Ukraine war’s $7 billion hit to tourism has Middle East hotspots ‘trying to survive’

Abu Dhabi, UAE and Antalya, Turkey (CNN) — As Russia’s war rages in Ukraine, its impact on the Middle East is beginning to stretch beyond the food shortages that already had some policymakers worried.

Home to some of the world’s oldest civilizations and glitziest cities, the Middle East is one of its top tourist destinations. Cities like Dubai, Cairo and Istanbul are regularly listed among the top ten global tourism hotspots.

But as the war causes chaos in energy and food markets as well as rampant inflation across the globe, it is also hitting the tourism industries of some countries more than others. According to Euromonitor International, global inbound tourism will be impacted by $6.9 billion in 2022 due to a collapse of Russian and Ukrainian tourism. Some Middle Eastern nations may face the brunt of it.

Egypt, Turkey and more recently the UAE are three of the most popular destinations for Ukrainian and Russian tourists. The tourism sectors in Egypt and Turkey are already noting the effects, as analysts predict painful losses further down the road.

Before the pandemic, Ukrainian trips to Egypt grew by 49% in 2019 compared to the previous year, according to a 2020 Colliers International report, making Ukrainians the second-largest source market for the North African country after Germany. After Cairo resumed flights in July of 2021 following the easing of Covid-19 related restrictions, Ukrainians were the first tourists to return, said deputy tourism minister Ghada Shalaby.

In 2021, Moscow lifted a six-year ban on charter flights between Egypt and Russia that was imposed after a deadly 2015 plane crash. Russian tourist numbers consequently spiked, reaching 700,000 visitors in 2021 alone, reported the Russian state news agency Sputnik.

Egypt’s tourism ministry is now trying to attract visitors from other countries.

“It is a big hit … but we are trying to survive,” Shalaby told CNN, adding that Egypt is finding ways to maintain Russian visitors while launching campaigns aimed at Western Europe and Arab countries for the coming season.

Analysts are however skeptical about Egypt’s ability to sufficiently fill the gap.

“A dramatic replacement of tourists from those two countries is probably unlikely,” said Timothy Kaldas, a policy fellow at the Tahrir Institute of Middle East Policy, adding that a number of pre-Ukraine-war problems have already sent shocks to Egypt’s budget.

“They already have a constellation of challenges that this war is just making worse,” he added.

Turkey was hoping to lift the economy back on its feet this year with a recovering tourism industry but the Ukraine crisis and mounting sanctions on Russia are threatening to tear through the $34.5 billion that were expected this year in tourism revenues.

In the seaside resorts of Antalya on the Turkish Riviera, workers in the tourism sector are worried about the receding numbers.

“Russia is the most important market for us, and Ukraine is also coming in as third or fourth,” said Ulkay Atmaca, president of the Professional Hotel Managers Association in Turkey.

Some are hoping for a resolution to the conflict by the summer season, just in time to salvage the industry, but others are far less optimistic.

“We are expecting a 60% to 65% loss in volume,” Nihal Duruk, Sales and Marketing Manager for Premier Palace Hotel in Antalya, told CNN. “Even if a solution is found as of today, we have lost 50% of our expectations for the coming season of 2022,” she added.

More than 2 million Ukrainian tourists arrived in Turkey in 2021, according to data from the tourism ministry, while another 4.7 million came from Russia.

Bahattin Yucel, a former Turkish economy minister, sees the coming losses mounting as the economic crisis triggered by Western sanctions on Russia is expected to affect the Turkish citizen.

“Both [the] war and the economic crisis in Russia will affect us,” said Yucel.

Down the eastern end of the Arabian Peninsula, Russia became Dubai’s second-largest source market in 2021, according to data by the Arabian Travel Market (ATM).

After the UAE began granting Russian travelers a free 30-day visa on arrival in 2018, tourist numbers surged. The number of Russians traveling to Dubai and Abu Dhabi grew by more than 60% in the first eight months of that year, reported the UAE state-owned newspaper The National.

Before the Ukraine war, the ATM forecasted the Russian market to surpass $1 billion for the UAE within the next four years. It declined to comment on whether those projections would be impacted by the conflict.

But a war that could spell doom for some Middle Eastern sectors may be a boon for others. Wealthy Russians seeking a financial haven are pouring money into real estate in Turkey and the UAE, Reuters reported. Both Turkey and the United Arab Emirates offer residency incentives for property buyers.

The hotel sectors, however, don’t see a quick recovery.

“No matter how quick this problem is solved, we will have to suffer the consequences of this crisis for at least three to four years,” said Duruk, the hotelier in Turkey’s Antalia.

