KUWAIT’S $13 billion investment in its transport infrastructure is driving its tourism sector, according to government officials.
In a recent interview, Khaled Al Ghanim, deputy chairman and managing director, Kuwait Tourism Co. confirmed that in addition to government projects, Touristic Enterprises Co is also planning to launch a raft of entertainment, sports and tourism projects valued at up to $460 million, boosting Kuwait’s regional status.
Recognising Kuwait’s potential, Alpen Capital reported growth in CAGR for the hospitality sector at 8.1 per cent over the period 2011–16. Alpen’s October 2012 GCC Hospitality Industry Report, estimates 2012-13 GDP growth of three to five per cent and a strong business travel base. The development of Kuwait’s existing leisure and business infrastructure is also set to drive new inbound business, with steady tourism growth over the last decade, leading to an increase in international tourist arrivals of 13 per cent for the period 2001-2011, and tourism receipts of $5.3 billion in 2011.
By 2015, Kuwait hopes to welcome one million tourist arrivals per annum.
“Kuwait is now midway through its latest five-year tourism plan, which has leisure sector growth as its primary focus. This is supported in the mid to long term by an investment of $6 billion to expand the capital’s airport, with a second terminal by 2016, and a new $7 billion metro system which will be operational by 2020,” said Mark Walsh, portfolio director, Reed Travel Exhibitions.
“Tourist arrivals are also expected to increase at a CAGR of 4.9 per cent between 2012 and 2022. Kuwait has the highest proportion of budget hotels in the region (around 22 per cent) and the potential to capture a broad international target audience offers exciting prospects for leisure project developers looking at opportunities in and around Kuwait City,” he added.
The Alpen Capital report noted a 1.9 per cent drop in average daily rate (ADR) for Q1 2012 accompanied by a decline in occupancy over the same period, but forecasts mid-term occupancy rate growth to rise from 58 per cent in 2011 to 62.5 per cent in 2016, with ADR to grow at a CAGR of 1.3 per cent to reach $260 by 2016.
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