UAE Nationals can now travel visa-free to any of the Schengen countries. In the deal signed between the UAE and the European Parliament earlier this month, the only document Emiratis now need to enter 34 European nations is a valid passport.

The waiver allows UAE Nationals to travel hassle-free through the 26 Schengen countries, as well as eight non-Schengen states. For those not in the know, the Schengen area refers to countries in Europe that have abolished passport or border controls at their common borders. This includes nations such as Germany, Belgium and the Netherlands.

The new travel rules came into effect on May 7 2015 with UAE tourists able to stay visa-free in their destination for up to 90 days in any given 180-day period. The Emirates is the first Arab country to be granted free entry to the Schengen zone.

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Boosting tourism and trade

While the agreement is a major diplomatic boon for the Emirates – it also has major implications for the tourism, trade, banking and insurance sectors.

Mix visa-free travel with a weak Euro, cheaper flights due to the falling oil price and the upcoming summer season – the traditional time UAE Nationals head to Europe – and there’s every reason to see a surge in tourism figures as early as June.

This is part of why the agreement came about in the first place. Mohammed Mir Al Raissi, the Undersecretary of the Ministry of Foreign Affairs, said factors behind the decision included the growing trade exchange, tourism and the increasing number of flights between the UAE and EU.

Expected visits to increase

Several thousand Emiratis visit Europe every summer. Government data reveals there are 500 airline trips between the Emirates and the EU every week – a figure expected to increase following the new ruling.

According to Switzerland’s Tourism Director, Matthia Albecht, the UAE is the nation’s strongest market in the GCC with 36 per cent of travelers coming from the Emirates – a figure he expects to rise following the new rulings.

Greece, a country dogged in recent years by political and economic woes, receives more than 300,000 GCC visitors every year, according to George Daskalakis, Vice-President of Greece’s Hellenic Association of Travel & Tourist Agencies, with UAE tourists accounting for 25 per cent – a figure he expects to grow by 50 per cent following the visa waiver announcement.

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Spending trends

And the German National Tourist Office says Gulf tourists to Germany are among its highest spenders. In 2013, Gulf tourists accounted for 1.5 million overnight stays, an increase of 20 percent on 2012; experts now forecast that figure to increase further.

Investment and trade between both Germany and the UAE amounted to more than US$8 billion (D29bn) in 2014 with the UAE becoming Germany’s second-biggest trade partner. Government data like this highlights the positive implications the new rules will have on trade relations.

Interestingly, while UAE Nationals have traditionally sought medical treatment in European nations, such as Germany, the visa waiver may not have an effect on that trend due to the expansion and upgrading of medical facilities here.

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Dubai Health Authority, for example, aims to attract 500,000 medical tourists a year by 2020 and there are hopes the increasing number of UAE hospitals offering more specialsed treatments will prevent outbound medical tourism.

There are, however, obvious benefits for the banking and insurance sector. Credit cards offering preferential foreign exchange fees on overseas transactions will be more in demand along with cards offering travel privileges such as air miles and airport lounge access. Naturally, demand for travel insurance should also rise.

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There may also be heightened interest in travel and education loans as the community cashes in on the opportunity to explore and study in European nations. As the impact of the new ruling takes effect, the decision to grant the UAE Schengen visa-free status will certainly be a profitable one for Europe.