High airfare among the Gulf Cooperation Council (GCC) is hampering the travel and tourism sector as intra-region air travel costs are higher than other regions.
Some of the GCC routes are also facing capacity constraints challenge, resulting in airfares being much higher in the Arabian Gulf than in regions across Europe and Asia, where passengers have many more options in terms of the availability of low-cost carriers.
But industry executives in UAE hope that the single GCC tourist visa as well as a growing number of budget and ultra-low-cost carriers will boost the travel and tourism sector and also bring the travel cost down in the coming years.
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Since there is not much domestic travel within the GCC except Saudi Arabia, the region relies entirely on intra-region traffic, especially from the UAE to Saudi Arabia, Oman and Kuwait. Also, the regional tourism hub Dubai attracts a good number of visitors from regional Arab countries.
GCC-wide flights cost more in comparison to European and Asian airlines, which achieve much lower fares when travelling in their respective regions, according to a study released by Roland Berger.
Industry executives suggest that intra-GCC airfares are higher than intra-Europe and intra-Asia regions due to the strong buying power and high per capita income of the oil-exporting countries.
“Commercially, regional airlines prefer operating their aircraft outside the GCC, because they get better revenues than operating flights in the GCC. Currently, VFR (visiting friends and relatives) traffic is not happening in a big way within the GCC and it is only corporate traffic happening in a big way,” said the general manager of Deira Travel and Tourist Agency.
“But once a single tourist visa is out which will allow people to travel to all regional countries, that will definitely boost intra-region air traffic and more airlines will come into the region. Accordingly, prices will come down too.”
Mir Wasim Raja, manager for MICE and holidays at Galadari International Travel Services, said it is much cheaper to travel within Europe than within the Gulf region.
“Every market has its dynamics. GCC residents enjoy strong buying power. Budget carriers have been operating in Europe for many decades, but now low-cost airlines are increasing within the region. Plus, the demand-supply equation is coming into play for the Gulf routes,” said Raja.