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00:02This is Apropos. Worth some $367 billion annually to the region, tourism to the Middle East is
00:10taking a hit from the widening conflict, putting at risk its carefully constructed image as a safe
00:16and high-end holiday hotspot. Flights at major hubs, including Dubai, the world's busiest
00:22international airport, have been largely grounded, stranding hundreds of thousands of passengers
00:27in the worst crisis for air travel since the Covid pandemic. With more on the potential impact
00:33on tourism in the Gulf States, here's Luke Schreger. For decades, the Gulf States have been an oasis of
00:41calm in a region more often troubled by geopolitical upheaval. That illusion came to an end last
00:47weekend. We were on a boat when all the missiles started firing and this is when we found out that
00:53the Fairmont Hotel had been hit, which was absolutely terrifying and there was just like
00:57missile after missile like coming from the sky. We basically were then evacuated by the hotel and we
01:02had to stay in the basement at like two o'clock in the morning. As the US and Israel went
01:09to war on
01:10Iran, nations like the United Arab Emirates and Qatar found themselves the targets of retaliatory strikes
01:17that hit not just oil and gas infrastructure, but the very psychological foundations of the idea
01:23that it had been somewhere to do business in safety. With the UAE, you look at this, what is it
01:28trying to do? In Dubai, it's trying a diversified economy. It's going away from oil and gas. That's
01:33the airport. That is the hotels. In Bahrain too. Bahrain is a hub regionally with hotels and real estate
01:40being part of the economy. And that's what's being struck. In nearly 45 years, Dubai's population
01:47swelled from one to 11 million as its leaders left resource extraction to neighboring Abu Dhabi
01:53with over 90 percent of the UAE's oil reserves. Dubai branched into financial services, real estate
01:59and, like nearby Qatar, travel. Its airport is the busiest international transit hub in the entire
02:06world. One now at a virtual standstill with tens of thousands stranded in the region.
02:12By blocking that airspace, you ultimately block global connectivity of people, of trade, of economic
02:19engagement and of global stability. When it comes to global travel especially, trust and confidence are
02:27the main currencies and this has broken that. Bahrain took the mantle of the Middle East's financial
02:32capital from Beirut in the 1970s as that city fell into civil war before Dubai outpaced it.
02:39As Iran continues attacking its neighbors, only time will yet tell how permanent the damage to
02:45the Gulf state's reputation will be.
02:48Well, for more, we're joined now by one of the contributors to that report,
02:53Anita Mendirata, travel, aviation and tourism consultant. Anita, thanks so much for being with us on
03:00the program. As you were saying there in that report, trust and confidence, they're the main
03:05currencies when it comes to the situation, particularly for Dubai. Just talk to us a little
03:11bit about what longer-term impact all of this might have for the tourism industry in the Middle East.
03:20Indeed, and thank you very much for having me back this evening. I think what's really important about
03:24what we're talking about is that we have Dubai and Qatar, for instance, Bahrain, not only the Middle
03:30East in terms of destinations, but also critical flying routes. So there are airlines that are flying
03:36into the Middle East, but also those that are going through Middle Eastern airspace. The confidence
03:41around that has been fundamentally broken. And so this is going to have a longer-term impact,
03:47impact not only on the destinations, but also on the aviation sector as a whole. The sad thing is that
03:53Dubai really did lead the charge for the region in trying to diversify off of oil. They've been doing
03:59it for many years. 25% of Dubai's GDP comes from travel and trade itself. And we've seen other nations
04:06around the region follow that model. So Saudi Arabia most recently. For all of them, this is going to be
04:12very
04:13bruising because ultimately when someone is traveling, whether it's for leisure or business,
04:18the ability to feel that you can trust you are safe in a place is fundamentally important. And now,
04:24by implication, we have significant reconsideration. Yeah, because Dubai, its modern identity really,
04:29it's built on being insulated from these kinds of conflicts. Authorities there and in the UAE more widely,
04:36they've moved quickly to try to contain the damage to confidence. But what exactly can they do to ensure
04:42that tourism does continue, that people visiting do feel safe and also for businesses as well,
04:48that it remains a reliable and dependable partner?
