Overview

Every year, the number of people visiting the UAE rises and rises and rises. In an incredibly short time, this nation has become one of the premier global destinations. With Expo 2020 adding even more impetus to growth, the tourism and leisure sector is surely only heading in one direction: up.

Size
Sector value: Receipts from tourism totalled AED 29,117m in 2013. This figure has grown steadily over the past four years: 27,046m in 2012, 24,744m in 2011, 23,954m in 2010. (Source: Euromonitor)
Contribution to economy: In 2013, the sector contributed 8.4% of GDP in total. It accounts for 9.1% of the region’s jobs, directly and indirectly employing 496,500 people. (Source: World Travel & Tourism Council).

Growth
Projected sector value: Tourism is forecast to grow 4.5% in value in 2014, and 5.3% in terms of employment. (Source: World Travel & Tourism Council). Visitor projections for Dubai by 2020 have been revised since the Expo 2020 award, from 20m to 25m. (Source: Department of Tourism and Commerce).

Examples of growth in action:

Air travel
Passenger traffic at Dubai International Airport grew 15.2% in 2013, to 66.4 million. Abu Dhabi International Airport grew 12.4% to 16.7m. (Sources: Dubai Airports, Abu Dhabi Airport)

Visitor numbers
In the first half of 2103 alone, 5.5m people visited Dubai and 1.3m visited Abu Dhabi. These figures were up 11.1% and 12% respectively on the same period last year.(Source: Department of Tourism and Commerce)

Hotel performance
In 2013, the average rate for a hotel room rose 10.8% in Dubai to AED 402.5, and 7.6% in Abu Dhabi to AED 447. (Source: TRI Hospitality Consulting) Occupancy of four and five star hotels was 80% in Dubai and 76% in Abu Dhabi – the first and third best results in the MENA region. (Source: Bank Audi)

Attraction performance
The UAE’s most popular attraction is the ‘At The Top’ viewing platform in Dubai’s Burj Khalifa. In 2013,1.87m people visited, 13% more than in 2012. It also won ‘Best Tourist Attraction in the Middle East’ at the 2013 Condé Nast Reader’s Choice Awards.(Source: Emaar)

SME launches
Tourism accounted for the biggest rise in new business licences issued in Dubai. In the final quarter of 2013, 29% more licences were issued than in 2012. Across the entire economy, the rise was 11%. (Source: Department of Economic Development).

OpportunitiesThree suggestions:
The Dubai Government recently announced a number of measures making it even more attractive to open hotels here. These include expediting the construction pre-approval period and easing fees, such as the 10% occupancy tax for 3–4 star hotels. (However from March 2014, guests must pay a new ‘Tourism Dirham’ charge of AED 7 to 20 per room per night: money that will go towards promoting Dubai.) (Source: Gulf Times)
Airline tie-ups and codeshares could increase or open up markets. For example, Emirates’ April 2013 deal with Qantas helped create a 39% rise in Australian hotels guest last year, to over 269,000. (Source: Department of Tourism and Commerce). There’s potential that Etihad’s new routes, plus a partnership with Air Berlin that will double flights to and from the German capital from October 2014, could have a similar effect in Abu Dhabi.
There is strong development pipeline for hotels in Dubai. Confirmed plans for 2014–16 will add 141 more establishments, taking the total number of rooms to 114,000 across 751 establishments. This compares to 84,534 rooms at 611 establishments in 2013 and 80,414 at 549 in 2012. The plan is that there will be as many as 160,000 rooms by 2020. That’s close to doubling capacity in eight years. The need for a supporting infrastructure is immense, and the government has earmarked AED 25bn for this. Source: Department of Tourism and Commerce).
Disclaimer:
“The opinions expressed within this article are generic. Mashreq is not responsible for the accuracy, completeness, suitability or validity of any information on this article. The information, facts or opinions appearing in this article do not reflect the views of Mashreq. Mashreq does not assume any responsibility or liability for the same.”

Toggle