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UAE’s online travel industry expected to exceed $9b by 2014
November 15, 2012
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DUBAI: The UAE has emerged as the most mature market for travel and tourism, owning 47 per cent of the total market and 60 per cent of the online market in the Middle East, a new research released by Global Travel Market Research firm PhoCusWright has revealed.

Titled ‘Assessing The Online Travel Opportunity: The Middle East’, the report is co-sponsored by Amadeus, a leading technology partner and transaction processor to the global travel and tourism industry. A comprehensive assessment of the travel and tourism industry in the Middle East, the research particularly focuses on the growth and potential of the online travel segment across markets including the UAE, Saudi Arabia, Egypt and Qatar.

According to projections by PhoCusWright, the total online travel market in the UAE will grow from $4.8 billion in 2011 to  $9.5 billion in 2014, highlighting a breakdown of 31 per cent rise in 2012, 24 per cent in 2013 and 22 per cent in 2014.

Antoine Medawar, Vice President, Amadeus Middle East and North Africa, said: “Such staggeting figures are indicative of the fast evolving travel landscape in the UAE. The UAE traveller has been identified as the most sophisticated in the Middle East in terms of technology adoption, owing to high mobile, internet and broadband penetration rates. It is evident, therefore, that technology companies must prioritise providing the industry with the right tools to support the growth of the online travel sector.”

Smartphones represent 62 per cent of total mobile phones in the UAE. The report cited that 43 per cent of these users browse the internet for travel-related information and 54 per cent make an online purchase.

It was further revealed that gross bookings made by Online Travel Agencies (OTAs) are expected to rise from $1.7 billion in 2011 to $3.2 billion in 2014.

Medawar added: “The increase in the number of bookings made by online travel agencies in the region not only highlights a definite shift from traditional booking methods but also demonstrates the evolution and expansion of the industry as a whole. In fact, PhoCusWright points out that the total contribution of travel & tourism to the UAE’s GDP in 2011 was 13.5 per cent, amounting to $48 billion, and is forecast to rise by 4.5% in 2012. With an increased focus on investment in infrastructure, expansion of the aviation industry and promotion of niche tourism, the UAE has confidently placed itself on the map of global competitiveness.”

PhoCusWright anticipates gross bookings by traditional airlines to increase from $16.5 billion in 2011 to $26.2 billion in 2014 and low cost carriers (LLCs) to increase from US$1.4 billion in 2011 to $2 billion in 2014. Bookings made in the lodging segment have been estimated to rise from $6.1 billion in 2011 to $7.5 billion in 2014, while the UAE car rental space is expected to see an increase from $76 million bookings in 2011 to $84.4 million in 2014.

The economic downturn followed by the Arab Spring has been cited as the driving force behind the growth of tourism to the UAE. In 2010, the UAE’s expenditure on international and domestic tourism was approximately $12 billion and the nation recorded 9.2 million inbound and 4 million outbound tourists. It is projected that approximately $234 billion will be pumped into the construction industry for tourism-related projects through 2018.

Amadeus is a leading transaction processor and provider of advanced technology solutions for the global travel and tourism industry.

The company is listed on the Madrid, Barcelona, Bilbao and Valencia stock exchanges and trades under the symbol AMS.MC. It is a component of the IBEX 35, STOXX Europe 600 Index, and the Dow Jones Sustainability Index (DJSI).

For the year ended December 31, 2011 the company reported like-for-like revenues of €2,712 million and EBITDA of €1,039 million. The Amadeus group employs around 10,000 people worldwide, with 123 nationalities represented at the central offices.

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