Growing Tourism and Travel Industry in Pakistan

[Riaz Haq]

Pakistan's travel and tourism industry is booming with significant improvement in security situation. In 2015, it contributed 7% of Pakistan's GDP.  It includes foreign and domestic travel and tourism spending or employment in the equivalent economy-wide concept in the published national income accounts or labour market statistics.

There are are multiple indicators showing this industry will contribute more this year. Growth in air travel and hotel occupancy are among the top indicators of travel and travel and tourism industry growth.

Pakistan Hotel Occupancy Source: Express Tribune

Hotel Occupancy:

“The rate of hotel occupancy has surged to 80% across the country compared to 35% before the current calendar year started,” said Beach Luxury Hotel Director Business Development Rehan Wahid, according to report in the Express Tribune newspaper. “Hotels in Islamabad and Lahore are fully booked most of the days. However, this is yet to happen in Karachi,” he said.

Thanks to the ramp-up of China-Pakistan Economic Corridor  (CPEC) related projects, Gwadar is leading the way for new hotel construction with permits issued for least 5 new 5-star hotels so far in the new port city.   These include a 250-room hotel apartment project of the management of Pearl Continental Hotels and another one of the Bahria Group. Gwadar Airport growth of 73% was the fastest of all airports in Pakistan.

Air Travel: 

Pakistan air travel market is among the fastest growing in the world.  IATA (International Air Transport Association) forecasts Pakistan domestic air travel will grow at least 9.5% per year, more than 2X faster than the world average annual growth rate of 4.1% over the next 20 years. The Indian and Brazilian domestic markets will grow at 6.9% and 5.4% respectively.

Pakistan saw 23% growth in airline passengers in 2015, according to Anna Aero publication. Several new airports began operations or expanded and each saw double digit growth in passengers. However,  Gwadar Airport growth of 73% was the fastest of all airports in Pakistan.

The top 12 airports all saw large double digit increases. Multan  grew 64%, Quetta 62% and Faisalabad +61% all climbing one place as a result of all of them seeing a growth of over 60%. Turbat Airport in Balochistan is the newest airport to reach the top 12 in terms of traffic.

Security Situation: 

The key reason for travel and tourism boom is significant improvement in the security situation since the launch of Pakistan Army anti-terror campaign called Zarb-e-Azb. Civilian deaths have been cut from 2,378 in 2011 to 412 this year until August 14, 2016. Total number of deaths, including civilians and security personnel, have been reduced from 11,704 in 2009 to 1232 so far in 2016, according to South Asia Terrorism Portal (SATP.org)

Terrorism-Related Deaths in Pakistan Source: South Asia Terrorism P...

Summary:

Hotel occupancy rates have risen from just 35% in 2015 to 80% this year. Air travel is growing rapidly with IATA forecasting Pakistan to be among the world's fastest growing air travel markets. All airports in the country, including several new ones, are seeing double digit increases in the number of passengers flying in and out of them. Improved security since the start of Operation Zarb e Azb and political stability are underpinning growing confidence in Pakistan.

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[Riaz Haq]

A new runway at Faisalabad International Airport will be completed by October this year, enabling Boeing 777 aircraft to land, said Airport Manager Muhammad Anwar Zia.


Addressing Faisalabad Chamber of Commerce and Industry (FCCI) here on Thursday, he added that the air cargo complex was also under construction and 75% of the work was expected to be completed before the runway becomes operational.

Zia expressed satisfaction over the available passenger load and air cargo and said that 102 domestic and international flights were successfully operating from Faisalabad airport.

Zia expressed satisfaction over the available passenger load and air cargo and said that 102 domestic and international flights were successfully operating from Faisalabad airport.

He said the old runway could only accommodate small planes, which prompted authorities to construct a new runway for wide-bodied aircraft, in view of the projected increase of passengers and air cargo from the city and its catchment areas.

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The new runway will be completed by October this year, enabling Boeing 777 to land at Faisalabad International Airport.

This was stated by airport manager Muhammad Anwar Zia at a meeting with FCCI officials on Thursday.

He said the air cargo complex was also under construction and 75 per cent of the work would be completed before the runway becomes operational.

He expressed satisfaction over the available passenger load and air cargo and said the airport was in a deficit of Rs220 million when he was posted here.

“It is now earning a profit of Rs2 billion,” he said and added that presently 102 domestic and international flights are operating from this airport facility in a month. He said that only small planes could land on the old runway, prompting authorities to construct a new runway.

He said a study was conducted to evaluate the passenger load before contacting international airlines. At that time the available passenger load was only 70,000 which jumped to 500,000 and is now expected to cross the mark of 800,000 within the next few years. He said that in a similar pattern, we must calculate the available tonnage of air cargo so that the airlines could be convinced to launch a dedicated air cargo service from this port.

He asked the FCCI to share data on air cargo so that a comprehensive study could be finalised. Four planes can be parked at a time and more facilities will also be arranged after calculating the passengers and air cargo shipments, he said.

https://www.dawn.com/news/1696356/faisalabad-airport-to-get-new-runway

[Riaz Haq]

Pakistan Institute of Development Economics (PIDE)
@PIDEpk
Hotel & restaurant industries of Pakistan seem to be in their incubation phase – with significant room for improvement, particularly if the country wishes to keep up with global trends. KB by
@AbbasMoosvi
&
@syedtalhaali922

https://twitter.com/PIDEpk/status/1554784076678176768?s=20&t=Xm...

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The tourism and hospitality industry has been rising in significance in Pakistan over the past few years, contributing 5.9% to national GDP and generating 3.8 million jobs in the year 2019. In terms of growth rates, this industry expanded by 3.5% in the same year, compared to the 2.5% expansion of the Pakistani economy as a whole.

