US bans to dominate Arabian Travel Market

Emirates airline cut five of its services to the US last week, citing a 'significant' fall-off in passenger demand.

Emirates cut five of its services to the US last week, citing a ‘significant’ fall-off in passenger demand. Mark Ralston / AFP

This year’s Arabian Travel Market (ATM), which begins on Monday, is likely to be dominated by the impact of the current US administration’s moves to slow travel between the Middle East and the United States.

Emirates cut five of its services to the US last week, citing a “significant” fall-off in passenger demand after Dubai was one of 10 cities affected by a ban on laptops and other personal electronics in carry-on luggage aboard US-bound flights.

Hotel operators are also feeling the effect of the electronics and travel bans. The head of Marriott International, the world’s largest hotel operator, recently said travel between the Mena region and the US was down by 20 per cent since the orders were signed. The US president Donald Trump has issued two travel bans on people from six Middle East countries. His original ban applied to seven Muslim-majority nations but it was revised after legal challenges. The second, which dropped Iraq from its banned list and now targets Iran, Libya, Somalia, Sudan, Syria and Yemen. That, too, was halted by a legal challenge and now faces an appeal on May 15.

“The travel ban imposed by the US and the laptop ban imposed by US and UK on selected Middle East countries are beginning to show negative impacts on the travel demand to these countries,” said Rashid Aboobacker, the associate director of TRI Consulting. “The latest reduction of flights by Emirates to selected US cities citing weakened demand highlights the impact of the ban on travel demand from the region. As many experts consider the laptop ban as more politically driven than security concerns, we believe that the ban may be lifted sooner rather than later.”

While the US administration’s moves have increased pressure on the region’s carriers, the UAE’s hospitality sector is in rude health. Dubai attracted 14.9 million tourist arrivals in 2016, an increase of 4.9 per cent on a year earlier and more than 4.4 million visitors were recorded in Abu Dhabi in 2016, setting a new annual record, an 8 per cent increase over the previous year. However, indicators in the capital for four and five-star hotels showed negative trends in 2016. Occupancy was down from 75.3 per cent in 2015 to 72.8 per cent in 2016 and average room rate (ARR) was down 10 per cent to US$137.6, according to STR.

“The travel and electronics bans will have an impact but the UAE and wider region is used to handling pressure,” said Philip Wooller, STR’s Middle East and Africa director. He said even with events such as the Arab Spring, the global financial crisis, international and civil wars, the Mena region has been remarkably robust.

“I am surprised Emirates have cut services because once you cut services it’s hard to get them back,” Mr Wooller said.

“However, the fact that people have stopped travelling to the US means other parts of the world will benefit.”

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