INCREASED TOURISM SPURS NEW DEVELOPMENTS IN KUWAITDR. EHSAN BAYAT

INCREASED TOURISM SPURS NEW DEVELOPMENTS IN KUWAIT

• The real estate market in Kuwait rebounded during the early months of 2016. Commercial sales surpassed residential sales, loans for apartments and villas increased, and sales of investment properties rose. Additionally, the housing shortage has abated in recent months following a two-year dearth, with thousands of units in the pipeline for delivery by 2020.

• With the commercial and residential segments of the market on the rise, Kuwait is seeking to diversify its economy by investing in tourism. Previously, the oil industry generated significant cash flow in amounts that left tourism low on the priority list for investors and developers for the most part, except in countries such as Qatar and the UAE. Given the current status of oil, however, tourism has moved to the forefront.

INCREASED TOURISM SPURS NEW DEVELOPMENTS IN KUWAIT (CONT.)

• Estimates from the World Travel and Tourism Council (WTTC) place growth in Kuwaiti tourism investment at 10.8 percent in 2016 alone, and spending is slated to hit 10 figures by 2025. In 2015, travel and tourism accounted for about 2 percent of the GDP, and it should increase by nearly 7 percent in 2016.

• Compared to other markets in the Middle East, Kuwait is performing consistently with regard to its tourism metrics. Optimism for the future of the coastal country abounds, and support for the shift in tourism investment has come from both the public and private sectors.

INCREASED TOURISM SPURS NEW DEVELOPMENTS IN KUWAIT (CONT.)

• A ministry dedicated solely to tourism does not currently exist in Kuwait. However, the Kuwaiti government plans to establish a Supreme Commission for Tourism. Public leaders have announced a project to develop a series of islands to attract millions of tourists. In addition to bringing money into the economy, this and projects similar to it in scope are expected to create thousands of jobs.

• Hospitality professionals also recognize the opportunity to bring in more leisure and business tourists. Large and mid-market brands are benefiting from demand across the board for both luxury and affordable accommodations. Hotel development is expected to play a crucial role in boosting tourism. In addition, new cultural centers are expected to bring in more tourists.

NEW CULTURAL CENTERS IN KUWAIT

• In 2016, the Sheikh Jaber al Ahmad Cultural Center (SJACC) opened to the public. The new facility features a wide range of performing arts theaters and concert halls, as well as conference rooms, exhibition space, and a library. Combined with the Sheikh Abdullah Al Salem Cultural Centre, a project still in development, SJACC will serve as the national cultural district of Kuwait.

• Designers of the new district, which should reach full completion by 2020, based their work off of Islamic architecture. Tourists and residents alike will have an opportunity to attend performances of all kinds, including opera, presented by some of the best musicians in the world.

GROWTH IN THE KUWAITI HOTEL LANDSCAPE

• A prime location in the Gulf, pearl diving adventures, and the burgeoning medical research community are a few reasons why Kuwait is catching the eyes of travelers. Hotel brands ranging from Novotel Sharq to the Four Seasons are actively building up their presence in Kuwait to compete for incoming business.

• The Avenues Mall, the largest mall in Kuwait, will soon become home to two new Hilton hotels: Hilton Conrad Hotels & Resorts and Hilton Garden Inn Kuwait. Together, these properties will add nearly 600 rooms, all in response to the expected increase in traffic from the mall expanding its outlet space by more than 40 percent.

GROWTH IN THE KUWAITI HOTEL LANDSCAPE (CONT.)

• Hilton executives hope to build their own brand in Kuwait City and to help Kuwait gain greater standing as an international tourism destination. Next to the Hilton Kuwait Resort and the forthcoming Hilton Olympia Kuwait, these two new properties will provide balance in the mid-range market when they open in 2019.

• Other anticipated additions to the Kuwaiti hotel market include the Four Seasons at Burj Alshaya (2016), the Mercure Kuwait (2017), and the Grand Hyatt (2020). In the mid-range market, the Novotel Sharq and its 160 rooms will open in 2017, followed by the 200-room Centre Rotana in 2018.

KUWAIT INTERNATIONAL AIRPORT LAUNCHES TERMINAL EXPANSION

• The number of tourists arriving at the Kuwait International Airport (KIA) is expected to nearly double in the coming years, according to the WTTC. In order to accommodate this anticipated growth, the Public Works Minister of Kuwait recently signed a contract to expand airport capacity with an added terminal.

• Limak Insaat, a Turkish real estate developer, won the bid to build the structure, and Foster & Partner will head up the design components. Altogether, the terminal will add 51 gates and nearly triple the current capacity of the airport, positioning it for an annual passenger capacity of 25 million.

• The project will move forward at a cost of $4.4 billion, and developers of the 708,000-square-meter structure hope to achieve LEED Gold status for sustainability. Construction is expected to produce about 5,000 jobs. The KIA addition, which should open by 2022, is expected to accommodate any type of aircraft.