial. The Middle East has some well connected hubs and strong long-haul airlines and where they fly directly has a strong bearing on where the region’s travelers select to venture.

For the remaining travel companies and destinations that are not easily accessible, it will be difficult to attract this market. Naaman explained, “So companies and organizations … should completely be aware of where the destinations are that the airlines are traveling to. And if your company or organization is not in one of those destinations, then it’s going to be extremely challenging for you.”

This doesn’t mean that all hope is lost however, as new connections and partnerships are being formed all the time to compensate. In October 2019, Qatar Airways formed a code-sharing partnership with LATAM Airlines in order to increase accessibility destinations in South America, and in December 2019, Emirates announced a partnership with Interjet Airlines to facilitate connections to Mexico City and other destinations in Mexico.

The Maldives offers another case study of a destination that has greatly benefited from strong airline connections from the Middle East. Due to easy and frequent flights, as well as relaxed visa policies, the island nation saw 5.9% growth in tourism from the Middle East in 2018 over 2017, and had already seen more visitors in the first six months of 2019 than in the whole of 2018 (27,679 versus 23,130).

 

For Middle Eastern Travelers, Religion Must Be Taken Into Account

As noted earlier, over 90% of the Middle East population is Muslim and the religion is growing quickly around the globe. According to the 2019/20 edition of the State of the Global Islamic Economy Report by DinarStandard in partnership with Dubai Islamic Economy Development Centre and Salaam Gateway, Muslim travelers spent $189 billion on travel in 2018 (equal to 12% of global travel spend) and this is expected to reach $274 billion by 2024.

That the overwhelming majority of travelers from the Middle East are Muslim has a heavy bearing on their travel preferences and behaviors, aside from driving travel for religious reasons, like the pilgrimages we mentioned before. Reem El Shafaki shared results of a survey of Muslim travelers (39% of whom were from the Middle East) which DinarStandard performed for COMCEC. According to this survey, 84% of respondents said they research whether a travel destination will fulfill their religious needs. This could include halal food options, spaces for prayer, and separate spas and pools for women and men.

Not all Muslims abide by such rules or to the same degree. For example, only 28% of respondents surveyed by Amadeus and InsightOut Consultancy said that the availability of halal, vegetarian, or vegan food was a criteria for them in selecting a destination. Visit California, however, did their own research and found that for the travelers it is looking to attract from the GCC, the availability and clarity of halal food is critical.

For travelers like these and others who are very observant, religious rules can be crucial to their travel decisions. These travelers often prefer to travel to countries that have large Muslim populations, and this holds true for those from the Middle East as well. Bosnia and Herzegovina, for example, in addition to its lush nature and more moderate climate, is about 50% Muslim. In an article in Arab News, Lejla Brckalija from the Tourism Association of Sarajevo Canton claims, “The culture of Bosnia and Herzegovina is more comfortable for Muslim tourists. We don’t have to prepare too much for them. We already have mosques, ablution facilities and halal food.”

A destination’s friendliness and hospitality toward Muslims can be the deciding factor for Muslim travelers. Amadeus and InsightOut Consultancy found that Middle Eastern travelers perceived some European destinations negatively for this reason, while some Asian destinations tended to be viewed more positively, especially those like Malaysia and Indonesia, which themselves have large Muslim populations.

The tourism subcategory of “halal tourism” has emerged to help Muslim travelers fulfill their religious needs while they are away from home and select places where they will be welcomed. CrescentRating, a halal-travel focused research and consulting company, has teamed with MasterCard for the last five years to produce an annual Global Muslim Travel Index. In addition to highlighting trends and data in the space, the highlight of the index is a ranking of 130 global destinations according to how Muslim friendly they are as a travel destination. Four key factors are considered in the rankings: Access (10% weight), which includes visa requirements, connectivity, and transport infrastructure; Communications (20% weight), including outreach, ease of communication, and digital presence; Environment (30% weight), including safety, faith restrictions, visitor arrivals, and enabling climate; and Services (40% weight), including core needs, like halal food and prayer facilities, core services, like hotels and airports, and unique experiences.

In 2019, Indonesia and Malaysia shared the top ranking of the index. Malaysia has taken unique steps to assure its status as a halal friendly destination. For example, in July 2019, the country’s Islamic Tourist Center launched the government-backed “Muslim-Friendly Hotel Recognition” initiative, which gives accreditation to hotels that are compliant with certain Islamic laws. This is the first such government-backed program in the world.

There is also a growing landscape of halal travel focused OTAs. In 2018, Dubai based Holidayme, an online travel portal that focuses on Middle Eastern customers, merged with Malaysia-based, halal-travel booking site Tripfez. The company had just closed a $16 million funding round. And in September 2019, UK-based HalalBooking.com closed a funding round resulting in its valuation raising to $50 million.

When destinations do not project their friendliness toward Muslims, travel from the Middle East is likely to be impacted as a result. Of countries implementing policies that negatively impact Muslim travelers, Naaman said, “there definitely is an impact when some of these destinations are making it less friendly for Muslim travelers. We certainly would expect the drop in visitors to those destination, but that’s usually I would say short-lived … let’s say a country decides to impose some sort of a ban, for example on being veiled … You’ll usually see the impact on that in the immediate future. So within the next one to three years.”