Considering the general growth of the tourism and hospitality industry of Pakistan, the Pakistan Institute of Development Economics carried out a series of focus group discussions and collected data via questionnaires with key stakeholders in the restaurant and tourism sectors – two of the primary contributors to the hospitality and tourism industry – to ascertain salient bottlenecks in these markets and how they can be corrected.

1.Introduction and Overview

The tourism and hospitality industry constitutes a significant portion of global trade and investment. In 2019, it made up 10.4% of global GDP and supported 334 million jobs – amounting to approximately 1/10 of the international workforce.

During the 2014-2019 period, the industry was responsible for a whopping ¼ of all new jobs created – indicating a thriving demand for the service around the world. In terms of tourist expenditures, the majority – i.e. 71.7% – go to domestic services, signifying a general preference for local options.

In the Asia-Pacific region, of which Pakistan is a part, the GDP arising from tourism and hospitality stood at USD 3.061 trillion in the year 2019 – and generated approximately 185.1 million jobs. It was the highest performing region in terms of annual growth of the industry worldwide.

In the subsequent year, the tourism and hospitality industry took a significant hit around the world – leading to the loss of 62 million jobs, an aggregate decline of 18.5%. The brunt of the impact was absorbed by the SME sector, which constituted 80% of enterprises in the industry.

https://pide.org.pk/research/hotel-and-restaurant-industries-of-pak...

[Riaz Haq]

Pakistan plans to privatise its loss-making national carrier Pakistan International Airlines (PIAa.PSX), the government said on Monday, as the country also seeks to outsource its airport operations in line with an IMF deal.

https://www.reuters.com/business/aerospace-defense/pakistan-privati...

The privatisation decision was taken at a meeting of the Cabinet Committee of Privatisation chaired by Finance Minister Ishaq Dar.

The committee "after deliberation decided to include Pakistan International Airlines Co. Ltd in the list of active privatisation projects of the ongoing privatisation programme, following an amendment in the law by the Parliament," a finance ministry statement said.

The committee also backed the hiring of a financial adviser to process the transaction of Roosevelt Hotel, New York, an asset of the PIAInvestment Limited, it added.

Pakistan hopes to resume PIA flights to Britain in the next three months after services were suspended following a fake pilot scandal.

The PIA flights to Europe and the UK have been suspended since 2020 after the European Union's Aviation Safety Agency revoked the national carrier's authorisation to fly to the bloc following the pilot licence scandal.

The privatisation of a state-owned enterprise, the PIA, which has accumulated hundreds of billions of rupee in losses and arrears, comes after Pakistan agreed to fiscal discipline plans with the International Monetary Fund.

Pakistan secured a $3 billion IMF bailout in June.

Reporting by Asif Shahzad in Islamabad and Baranjot Kaur in Bengaluru Editing by David Goodman, Mark Potter and Alistair Bell

[Riaz Haq]

Boost to tourism: First international flight lands at Skardu airport
In a touching gesture, the captain of the flight opened a window and proudly hoisted the national flag

https://www.thenews.com.pk/print/1100304-boost-to-tourism-first-int...


SKARDU: A historic moment unfolded at Skardu International Airport as flight PK 234 touched down, marking it the first-ever international flight to land on Skardu soil.

The arrival was celebrated with a heartwarming water cannon salute, painting the skies with a majestic display of water arcs.

In a touching gesture, the captain of the flight opened a window and proudly hoisted the national flag, symbolising the unity and pride of the nation. Traditional hats and thoughtful gifts were joyously distributed among the passengers aboard the inaugural flight, setting the tone for a remarkable journey.

While the initial tourist count was modest, with only 80 passengers on this milestone flight, officials from the national airline revealed that these travelers had embarked on a journey from Dubai to Skardu, making a connecting stop at Skardu. This strategic connection is expected to pave the way for an influx of tourists, injecting new life into the local tourism industry.

The residents of Skardu are excited at this as a momentous step towards boosting the region’s tourism. With Skardu being renowned for its breathtaking landscapes and rich cultural heritage, the commencement of international flights is anticipated to open doors to a world of opportunities.

The successful landing of the first international flight on the auspicious occasion of Independence Day has added an extra layer of jubilation to the festivities.

[Riaz Haq]

Airline seeks flights to smaller cities

https://tribune.com.pk/story/2501376/airline-seeks-flights-to-small...


KARACHI:
A domestic airline already operating in Pakistan has sought approval from the CAA to launch flights to smaller airports using low-capacity aircraft.

The move aims to provide air travel options for passengers currently relying on buses, trains, and cars for long journeys from the North to the South of the country.

During a press conference on Monday, Director General of the CAA Nadir Shafi Dar addressed several matters concerning Pakistan's aviation sector. It was his first formal media briefing since the CAA's recent restructuring into two divisions.

Dar announced that airports in smaller cities, including Sukkur, Multan, Faisalabad, and Sialkot, and more remote regions like Gwadar, Gilgit, and Skardu, would soon offer regular air services.

An existing airline has already requested permission to operate small aircraft on these routes, with plans to introduce flights for up to 40 to 50 passengers by early 2025.

The airline will initially deploy at least three small aircraft, with services expected to begin in the second quarter of 2025.

The DG further expressed optimism that more airlines would follow suit, boosting air connectivity for primary and secondary airports across the country.

"Currently, about 30 million passengers travel from the North to the South annually by bus, train, or car. If the airline sets reasonable fares, this route could become commercially viable," said Dar.

He also provided an update on PIA, saying that an audit of all national airline aircraft had been initiated following several incidents of technical landings and other issues.