The Middle East is experiencing a notable drop in international tourist arrivals as a result of regional instability but a rebound will happen, Deloitte said on Sunday.
While mergers and acquisitions in the Middle East hospitality sector suffered in the first quarter of 2011 as a result of regional tensions, the deal volume will gradually pick up over the next two years, the report added.
Its new travel and tourism report also predicted that growth was expected to stabilise from 2012 at growth rate of four percent per annum.
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"While there will be uncertainty in the short to medium term, the fundamentals for travel and tourism growth in the Middle East region are strong and will prevail to assure long-term sustainability of the market", said Alex Kyriakidis, Deloitte Global managing director, Travel, Hospitality and Leisure.
"The continuing investment in word-class infrastructure in numerous countries within the Middle East exudes optimism pertaining to the performance of the hospitality and tourism industries," he added.
The report said optimism for the future was driven by the fact that the Middle East "leads the world in investment in hospitality infrastructure, such as the Burj Khalifa in Dubai and the Formula 1 theme park in Abu Dhabi".
It added that the region also boasts the world's highest passenger traffic. In 2010 indicators such as revenue passenger kilometer (RPK) and available seat passenger (ASK) experienced growth at the rates of 17.8 percent and 13.20 percent respectively.
"This trend is expected to continue as airport capacity in regional hubs is expanding," the report said.
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