Even if it’s just in the short term, the consequences can have a real effect. Caroline Beteta, CEO of Visit California told Skift earlier this year that the state experienced “a significant drop-off from GCC after the Trump travel ban went into effect.” If governments won’t do it, it’s becomes the responsibility of destination organizations and travel companies themselves to assure that Muslim travelers know they are welcomed as visitors or customers and that their needs will be met.


Global Travel Brands and Destinations Are Finding Their Place in the Middle East Outbound Travel Landscape

We anticipate the Middle Eastern outbound travel market will continue to grow steadily over the next decade. This market hasn’t yet attracted as much attention from the travel industry as China which experienced a huge boom of growth, or of India which is set to boom soon. Even so, some travel companies and destinations are taking steps toward appealing to travelers from this market, especially those from the high spending GCC countries.

It’s crucial that organizations do their due diligence to understand the nuances of the market and which segments are most relevant to them. El Shafaki calls this out as a necessary foundation for any plan, “first I think they need to learn about each specific market’s preferences, because even though they do have general unified preferences, there will be differences between the different countries, and also by age group and background.” Armed with such an understanding, travel companies and destinations can begin addressing the preferences of Middle Eastern travelers and some of the barriers they might face when traveling internationally.

  • California: As part of its plan to attract super affluent travelers to the state, Visit California is initiating a strategy to attract those from the Middle East, and especially the GCC. According to Visit California, visitors from the GCC stayed in the state for an average of 13.5 nights and spent an average of $2,422 per visitor compared to Chinese visitors at $1,968 and British at $1,360. This expenditure makes this market especially appealing. However, as mentioned above, after the Trump travel ban was put into place, the state saw declining visitation from this region.The new strategy is an effort to overcome this challenge.After researching and familiarizing the organization with the region in order to understand its nuances, a two-year strategy has been put in place that launched in summer 2019. This strategy is in two concurrent parts in order to address the varying travel preferences and behaviors of expats and nationals. The plan aims to strengthen the DMO’s bonds with industry and media partners in the GCC and teaching the destinations within California about the unique preferences and needs of Middle Eastern travelers. This includes a push to increase the perception of Muslim-friendliness, such as through the provision of halal-friendly services and amenities.
  • South Africa: South Africa began a major push in 2017 to increase its inbound tourists from the Middle East. In 2017, Saudi Arabia’s president of the Saudi Commission for Tourism and National Heritage visited South Africa to discuss tourism strategies that could benefit both countries. And in 2018, 21 South African tourism companies and organizations visited Iran, the UAE, Kuwait, and Saudi Arabia to showcase the country’s tourism offering in the first “Learn South Africa Roadshow.”This mission was undertaken as part of South Africa Tourism’s goal of attracting four million more international tourists to the country by 2021. According to South Africa Tourism’s regional general manager of Asia/Australia/Middle East in the board’s press release, the DMO sees the Middle East as an underserved market, but one that could be very valuable, given the country’s “similar time-zone, [and] Halal and Muslim-friendly locations.”
  • Japan: Partly in preparation for the anticipated tourist influx that will come with the 2020 Olympic Games in Tokyo, efforts are being made in Japan to welcome and cater to Muslim travelers. Japan already is a top destination choice for Muslim travelers from Asian countries like Malaysia and Indonesia, but with the Olympics bringing an expected 40 million visitors in 2020, the country is prepping to cater to a more diverse Muslim population, including those from the Middle East.An article in the Malaysian New Straits Times cites an increase in halal-friendly hotels and the addition of prayer facilities and halal foods in the country’s international airports. Japan’s National Tourism Organization features a page on its website dedicated to frequently asked questions for Muslim travelers and has compiled an online “Welcome Guide for Muslim Visitors” with information about restaurants, accommodations, religious facilities, and shopping.
  • Indonesia: In November 2019, the Tourism Ministry of Indonesia and the Indonesian Consulate General Jeddah held tourism and cultural festivals in Jeddah and Riyadh called Wonderful Indonesia Week to help raise awareness among the Saudi travel industry and travelers about the country as a travel destination. The Consul General announced that in addition to the event, the government was launching a larger promotional agenda to attract Saudis. A big part of this plan will include inviting Saudi Millennials, including bloggers and YouTube influencers to visit Indonesia for familiarization trips. Given their affinity for social media, and especially YouTube, this could be a successful strategy for attracting tourists from the Middle East’s largest and highest-spending outbound travel market.
  • SpiceJet: In October 2019, the Indian low-cost carrier announced that it had signed a memorandum of understanding with Ras Al Khaimah International Airport in the UAE to begin direct flights between RAK and New Delhi in December 2019, beginning with five flights per day.In November, SpiceJet confirmed that it will launch a new airline that it will base at RAK, of which a 51% share will belong to the Ras Al Khaimah emirate. This new airline (which is yet to be named) will become the sixth airline to be based in the UAE. According to the airline’s chairman and managing director, setting up shop here will not only connect Middle Eastern travelers to India and South Asia, but will also help connect them and Indian travelers to Africa and Europe as well.
  • Cleartrip: Cleartrip, India’s second-largest OTA, acquired Flyin, the largest OTA based in Saudi Arabia in June 2018. Given the fierce competition among OTAs in India, Cleartrip’s acquisition in this market was a strategic move. Because travel in the Middle East is mostly booked offline, there is less competition in the online space, “which means Cleartrip has a chance to grow there more profitably,” Skift’s Travel Tech Editor, Sean O’Neill reported at the time. Following the acquisition, Cleartrip reported that it would have 60% market share of online travel sales in the Middle East.


