GCC construction market to reach US$642 billion by 2023
Published by Lucy Stewardson,
The tourist sector of the Gulf Cooperation Council (GCC) is witnessing rapid development to meet the growing demand of international travellers, with a number of infrastructure and hotel projects scheduled to open by 2023. The GCC leisure and hospitality construction market is projected to reach US$642.3 billion in 2023, from an estimated US$466.9 billion in 2019, implying a CAGR of 8.6%, according to GlobalData.
“GCC states are expected to witness an improvement in economic performance on account of recovery in oil prices leading to improved sentiment and an increase in government spending,” said Yasmine Ghozzi, Economist at GlobalData. “Gulf states are making significant investments into the development of tourism and hospitality infrastructure, including airport expansions to increase the handling capacity of projected visitor inflow. This work is supported by regional air carriers offering discounts in order to boost tourism activity in the region.
“Relaxation of visa rules by the governments in the UAE and Qatar is expected to further boost tourist arrivals in these states,” Ghozzi continued. “Improvement in the transport network system and quality of services offered to visitors will also give a boost to the Gulf States’ overall construction industry.”
As part of Bahrain’s large-scale infrastructure development plan, Bahrain International Airport is undergoing a modernisation programme costing US$1.1 billion, which will increase the passenger-handling capacity from 9 million/year to 14 million/year in 2020. Kuwait’s long-term strategy plan aims to increase the capacity of Kuwait International Airport to 25 million passengers/year. It has also planned to invest US$1 billion in promoting tourism over the next few years, to increase its international tourist arrivals to 440 000/year by 2024.
“Tourism is one of Qatar’s major drivers of the country’s economic diversification strategy, in line with the objectives of the Qatar National Vision 2030,” Ghozzi continued. “Having won the hosting of the FIFA World Cup 2020, the highly anticipated global event is already bringing in new investments. The Qatar government is keen to ensure that the growth path for the country is paved for all the key sectors with as much as US$200 billion worth of infrastructure investments allocated to meet economic goals.”
Dubai is expected to witness an inflow of 20 million tourist arrivals in 2020. The World Expo 2020 is expected to attract tourists in between October 2020 and April 2021. To welcome this number of expected visitors in the Emirate during the event, more than 50 000 hotel rooms are currently under construction.
“Saudi Arabia has a number of under-construction tourism projects where it seeks to draw more international and GCC tourists,” added Ghozzi. “The biggest development projects to date include Qiddiya Entertainment City, NEOM, and the Red Sea Project and Amaala resort, which will shape the future of tourism as an important hub to meet and satisfy the recreational, social, and cultural needs of the kingdom.
“These developments are part of the Crown Prince’s ambitious plan, Saudi Vision 2030, which aims to diversify the economy away from a dependency on oil. Furthermore, pilgrimage to Mecca and Medina is one of the key demand drivers for tourist attractions in Saudi Arabia. The religious tourism in Saudi Arabia is expected to see a significant increase on the back of expansion projects in Makkah and Medina, supported by Haramain high-speed rail and the US$7.2 billion expansion project of King Abdulaziz International Airport.”
Read the article online at: https://www.worldcement.com/asia-pacific-rim/04092019/gcc-construction-market-to-reach-us642-billion-by-2023/
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