04:53Dubai is an excellent example internationally, admittedly, of crisis leadership. And this is where
04:59it's really important that the airports, the airlines and the Tourism Development Authority
05:03work very closely in the best of times and in situations like this in the worst of times.
05:09So they have a very strong ecosystem of response. As soon as the challenges happened in the UAE,
05:15the government put out notification to make it very clear that accommodation was priority number
05:21one when it came to taking care of travelers. All of the costs would be absorbed. It was about
05:26making sure that people were in safe places. When we look at Dubai airports, they were used to having
05:311,200 flights a day going through the airport, but a quarter of a million people. And that's gone down
05:37to
05:37roughly about 80 flights per day, only because it's about airlines being able to utilize
05:42safe corridors through that Middle Eastern airspace. And in no way is this the regular schedule of
05:49flights. This is repatriation flights. But once again, the leadership at Dubai airports, the CEO,
05:55Paul Griffiths, is an outstanding leader when it comes to crisis. He works very well with his teams
06:00to really mobilize in a way that supports the airline and the tourism authority in being able
06:05to keep people safe and moving onwards as safely and swiftly as they can. But sadly, right now, as we
06:12know, the situation in the Gulf is escalating. So speed is something that we cannot take for granted in any
06:18way. They're trying to very carefully manage these safe corridors, but we are in a situation where every
06:24single hour the situation is changing. And therefore, it really is about making sure that safety comes
06:31first. And Anita, I know you yourself were actually caught up in this chaos over the past few days.
06:37Hundreds of thousands of people have been stranded right around the world. Just how frustrating,
06:42and I presume also anxiety-inducing, is this for air passengers?
06:48Indeed. It is unnerving when you find out that you're somewhere in the world and your flight has been
06:53cancelled even though you're going nowhere near the land of the area that's in the situation of
06:58conflict. So in my case, for instance, I was in Delhi on business trying to get back to London on
07:03Sunday.
07:04I've only just returned this evening because to be able to travel west, I needed to pivot far east.
07:10So I immediately jumped on a plane going from Delhi to Bangkok, then went Bangkok to China yesterday,
07:17and made my way back to London today. So it took a long route. The important thing is that
07:22it made my heart break for the tens of thousands and now hundreds of thousands of passengers who
07:28don't necessarily have the knowledge of how aviation works and how one can pivot, who don't have the
07:34ability or the finances to be able to make quick decisions. So when you're surrounded on the ground,
07:40the vulnerability, the feeling of being completely isolated is incredibly high. The first and most
07:46important thing that people need to do is to make sure that they're registered with their foreign
07:51officers, offices, so that their foreign governments know exactly who they are, where they are, and that
07:57they're in a situation where they need to be able to get home safely. Then when it's safe to do
08:02so, the
08:03airlines will work with the national governments to be able to provide those repatriation flights. But again,
08:09it's very much about safe corridors. And we know that the conflict has expanded from where it was three days
08:15ago,
08:15now spreading into Saudi Arabia, sadly, now spreading into Turkey, which was a significant repatriation
08:22hub to be able to allow an alternative for flights that are diverted. So it's this is a very, very
08:29tricky
08:29game of calculus to be able to work out how people can move safely. If one is in safe shelter,
08:36if they're
08:36in safe accommodation, stay put, stay hopeful, and stay ready for when your governments and the airlines turn
08:43up to you and say, it's time to go home. Anita, because of the war in Ukraine, we've seen that
08:48many,
08:49if not all Western airlines, they've already been avoiding Russian airspace, for example.
