DUBAI - Tourism industry executives from across the world arrived in Dubai this week to bask in the warm sunshine of an economic recovery that has driven up air travel demand and hotel occupancy, but with dark clouds on the horizon worries remain whether the gains can be sustained.
"It is early days of improvement but we are beginning to see light at the end of the tunnel," said John Podaras.
Air passenger traffic and hotel occupancy worldwide turned a corner in the first quarter after one of the worst years for the tourism industry in living memory as the global recession saw consumers cut back.
The Middle East has spearheaded the recovery with airlines witnessing double-digit growth in passenger and freight demand and hotels seeing increases in revenues and occupancy in February and March.
The U.N. World Tourism Organisation said last month visitor arrivals in Morocco, Egypt and Saudi Arabia suggested "a strong rebound" in the region.
"There are signs of the crisis levelling off. The overall picture we reckon is that March is going to be the end of the rapid downward trend," said regional chief executive officer, Mark Wynne Smith.
"It looks like the rest of 2010 is going to be stable, which means the demand will be consistently better than last year," he added.
UNEVEN RECOVERY: But the Middle East recovery remains uneven - with leisure destinations doing better than those dependent on business travel - and tourism industry executives will be hoping this week's flagship travel exhibition in Dubai raises their profile among the region's influential travel agents and tour operators.
"The region as a whole was booming earlier, but it is a mixed picture now," said Guy Wilkinson, general manager of UAE-based hospitality consulting firm.
Some 960 exhibitors from 72 countries are expected at the Arabian Travel Market expo that kicks off on Tuesday, seen as a barometre of the Middle East travel industry.
Organiser Reed Travel Exhibitions said the figures are a 15 percent increase from last year's show as exhibitors return after "a leave of absence" during the global recession.
"It is also extremely positive to see exhibitors returning after a leave of absence as well as the addition of new-to-market delegations, which only further reiterates the Middle East's business potential," said Mark Walsh, group exhibition director at Reed Travel Exhibitions.
PROJECTS RESTART : The global recession saw countless tourism projects put on the back burner, no more so than in the Dubai, the region's tourism hub, where tens of billions of dollars worth of construction projects have been put on hold.
But the relative market stability has seen investors look to restart projects, although tight bank credit conditions are still hampering recovery.
"The liquidity is not there so we have seen very few new projects but the market had finally reached a point where people could not just sit and do nothing. They are resuscitating some projects and refining them," said Podaras.
The Middle East and Africa hotel development pipeline includes 473 hotels comprising 127,952 rooms, but only half of these rooms are under construction, according to the latest figures from research firm STR Global.
The United Arab Emirates accounts for the bulk of the pipeline with 53,477 rooms, 26,868 of which are under construction.
Sarmad Zok, chief executive officer of a top Saudi-based luxury property developer, said the industry has "seen the worst" of the credit crisis.
"I think it is going to take another six months before the lenders start becoming more active on acquisition financing. It is a gradual process, it is linked to things that are beyond our control but the sentiment is pretty optimistic," Zok said.
DARK CLOUDS LOOM : However, industry experts cautioned the recovery was still fragile and could be derailed by external economic factors in Europe and the United States, key source markets for Middle East tourism, that could weigh on consumer confidence.
"This is going to be a long and steady recovery (for Middle Eastern tourism)," said Smith.
"There are two big worries: the CMBS (commercial mortgage-backed securities) market in the U.S., because there is a long loan overhang there, and the second one is Greece. I think there is a lot of macro uncertainty there."
Markets reacted sceptically on Monday to a record 110 billion euro bailout for Greece, with investors doubting it would offer more than temporary relief to a euro zone shaken by divisions and saddled with high debt.
Euro zone ministers on Sunday approved a three-year package of emergency loans for Greece in exchange for further spending cuts and tax increases totalling 30 billion euros over three years on top of tough measures already taken by the country's government.
