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Kuwait sharpens focus on expanding tourism sector

KUWAIT, March 19, 2017

Investment in Kuwait’s tourism industry is set to increase over the next decade, as the government moves to speed up construction of a new international airport terminal and several major hotel chains work to expand operations in the capital city, said a report.

Airport construction

According to information released by Oxford Business Group, Last month the government announced it had cut the completion time for a new terminal at Kuwait International Airport (KIA) from six years to four, moving the deadline forward to 2020.

Emad Al Jalawi, director general for aviation safety and air transportation affairs, told the press in August the airport handled 11 million passengers in 2015 and was expecting this to have risen to 12 million in 2016. Designed for 6 million passengers annually, KIA’s existing facilities are operating well beyond capacity.

The new international terminal will be able to handle 25 million passengers a year, according to Turkey’s Limak, which was awarded a KD1.31bn ($4.29 billion) contract to build the project in May 2016.

International brands expand presence

In the private sector, major hotel brands will add roughly 1,000 new keys to the market by 2020.

Canadian firm Four Seasons Hotels & Resorts has partnered with Kuwaiti retailer Alshaya to launch a new hotel in downtown Kuwait City; in October the companies announced that the Four Seasons Hotel Kuwait at Burj Alshaya will open early this year. Part of the larger Burj Alshaya mixed-use development in the capital, the 140,000-sq-metre hotel will be located in the 22-storey Eastern Tower and add 284 rooms to the market.

In August 2016 Hilton and Kuwait’s Al Rai Real Estate also announced plans to invest almost $1 billion in new hotel developments at Kuwait City’s The Avenues mall. Both the 158-room luxury Conrad Kuwait and the 430-room Hilton Garden Inn are scheduled to open at the shopping centre in early 2019.

In addition, US chain Hyatt has partnered with Kuwait’s Tamdeen Group to develop the 261-room Grand Hyatt Kuwait, which will be located within the 360 Mall development and is due to open in 2020.

Lastly, two mid-tier offerings, the 160-room Novotel Sharq and 200-room Centro Rotana, are expected to launch this year and in 2018, respectively.

From leisure to business

To add to the growing presence of large international hotel operators, a number of publicly funded tourist attractions have recently opened or are near completion. The $770 million Sheikh Jaber Al Ahmad Cultural Centre, a 214,000-sq-metre development that includes an opera house, theatre and conference facilities, opened to the public in October 2016, while the Abdullah Al Salem Cultural Centre and Cultural Village are both scheduled to launch in 2017. These new offerings aim to capitalise on rising leisure tourism spending, which comprised 80.7 per cent of total tourist expenditure in 2015, and is forecast to grow by 4.5 per cent annually until 2026 to hit KD1.94 billion ($6.35 billion), according to the World Travel & Tourism Council (WTTC).

In addition to maintaining a focus on cultural attractions and regional tourist markets, the state’s tourism strategy focuses on the relatively undeveloped meetings, incentives, conferences and events (Mice) segment, Faisal Al Duraie, director of research and tourism information at the Ministry of Information, told media last month.

Long-term growth prospects for the MICE segment are strong. According to the WTTC’s “Economic Impact 2016” report, business tourism spending, while forecast to have fallen by 2.4 per cent in 2016 to KD266.8 million ($874 million), is expected to rise by an average of 6.5 per cent annually through to 2026 to reach KD501.3 million ($1.6 billion). By comparison, leisure spending during this time is expected to increase by 4.5 per cent per year, from KD1.25 billion ($4.09 billion) to KD1.94 billion ($6.35 billion).

Investment and arrivals on the rise

According to the WTTC report, total investment in Kuwait’s tourism sector was KD124.5 million ($407.8 million) in 2015 and is forecast to have risen by 10.8 per cent in 2016 to reach KD138.1 million ($452.4 million). In the years to 2026, it expects tourism investment to grow by an average of 3.7 per cent annually to hit KD198.7 million ($650.9 million).

Strong growth is also expected in international arrivals. Having increased by 8.7 per cent to 385,000 last year, the figure is projected to rise by 25.7 per cent over the next nine years to 484,000 in 2026. Over the same period, the sector’s contribution to GDP is expected to reach KD1.36 billion ($4.4 billion), or 2.6 per cent, up from a projected KD834.3 million ($2.7 billion), or 2.1 per cent of GDP, in 2016. - TradeArabia News Service




Tags: tourism | Kuwait | investment |

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