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Global travel & tourism: OIC nations improve rankings, but still behind others

| 18 April, 2017 | General
Emmy Abdul Alim
Global travel & tourism: OIC nations improve rankings, but still behind others
Photo: Travelers are seen at the departure hall at Kuala Lumpur International Airport 2 (KLIA2) in Sepang, Malaysia February 15, 2016. REUTERS/Lai Seng Sin

95 percent of Organisation of Islamic Cooperation (OIC) countries fall below the rest of the world’s average for travel and tourism competitiveness, according to Salaam Gateway analysis of a World Economic Forum (WEF) study. But there is room for optimism as most OIC countries have moved up the global ranking.

LEADERS

Once again Europe dominates WEF’s Travel and Tourism Competitiveness Index of 136 economies, with Spain, France and Germany in the top three.

Out of the 136 countries, 37 are OIC states of which Malaysia and the United Arab Emirates (UAE) are the most tourist-friendly.

Malaysia dropped one position to 26th but improved its competitiveness in absolute terms with its score rising from 4.41 for the last edition of the study, in 2015, to 4.50 in 2017.

The UAE’s overall ranking fell to 29 from 24 in 2015. However, its overall score rose from 4.4 to 4.49.

The duo’s rankings fell despite their achievements due to “exceptional” performances of countries such as South Korea, which climbed 10 positions, according to the WEF.

The biggest gaps between Malaysia and UAE are in their use of natural resources (Malaysia +1.5), air transport infrastructure (UAE +1.3), international openness (Malaysia +1.1), and price competitiveness (Malaysia +1).

Chart Travel and Tourism Competitiveness 2017 Malaysia versus UAE

Data source: WEF Travel & Tourism Competitiveness Index 2017

Tourism contributes around 4 percent to each of Malaysia’s and UAE’s GDP but the returns are almost double for UAE, despite the Gulf Cooperation Council (GCC) leader attracting only 55 percent of Malaysia’s international tourist arrivals in 2015.

  MALAYSIA UAE
International tourist arrivals (2015) 25.7 million 14.2 million
International tourist arrivals (2020 target) 36 million 20 million
Average receipts per arrival (2015) $684.10 $1,129.40
Data source: WEF Travel & Tourism Competitiveness Index 2017

If the two countries want to meet their 2020 tourism targets, they must improve on their weakest points. Both must enhance their offerings of cultural resources and business travel, while separately UAE needs to address its international openness and Malaysia its environmental sustainability.

OIC VS REST OF THE WORLD

Malaysia and the UAE are the only OIC economies to score higher than the global average while 62 percent of the Islamic countries, equivalent to 23, lie in the last two quintiles, with 17 in the last quintile alone.

As a result, OIC countries drag the global average ex-OIC score from 4.2 to 3.81.

Chart World Travel and Tourism Competitiveness 2017 OIC 37 scores

Data source: WEF Travel & Tourism Competitiveness Index 2017 

MOST IMPROVED

While an overwhelming 95 percent of OIC countries scored below the rest of the world average, 67 percent, or 24 OIC countries, improved their ranking since 2015 and 7 were named by the WEF among the top 15 most improved economies by percentage change in score.

Chart WEF T&T 2017 OIC 37 rank change

Note: Rank change analysis covers 36 and not 37 OIC countries as Benin was not included in the 2015 Index. Data source: WEF Travel & Tourism Competitiveness Index 2017

Azerbaijan and Tajikistan are the biggest climbers.

Data source: WEF Travel & Tourism Competitiveness Index 2017

STRENGTHS AND WEAKNESSES

By region of OIC countries, Southeast Asia, represented by Malaysia and Indonesia, is the strongest, followed by the six-member GCC, and Europe (Albania and Turkey).

Chart WEF T&T 2017 OIC regions

Data source: WEF Travel & Tourism Competitiveness Index 2017

As a grouping, the OIC countries score highest for price competitiveness and lowest for cultural resources and business travel.

Price competitiveness is the only pillar that sees the 37 economies surpass the rest of the world average, led by Malaysia and Indonesia that are globally ranked 3rd and 5th respectively.