Other top Middle East news

Turkish prosecutor seeks to halt trial of Saudi suspects in Khashoggi killing

A Turkish prosecutor asked a court on Thursday to halt the trial in absentia of 26 Saudi suspects over the killing of journalist Jamal Khashoggi in 2018 at the Saudi consulate in Istanbul and transfer the case to Saudi authorities.

• Background: Khashoggi, a critic of Saudi Crown Prince Mohammed bin Salman, was last seen entering the Saudi consulate in Istanbul on Oct. 2, 2018. Turkish officials believe his body was dismembered and removed. His remains have not been found. In September 2020, a Saudi court jailed eight people for between seven and 20 years over the killing in a trial critics said lacked transparency. None of the defendants was named.

• Why it matters: The move comes as Saudi Arabia and Turkey seek to improve ties that significantly impacted after the Khashoggi killing. Turkish foreign minister Mevlüt Çavuşoğlu last week said that his recent talks with the Saudi foreign minister had been “very beneficial and goal-oriented” and would help in normalizing ties, Turkey’s Daily Sabah reported.

UAE distances itself from anti-Iran discourse after Israel summit

The UAE distanced itself from “discourse of confrontation and polarization” vis-a-vis “our neighbor Iran,” Anwar Gargash, adviser to the UAE president, tweeted Wednesday. He said it was part of an approach to building bridges and promoting stability, of which “Iran is a core part.”

• Background: Gargash’s statement comes days after a landmark meeting between some Arab foreign ministers and their Israeli and American counterparts, which Israel labelled as “a new regional architecture” that would “intimidate Iran.” Gargash said in a conference this week that the Middle East is not just about “Israel and Iran.”

• Why it matters: The UAE’s warming relations with Israel have come amid a perception in the Gulf states that Washington isn’t doing enough to address their security concerns. After a meeting with Abu Dhabi crown prince Mohammed bin Zayed on Tuesday, US Secretary of State Antony Blinken said the US is “determined to do everything we can to help you defend yourselves effectively” against terrorism and consult on Iran.

Tunisian president issues decree dissolving parliament

Tunisian President Kais Saied late on Wednesday issued a decree dissolving parliament, which has been suspended since last year, after it defied him by holding an online session and voting to repeal decrees he used to assume near total power. Saied accused MPs of a failed coup and a conspiracy against state security and ordered investigations into them. Saied ruled out early elections on Thursday.

• Background: Saied’s opponents accused him of a coup when he suspended parliament last summer, brushed aside most of the 2014 constitution and moved to rule by decree as he set about remaking the political system. Saied says his actions were constitutional and necessary to save Tunisia from years of political paralysis and economic stagnation at the hands of a corrupt, self-serving elite.

• Why it matters: Any move to arrest parliament members who took part in Wednesday’s session, as Saied’s threat of investigations may imply, would represent a major escalation in the confrontation between Saied and his opponents.

What to watch

The six-month long Expo 2020 Dubai came to a close on March 31, ending the largest global gathering of ideas, culture and talent since the Covid-19 pandemic. However, its legacy lives on in the 140 startups selected to showcase their work by Expo Live.

Watch CNN’s Becky Anderson speak to some of the innovators involved.

Around the region

Food inspectors have quietly been sampling their way through the delicacies that some of Dubai’s 20,000 restaurants have to offer.

Unbeknownst to chefs, these are Michelin inspectors, putting together a Michelin Guide for Dubai, the first place in the Middle East to feature in the popular guidebooks that rate establishments on their excellence.

The Michelin Guide currently covers 35 destinations across the world. Dubai will be its latest addition. Inspectors focus on five criteria to rate eateries: quality of the ingredients, mastery of cooking, harmony of flavors, personality of the chef through the cuisine and consistency both over time and across the entire menu.

The announcement to include Dubai was a cause of great celebration for restaurateurs including the founder of The MAINE New England Brasserie, Joey Ghazal, who runs three restaurants in Dubai and one in London.

“The introduction of Michelin into Dubai is going to change the dining landscape,” he says, pointing to increased property rental, an uptick in hotel bookings as well as attraction and retention of better culinary talent.

The Lebanese-Canadian restaurateur says the guide can help establish Dubai as a serious culinary contender. “Look at it through the lens of regional cuisines… Regionally, we have an opportunity to make our food standout, whether it’s Levantine, pan-Arab or Persian.”

By Tasmiyah Randeree, CNN

Photo of the day

Libyan authorities on Thursday said they received nine ancient artifacts that were returned by the United States after being smuggled out of the North African country, including the marble “Veiled Head of a Lady,” ancient urns and pottery. Libya has a wealth of archaeological treasures and sites, many of which were looted after the 2011 NATO-backed uprising and the chaos that followed.

Top image: Tourists ride camels to view the Giza Pyramids in Giza, Egypt, on Oct. 21, 2021 (Credit: Getty)