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Can alternative segments reboot Gulf tourism’s Covid-19 recovery?

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With Saudi Arabia’s flagship Red Sea tourism project securing $3.8bn in green financing, various governments in the Gulf region are looking to new, alternative tourism models to drive the coronavirus recoveries in this important sector, with an emphasis on ecological options and staycations.

Both in order to reboot its tourism industry and as part of its drive to diversify the economy away from hydrocarbons, Saudi Arabia is developing several major ecological tourism projects.

In April the Red Sea Development Company – which is owned by the Kingdom’s Public Investment Fund – announced that it had raised $3.8bn for the Red Sea Project through the first ever riyal-denominated green finance credit facility.

The project is being built on a 28,000-sq-km site that contains 90 islands. It is set to welcome its first visitors in 2022, and when it is fully operational in 2030 it will feature 50 hotels, a luxury marina and a range of entertainment and leisure facilities.

The site’s entire transport network, including a new airport, will be powered by renewable energy.

Four banks in Saudi Arabia – Banque Saudi Fransi, Riyad Bank, Saudi British Bank and Saudi National Bank – contributed to funding the construction of the project, while HSBC acted as green loan coordinator.

Alternative tourism on the rise

The Gulf region as a whole is increasingly embracing innovative, sustainable approaches to tourism.

“The demand for local, greener and eco-friendly tourism has grown exponentially, in both Europe and the GCC,” Chirag Kanabar, managing director of Pine Wood Building Materials Trading, a company focussed on eco-friendly and sustainable modular construction, told OBG. “This is in line with pandemic-related preferences for increased social distance and privacy.”

The UAE, for example, has seen a significant uptick in “glamping”, a phenomenon whereby tourists can enjoy the experience of camping while having access to facilities that are more luxurious than those available on traditional campsites.

Glamping is part of a broader shift towards the so-called staycation model. With flights grounded and borders closed as a result of Covid-19, last year many people around the world took their holidays within their home country. This year, even though vaccine programmes are being rolled out and borders gradually reopened worldwide, international tourism is expected to recover slowly, and “staycationing” is leading the way.

Back in 2018 market research company Aritzon predicted that the global glamping industry would reach revenues of approximately $1bn by 2023, growing at a compound annual growth rate (CAGR) of 6% throughout the period.

However, it would seem that the coronavirus pandemic has served to accelerate the sector’s growth. According to a report published in March this year by Grand View Research, global glamping will be worth $5.4bn by 2028, thanks to a CAGR of 14.1% between 2021 and 2028.

The UAE is particularly well placed to leverage this trend, with its range of naural landscapes close to urban centres offering varied cultural attractions.

One flagship project is Sharjah’s Kingfisher Retreat, a tented hotel in the Middle East, which won the 2020 Luxury Beach Retreat in the Middle East prize at the World Luxury Hotel Awards.

“This is tangible proof that the emirate’s ecotourism model, based on environmentally friendly structures, is working, so the government is seeking to expand it to other locations within its territory,” David Patrick Court, a consultant at Bushtec Creations, a luxury tent manufacturer for resorts and glamping providers, told OBG.

Meanwhile, the recently announced Dubai 2040 Urban Master Plan puts a strong emphasis on sustainability.

In a significant move, Glampitect – a leading British eco-resort design consultancy – in March announced it was opening a site in Dubai.

Elsewhere, at the Arabian Travel Market 2021 – held at the Dubai World Trade Centre from 16-19 May – the Ras Al Khaimah Tourism Development Authority (RAKTDA) announced over 20 sustainable tourism development initiatives across the emirate.

As well as glamping sites, these will include eco-hotels and experiential offerings. 

“The GCC region excels at providing opportunities for experiential travel, given its rich history and culture. A possible way forward for the region to fully capitalise on this might be for individual countries and emirates to coordinate among themselves in an approach similar to that taken by South-east Asian nations, whereby each one can specialise in their distinctive value proposition,” Tommy Lai, CEO of the Gulf-based GHM Hotels, told OBG.

“For the region, it is important to promote the idea that ecotourism is multifaceted, and not only associated with rainforests and tropical settings. The multifaceted potential of ecotourism can be developed on the basis of the unique habitats in the GCC, including its deserts,” Lai added.

Echoing these sentiments, Sanjiv Malhotra, executive vice-president of Shaza Hotels, told OBG that, “in the UAE, every emirate offers a distinct experience. Sharjah has decisively focused on positioning itself as a capital of heritage and culture, building on an identity tied to education. It also bets on its natural assets, from its Gulf coast to Khorfakkan.”