Comparing the OIC grouping with the rest of the world average, the most significant score gaps are for tourist service infrastructure (1.14), international openness (1.03), and health and hygiene (0.91).

Data source: WEF Travel & Tourism Competitiveness Index 2017

Within the OIC countries, the GCC grouping has a higher score for safety and security with the UAE ranked 2nd globally, followed by Oman at 4th and Qatar 10th.

The CIS quartet of Azerbaijan, Kazakhstan, Tajikistan and Kyrgyz Republic lead the OIC countries for health and hygiene.

The OIC countries of Sub-Saharan Africa lead the grouping in environmental sustainability, which considers 10 factors including stringency and enforcement of environmental regulations, sustainability of travel and tourism industry development, and waste water treatment.

According to the WEF report, the environmental strength of a country is directly related to tourism revenue albeit via a complex relationship. As a whole, the 37 OIC countries are weak on ensuring sustainability of their natural capital with no member states ranking in the top quintile. Gabon is the highest-ranked OIC economy at 30th position, followed by UAE at 41st and Uganda 47th.

Data source: WEF Travel & Tourism Competitiveness Index 2017

INTERNATIONAL OPENNESS

International openness takes into consideration visa requirements, openness of bilateral air service agreements, and number of regional trade agreements in force.

For OIC countries by region, Southeast Asia is the most internationally open, followed by Europe (Turkey and Albania), and the Commonwealth of Independent States (CIS - Azerbaijan, Kazakhstan, Tajikistan, and Kyrgyz Republic).

UAE and Bahrain are the most internationally open in the GCC but the region’s overall openness is significantly dragged down by the other four member states.

International openness takes on greater significance for Muslim-majority countries in light of two recent incidents:

1) U.S. President Trump’s attempts to restrict inbound travel for citizens of six Muslim-majority countries - Iran, Libya, Somalia, Sudan, Syria, and Yemen.

2) A ban on most carry-on electronics for passengers on flights to the U.S. and UK, from certain airports in eight Muslim-majority countries – Cairo, Istanbul, Kuwait City, Doha, Casablanca, Amman, Riyadh and Jeddah, Dubai and Abu Dhabi.

Visa requirements weigh on travellers’ decisions to visit destinations. In 2016, destinations worldwide required 58 percent of the world’s population to obtain a visa prior to departure, which is a significant improvement from 2008 when 77 percent of the world’s population was made to apply for a visa, said the WEF.

Data source: WEF Travel & Tourism Competitiveness Index 2017

TOURIST SERVICE INFRASTRUCTURE

Tourist service infrastructure considers hotel rooms, quality of tourism infrastructure, presence of major car rental companies, and ATM machines.

Globally, Europe is strong in this pillar, making up 7 of the top 10 countries.

Of the OIC countries, the GCC has the best tourist service infrastructure. UAE is the highest ranked OIC country in 27th followed by Qatar (33) and Bahrain (35).

Significantly, UAE is in first position for its quality of tourism infrastructure, beating overall pillar leaders Austria and Spain.

WEF T&T Chart - Tourist Svc Infra

Data source: WEF Travel & Tourism Competitiveness Index 2017

CULTURAL RESOURCES AND BUSINESS TRAVEL

This pillar looks at 5 factors and is the OIC countries' Achilles heel: number of world heritage cultural sites; oral and intangible cultural heritage; sports stadiums; number of international association meetings; and cultural and entertainment tourism digital demand.

Globally, China, Spain, and France are the leading countries for cultural resources and business travel.

The highest ranked OIC countries are steeped in history and culture. Turkey is the top OIC country, at 16th, followed by Egypt (22) and Indonesia (23).

 
WEF T&T Chart -Cultural Resources and Business Travel
Data source: WEF Travel & Tourism Competitiveness Index 2017

(20 OIC countries were not included in the study: Afghanistan, Brunei, Burkina Faso, Comoros, Djibouti, Guinea, Guinea-Bissau, Guyana, Iraq, Libya, Maldives, Niger, Palestine, Somalia, Sudan, Suriname, Syria, Togo, Turkmenistan, and Uzbekistan.)

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