08:55Is it inevitable now, given this chaos, we don't know when the situation is going to
08:59have calmed down. Is it inevitable that ticket prices, for example, are going to rise for passengers,
09:04not just those intending to fly to the Middle East, but this is likely to have a knock on effect
09:10far wider than that region? There's a very strong hypothesis that you're 100% correct
09:17for a couple of reasons. Firstly, there is no longer the capacity. We've lost a significant
09:22amount of capacity by losing airlines like Etihad, Emirates, and Qatar Airways as the throughput
09:29through the world. If we think about it, 30%, roughly 30% of travel from west to east, east to
09:36west,
09:36goes through that Middle Eastern corridor. That now has been locked. So other airlines are indeed
09:42gaining in terms of being able to bring on the extra passengers. But increasingly as well, the lower
09:48capacity means higher cost. We know the price of fuel has gone up. And for airlines that are still
09:54wanting to go east, west, west, east, but avoid that Middle Eastern strip, they have to go far north
10:00or far south, which is extra fuel, extra time, extra pressure on the airlines. Naturally, this will
10:07trickle down to both travelers and also cargo customers, because in all of those aircraft,
10:14there's also cargo in the belly of the planes, especially perishables like pharmaceuticals,
10:20electronics and naturally agricultural perishables. So we can anticipate there's going to be an
10:25increase. And sadly, I believe this is going to carry us into the summer as we know the conflict is
10:31no close at all to any resolution and the ripple effects in confidence levels are going to continue
10:38through the year. So in that case, would you be advising people not travel at all over the coming
10:43months, even if they aren't planning trips specifically to the Middle East?
10:49It's a very interesting point that you make, because we've seen coming out of COVID that there's been a
10:54dramatic surge in the amount of travel, as people have desperately needed to travel. As much as we can
10:59Zoom and we can do our Teams meetings, people need that human connection. So they will simply find
11:05alternatives, alternative destinations, alternative airline routes, because people still need to get away.
11:11So travel will continue, momentum will continue. It's just unfortunate that in the short to medium
11:18term, a significant part of the world and the world's hospitality, not only connectivity is going
11:24to be reconsidered, as people just don't feel necessarily comfortable traveling in that direction.
11:30And also when it comes to their insurance policies, even if people do have plans for the next few months,
11:37because we're talking about act of war, civil unrest, that type of thing, they're normally excluded from
11:43insurance policies, aren't they? How does that work?
11:46You're absolutely right. And importantly, if they're not excluded from insurance policies,
11:51so for instance, tour operators just cancelling the policies for tours, so making it impossible to
11:56travel, insurance costs have increased. Insurance costs are increasing for passengers,
12:02for travelers who are trying to move, and also for cargo, because with the Strait of Hormuz also now
12:07blocked off, that's going to increase pressure on air cargo movements so that trade can continue around
12:14the world. And without question, that's going to increase. So insurance is increasing, fuel is increasing,
12:20the end result is going to be the cost of travel and the cost of trade is going to increase.
12:24And it's not just passengers that are blocked, of course. You might forget that crew and aircraft
12:29are also scattered around the world right now. How long is it going to take to kind of get that
12:33backlog cleared? That's a fundamentally important point that you mentioned, and that's where when
12:39it comes to the airlines and the airports, it's very much about getting aircraft repositioned where
12:44it needs to be along with the crews, and then moving people first and foremost as repatriation flights.
12:50It's going to take probably about seven to ten days, I would anticipate, but that is simply a hypothesis
12:56based on today. Tomorrow morning, it might be a very different and difficult situation.
13:02When it then comes to actually getting things moving again, we're probably looking at about two weeks,
13:07and that's purely a hypothesis for the schedules to be able to start to creep back in.
13:12Because again, we know that even though we have a slight degree of air movement coming out of, for instance,
13:17Dubai International Airport, that is very, very limited, and it is not scheduled flights. These are repatriation flights
13:24and repositioning flights. There's still a huge amount of work that needs to be done for safe corridors
13:30across that entire region, which, as I said earlier, is only increasing in terms of military activity,
13:37which is not a good sign at all to be able to allow commercial aircraft to take off again.
13:41Anita, thanks so much for being with us on the program. That's Anita Menderato, Travel Aviation and Tourism Consultant.
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