New trends in the industry

RAKTDA said that its plan reflects Ras Al Khaimah’s new destination strategy, which is focused on nature, leisure, adventure, accessibility and authenticity.

These focuses broadly correspond to six key trends identified by Euronews Travel in a recent report on the post-2020 future of tourism, namely: wilderness tourism, ecotourism, nomadic tourism, wellness tourism, authentic tourism and mindful tourism.

Nomadic tourism, or “long stay travel”, corresponds to the significant growth in digital nomads. Such travellers relocate for longer periods and, while they spend less on a daily basis, it is possible to capture substantial value from their presence.

While many emerging economies are scrambling to position themselves as digital nomad hubs, Dubai is already an established leader in the field.

As OBG detailed, the Dubai government has launched a virtual working programme designed to attract professionals, entrepreneurs and those working in start-ups.

Given its strong ICT infrastructure and healthy start-up scene, Dubai is an attractive option for digital nomads, with officials marketing the emirate as a place where people can live and work by the beach.

In short, from ecotourism and glamping, to staycations and digital nomads, the Gulf region is at the cutting edge of the latest developments in tourism, providing a recovery model which other regions should be able to build on going forwards.

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Tourism

Africa’s Tourism Leaders Identify Investments as Key to Sustainable Recovery

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The African Members of the World Tourism Organization (UNWTO) have met in Cabo Verde to strengthen their cooperation and advance plans for recovery and sustainable growth.

The 64th meeting of the UNWTO Regional Commission for Africa (CAF) saw 23 countries represented on the island of Sal, with 21 Ministers of Tourism joining five Ambassadors for the high-level event. Opening the Commission meeting, the President of Cabo Verde Jorge Carlos Fonseca offered a warm welcome to UNWTO’s leadership and to all delegates. The President was joined by Cabo Verde’s Minister of Tourism and Transport, Carlos Jorge Duarte Santos, and Prime Minister Dr. Ulisses Correia e Silva in reaffirming support of the highest political level for tourism and recognition of the sector as a driver of recovery and sustainable development.

Chaired by Christine Kaseba Sata, Ambassador of Zambia to Spain and Permanent Representative to UNWTO, delegates addressed the biggest challenges standing in the way of the sector’s safe restart across the continent. Special emphasis was placed on the importance of speeding up vaccine rollouts across the continent, as well as addressing security issues that continue to have an impact on how global travellers perceive Africa as a safe tourism destination. Also on the agenda was the current level of connectivity between destinations, with improved air links the harmonization of travel protocols identified as an effective means for boosting regional tourism.

Tourism’s restart ‘essential’

Secretary-General Zurab Pololikashvili welcomed delegates to the Commission meeting, providing an overview of UNWTO’s work during the ongoing crisis and how this is driven by the stated priorities of its African Member States. He said. “The continent is united in its determination to use the power of tourism to drive development and opportunity for all. And with coordination and targeted investments, African tourism can finally fulfil its unique potential.”

Rebuilding trust in travel

In Cabo Verde, UNWTO Members were brought up-to-date on the development of the International Code for the Protection of Tourists, a landmark code aimed at helping restore confidence in travel. Members were also presented with an overview of the UNWTO General Programme of Work & Budget for the Period 2022-2023. Additionally, signalling a shared determination to keep moving forward even in challenging times, Members also held elections for key positions within UNWTO decision-making bodies ahead of the 24th General Assembly.

Building capacity

Running in parallel with the Commission meeting, UNWTO hosted capacity building workshops on innovation, digital marketing and investment These workshops were held ahead of the second edition of the UNWTO Global Tourism Investment Forum, opened by Prime Minister Dr. Ulisses Correia e Silva and featuring the participation of investors from Spain, Germany, Switzerland and the USA as well as public and private sector leaders from across Africa. Backing up the workshop on marketing, UNWTO also launched its new Brand Africa publication. Produced with key African Tourism Partners, the publication aims at helping destinations use effective branding to diversify and attract visitors.

Also in Cabo Verde, tourism leader celebrated the signing and approval of the UNWTO Declaration on the Future of Mobility and Sustainable Transportation, a commitment aimed at the better understanding of how investments can help make the sector greener while also encouraging greater cooperation between tourism authorities and transport providers. Concluding the Regional Commission meeting, UNWTO signed a Memorandum of Understanding (MoU) with the Government of Cabo Verde. The aim of the MoU is to enhance cooperation between UNWTO and the Ministry of Tourism to strengthen the country’s branding, boost tourism education initiatives, and support research into the socio-economic impact of the sustainable development of tourism across Cabo Verde.

