Complex Made Simple

Diplomatic row a major blow for Qatar tourism

In the worst diplomatic crisis ever in the Middle East history, Saudi Arabia-led alliance of Arab Muslim-mainly nations severed their ties with Qatar earlier this week, and shut all land, air and sea traffic with the tiny peninsular country.

Even as Emir of Kuwait visited leaders of the regional powers as part of his efforts to mediate an end to the crisis, new sanctions-like measures are continuing to be announced against Qatar.

This has further aggravated concerns over the massive impact on the economies involved in the tussle and businesses in those nations.

Tourism sector in these nations are said to come under threat as the row escalates and more countries joining the alliance.

“With countries in GCC saying they plan to break off all land, air and sea traffic with Qatar we believe it would have a huge impact on the tourism revenues of the country,” notes a report from Oman-based Ubhar Capital.

Nearly 2.63 million visitors arrived in Qatar in eleven months of 2016 of which 48.6 per cent were from the GCC amounting to 1.28mn, as per Ministry of Development Planning & Statistics of Qatar statistics.

During the Shop Qatar Festival early this year, the country witnessed a 16.8 per cent increase in visitors compared to last year. Of the total visitors, 188,513 were GCC nationals who recorded an increase of 23 per cent.

Much of this growth came from the Saudi market, which brought a total of 133,849 visitors to Qatar over the entire month-long period of Shop Qatar which began on January 7.

With travel from the kingdom, UAE and Bahrain to Qatar and vice versa coming to a sudden halt the tourism sector in these countries will definitely take a hit.

Moreover, Qatar looks to generate 5.2 per cent of its GDP through tourism over the coming years, creating nearly 98,000 jobs and managing an inventory of 63,000 hotel rooms.

The country is also set to invest up to $45 billion in new developments under the National Tourism Sector Strategy 2030. These include $2.3bn earmarked for 2022 World Cup facilities and $6.9bn for transport infrastructure and associated projects.

Airlines worst hit

Flight movements in Doha’s airspace have suddenly encountered a big drop.

The region’s airlines are the obvious and immediate victims of the diplomatic breakdown, with Qatar’s state airline Qatar Airways being the hardest hit, as it can no longer fly a dozen or more flights to some of the Middle East’s biggest markets.

Diogenis Papiomytis, Director of Aerospace and Defence Practice at Frost & Sullivan, tells AMEinfo: “The Qatari crisis is an important development and a major headache for QR’s network planning department. More than ten per cent of all seats flying to/from Qatar are assigned to the four countries .” (Editor’s note: QR, EK and EY are flight codes for Qatar Airways, Emirates Airlines and Etihad Airways, respectively.)

He adds: “By our calculations, eight out of ten passengers flying between Qatar and UAE are people whose origin or final destination is beyond those two countries. So the combined network impact is huge.”

What has happened?

In a shocking development in the GCC region, four countries severed diplomatic relations with Qatar on Monday.

Saudi Arabia, UAE, Bahrain, Egypt and Yemen were the first to cut their ties accusing Qatar of destabilising the region.

Maldives, Mauritius and Mauritania and Libya’s Libya’s eastern-based government also followed suit by breaking ties while Jordan reduced its diplomatic status with Qatar.

Qatar has called the decision “unjustified”, with “no basis in fact”.