The travel and tourism industry is being negatively impacted by the high cost of airfare within the Gulf Cooperation Council (GCC), as it is more expensive than in other regions. Due to capacity limitations on some of the GCC routes, airfares in the Arabian Gulf are significantly higher than in other parts of Europe and Asia, where travellers can access a greater variety of low-cost carriers.
However, business leaders in the UAE anticipate that in the upcoming years, the single GCC tourist visa, in addition to an increase in low and ultra-cost carriers, will grow the travel and tourism industry and lower travel costs.
The GCC is totally dependent on intraregional traffic, particularly from the UAE to Saudi Arabia, Oman, and Kuwait, as there is very little domestic travel within the GCC outside of Saudi Arabia. Additionally, a sizable portion of tourists from the Arab region travel to Dubai, the hub of regional tourism.
According to a study published by Roland Berger, flights throughout the GCC are more expensive than those operated by European and Asian airlines, which typically offer far lower fares when traveling within their respective regions.
Regional airlines choose to operate their aircraft outside of the Gulf Cooperation Council (GCC) due to the higher revenue streams associated with doing so. VFR (visiting friends and relatives) traffic is currently not very prevalent in the GCC; instead, corporate traffic is the main source of activity, according to the general manager of Deira Travel and Tourist Agency.
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