Key Takeaways

  • The Middle East outbound travel market has grown steadily over the last couple decades, and we expect this will continue.
  • The region’s fast growing population and efforts to diversify its economies will continue to drive the outbound travel market.
  • Saudi Arabia dominates outbound travel among the region’s countries. On its own, it accounts for nearly a third of all outbound trips and 17% of all outbound expenditure.
  • The GCC countries are especially important outbound travel markets in the region due to their high spending. These six countries account for 60% of the total international expenditures by Middle Eastern countries.
  • Per-capita spending for the region, and especially the GCC, is relatively high. The top three countries in terms of per-trip expenditure spend more than $3,000 per trip on average.
  • In addition to its relative wealth, other factors driving the region’s outbound travel market include accessible and connected air travel and the strong passports among the top travel markets in the region.
  • The outlook is not entirely rosy. The region often deals with political and social issues that can be bad for travel. Additionally, if the GCC countries are not successful in diversifying their economies, the high incomes that facilitate outbound travel today will be impacted as the rest of world moves away from oil dependency.
  • Compared to most regions, the Middle East has a very young population. Young Middle Easterners have developed a unique and close relationship with technology and social media which is driving changes to their travel behaviors and preferences.
  • Many countries in the Middle East have high populations of expats, and this population travels differently from high-income nationals.
  • Both expats and high-income nationals from the Middle East tend to travel for long periods of time a few times a year.
  • Most travel in the region is still booked offline, but the online travel space is growing. There is an especially rich landscape developing of online travel sites that specialize in booking halal-friendly travel.
  • Most Middle Eastern travelers travel with their families in large multi-generation groups and/or groups of more than one family.
  • Destinations are often selected for their lush nature, mild weather, air travel accessibility, and hospitality toward Muslims.
  • The Middle East is over 90% Muslim, so travel brands and destinations need to take religious needs into account if they want to attract this market.
  • In order to appeal to Middle Eastern travelers, travel companies and destinations need to do their due diligence to understand which countries and segments within the region are most relevant to them.


Endnotes and Further Reading

  1. Airways Magazine, “Qatar Airways Expands Codeshare with LATAM Airlines,” October 2019.
  2. Amadeus & InsightOut Consultancy DMCC, Consumer Travel Report 2018 — Middle East, 2018.
  3. Amadeus,“The untapped potential of online travel in the Middle East,” April 2019.
  4. Anna.aero, Middle East aviation market doubles over past 10 years, however growth rates shrinking fast,” April 2019.
  5. Arabia Aerospace, “The only way is up for Middle East LCCs,” January 2017.
  6. Arabian Business, “Gulf’s online travel market forecast to grow to $15bn by 2023,” May 2019.
  7. DinarStandard, Dubai Islamic Economy Development Centre, Salaam Gateway, State of the Global Islamic Economy Report 2019/20, November 2019.
  8. Emirates, “Emirate to expand reach in Mexico via enhanced agreement with Interjet Airlines,” December 2019.
  9. Ipsos, Spotlight: Saudi Arabia Travelers Report, November 2018.
  10. KrASIA, “The Muslim travel market is growing but where are its unicorns?” January 2019.
  11. The National, “Growth of budget carriers in Middle East among world’s fastest,” November 2013.
  12. Northwestern University in Qatar, Media Use in the Middle East, 2018.
  13. Passport Index, Global Passport Power Rank 2019.
  14. Pew Research Center, “The Future of the Global Muslim Population: Region: Middle East-North Africa,” January 2011.
  15. Pew Research Center, “Why Muslims are the world’s fastest-growing religious group,” April 2017.
  16. PwC, “The five megatrends that will impact the Middle East’s travel industry: PwC report,” April 2017.
  17. The National, Middle East aviation is set to move from one golden age to another, June 2019.
  18. Skift, “California Leads U.S. Destinations’ Effort to Target the Middle East Luxury Traveler,” June 2019.
  19. Skift, “Indian Online Travel Agency Cleartrip Acquires Flyin,” June 21, 2018.
  20. The Star Online, “Malaysia launches Muslim-friendly hotel recognition,” July 2019.
  21. Think with Google, “Getting to know YouTube’s biggest Middle Eastern audience: Millennials,” March 2019.
  22. Trade Arabia, “Gulf Air to start five weekly flights to Maldives,” June 2019.
  23. Travel Daily Media, “Maldives reports robust rise in Middle East visitor,” August 2019.
  24. TTG MENA, “Middle Eastern tourists wooed by the Maldives,” March 2019.
  25. We Are Social and Hootsuite, Digital 2019.