Dubai, UAE – The tourism sector in the Gulf Cooperation Council (GCC) is projected to significantly boost its contribution to the region’s GDP, increasing from approximately $130 billion in 2023 to over $340 billion by 2030. The growth is expected to account for more than 10% of the GCC’s GDP, according to Fitch Ratings.
The GCC countries have set ambitious targets for their tourism sectors to diversify their economies away from oil dependence. The aviation industry is anticipated to play a critical role in this expansion, with air passenger traffic projected to grow substantially. The region is already home to some of the world’s most advanced airports, including Dubai International Airport in the UAE, Hamad International Airport in Qatar, and King Abdulaziz International Airport in Saudi Arabia.
In 2023, GCC airport traffic exceeded 2019 levels by 8 percent and saw a 20 percent increase compared to 2022. In contrast, other EMEA airports covered by Fitch reached 97 percent of their 2019 traffic levels. The GCC’s infrastructure plans aim to double air traffic by 2030.
The UAE and Qatar have heavily invested in their airports and flagship airlines over the past decades, making them major international passenger hubs. Saudi Arabia has also increased its airport investments to accommodate expected population growth and international visitors, including pilgrims. Notably, Dubai has announced a $35 billion plan to transform Al Maktoum International Airport to handle 260 million passengers annually.
GCC countries are increasingly turning to public-private partnerships (PPPs) for infrastructure projects. Dubai has already outlined a $10 billion pipeline for social PPPs and about $1 billion for transport PPPs. In 2023, Saudi Arabia introduced a pipeline of 200 projects across 17 sectors, including four airports. The procurement for Abha Airport drew significant interest from local and international investors and operators. Medina Airport, the first PPP airport concession in the GCC, closed in 2012 with $1.2 billion in financing led by local banks for its expansion.
To fund these large-scale projects, GCC countries are exploring bond and sukuk markets, which provide access to a broader investor base and long-term financing options. Fitch Ratings applies its Transportation Infrastructure Rating Criteria to assess EMEA airports, which will also be used for future projects in the GCC. Fitch’s portfolio includes issuers with various debt structures, ranging from corporate-like issuers with senior unsecured debt to project finance issuers with strict covenants.