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Green Hotel Investments to #RestartTourism

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Destination Capital (DC) has signed a collaborative arrangement with the World Tourism Organization (UNWTO) of the United Nations to support the rejuvenation of the hotel industry. The arrangement supports the relationship DC has with the International Finance Corporation (IFC) to promote investment in green and sustainable tourism accommodation and to stimulate re-employment, particularly in the wake of the COVID-19 pandemic.

The collaboration between UNWTO and Destination Capital is based on DC’s adoption of best practices aimed at reducing carbon emissions and operating hotels in a manner consistent with IFC’s environmental and social criteria. Against this backdrop, DC acquires and repositions freehold hotels of 150-250 rooms in Thailand and across South-East Asia with the aim of implementing sustainable water and energy systems. It also works to promote gender equality at every level of the hospitality sector, another of UNWTO’s core priorities and in line with Sustainable Development Goal number 5.

While governments and destinations around the world are working on vaccination programs to accelerate the restart of the tourism, UNWTO is working with the private sector to encourage employers to play their part in the recovery of local communities through job creation and training programs. UNWTO data shows that international tourism arrivals fell by 1 billion in 2020, with the crisis carrying over into 2021. Worldwide, this has placed as many as 120 million tourism jobs directly at risk. Moreover, Asia and the Pacific has been the worst-affected of all global regions, and young workers and women are among the hardest hit by the downturn in tourism employment.

In line with the 2030 Agenda for Sustainable Development, DC recognizes the hotel industry not only has a responsibility to re-hire and re-train hotel staff. It is also increasingly under pressure to reduce its carbon footprint and mitigate the impact of energy and water consumption as well as food waste and environmental degradation. DC is committed to retrofitting its hotels to be compliant as ‘green hotel’s as per the Excellence in Design for Greater Efficiencies (EDGE) standards established by IFC.

About Destination Capital

Destination Capital is a private equity real estate investment company based in Bangkok Thailand which focuses on acquiring, renovating and repositioning hotel assets such that they are EDGE compliant and follow a rigorous sustainability protocol in order to unlock value for our capital partners. Rigorous asset manage programs are in place to yield higher values upon exit while pursuing a “Triple Bottom Line” strategy: Planet, People, Profit.

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Promoting ‘Brand Africa’ to Realize the Continent’s Tourism Potential

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UNWTO’s African Member States will work together to establish a new narrative for tourism across the continent. To better realize tourism’s potential to drive recovery, UNWTO and its Members will also work with the African Union and the private sector to promote the continent to new global audiences through positive, people-centred storytelling and effective branding.

With tourism recognized as an essential pillar of sustainable and inclusive development for the continent, UNWTO welcomed high-level delegates to the first Regional Conference on Strengthening Brand Africa. The conference featured the participation of the political leadership of host country Namibia, alongside public and private sector leaders from across the continent.

UNWTO Secretary-General Zurab Pololikashvili welcomed the common determination to rethink as well as restart tourism. “African destinations must take the lead in celebrating and promoting the continent’s vibrant culture, youthful energy and entrepreneur spirit, and its rich gastronomy”, he said.  

Windhoek Pledge puts people first

On the back of a series of workshops and a Ministerial Think Tank, UNWTO’s African Member States unanimously endorsed the Windhoek Pledge on Advocating Brand Africa. Under the terms of the Windhoek Pledge, Members will engage both public and private sector stakeholders as well as local communities to build a new, inspiring narrative for tourism across the continent. They will identify positive, human-centred stories, and through strengthened partnerships with the media, showcase them to the world, reaching new and diverse tourism source markets.

Over the coming weeks, UNWTO will work with all signatories to create a common roadmap towards establishing Brand Africa. This will include establishing common values and goals and identifying funding needs and opportunities as well as providing branding toolkits for destinations, including guidelines and recommendations and training and capacity building in market intelligence, digital marketing and data management.

Bilateral meetings show support for tourism

Alongside the conference, UNWTO Secretary-General Zurab Pololikashvili, held high-level talks on the restart of tourism with President of Namibia Hage Geingob, as well as with the country’s Deputy Prime Minister Netumbo Nandi-Ndaitwah and with the African Union Commissioner for Trade and Industry Albert Muchanga

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