Critical economic growth is expected in the Gulf as China reopens

Gulf states are expected to see a significant boost in their economies as China reopens and demand for aviation fuel and tourism increases. Tourism experts predict that Chinese visitor numbers will increase to at least the tens of thousands in the coming months due to direct flights to cities such as Dubai and Abu Dhabi. Chinese expats are also planning to welcome their relatives for the Chinese New Year for the first time in three years.

Ms. Malik stated that the energy and aviation industries would be among the first to benefit from China’s reopening, as airlines purchase fuel and Chinese businesses spend more. She also mentioned that China’s increased energy demand would be a significant factor in the forecasted Brent crude price of $95 per barrel in 2023, which will be beneficial for the GCC. Additionally, she mentioned that China will also be important for non-oil sectors and may offset the expected global GDP growth slowdown. However, she also noted that some countries might impose testing requirements for Chinese travelers, which could delay support.

The easing of Covid-19 restrictions in Asia will be crucial for the aviation and tourism sectors in the GCC, as a reduction in transit passengers has been seen as a direct result of restrictions in Asia. As restrictions are lifted, it is expected to see a boost in direct tourism into the GCC with an increase in Chinese visitors, which is expected to be positive for the economy, as Chinese visitors around the world contributed $253 billion to the global economy in 2019.

Boosting Tourism Industry

The hospitality industry welcomed the news that travel restrictions from China were lifted in the region. The Holiday Inn Dubai Science Park general manager said bookings are expected to increase as Covid-related restrictions are lifted gradually. He added that patience would be required at first, as numbers will not immediately return to pre-pandemic levels. He believes that by 2024 if there are no further interruptions and airlines increase their capacity, visitor numbers will reach 2019 levels.

An assistant professor at Edinburgh Business School in Dubai, Sean Lochrie, stated that the city is expected to see a significant increase in visitor arrivals in the upcoming months. Chinese tourists are known to generate high revenue in the tourism industry and their arrival in large numbers and groups will lead to higher hotel occupancy, more consumer spending, and increased revenue for various tourism-related industries. A hotel manager stated that the announcement of the travel bubble means that hotels in the region will receive a boost this summer, a time when bookings typically decrease by 30% due to the hot temperatures. It will take around two to three months for Chinese tourists to return in significant numbers, according to the hotel manager.

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