UAE mega projects power tourism industry

Dubai has set a target of 20 million visitors by 2020, which would put it on a par with London and Paris

United Arab Emirates, September 14, 2017

The travel and tourism sector, a pivotal growth driver of the UAE economy, is expected to record a steady surge in spending, which is estimated to reach over $56 billion in 2022 as new mega projects come to market, travel and tourism industry analysts said.

With the UAE economy on the fast track of diversification, total spending in the tourism sector is predicted to increase 4.5 per cent year on year in 2017 to reach over $42 billion, according to an analysis conducted by the Dubai Chamber of Commerce and Industry based on new data from Business Monitor International and the World Travel and Tourism Council.

In 2016, leisure travel spending in the UAE reached over $31 billion in 2016, accounting for 77 per cent of the UAE's total tourism spending.

Growth within the UAE's travel market will likely be supported by several recently announced projects, including Marsa Al Arab, a $1.7 billion mega tourist resort near the Burj Al Arab, the new IMG Worlds of Legends theme park, a Formula One theme park at Dubai's Motor City, Six Flags at Dubai Parks and Resorts, in addition to a number of planned shopping malls and cultural venues.

'These mega projects fall in line with Dubai's preparations to host Expo 2020, diversify the emirate's mix of leisure and entertainment offerings, and accommodate 20 million visitors in the city by 2020,' the Dubai Chamber said.

Dubai has set a target of 20 million visitors by 2020, which would put it on a par with London and Paris, based on the latest Global Destination Cities Index, and higher than New York and Tokyo.

Dubai's Department of Tourism and Commerce Marketing expects an influx of visitors to come by the turn of the decade, and these projections are helping to drive the construction of theme parks, hospital wings, shopping malls and several new hotels.

In the first half of 2017, record 8.06 million international overnight tourists arrived in Dubai, a 10.6 per cent increase over the same period last year.

Dubai's hotel room inventory - across 676 establishments - stood at 104,138 at the end of June 2017, up five per cent compared to the same time last year.

Dubai jumped to the world's top rank based on visitor spending of $31.3 billion, according to the annual Mastercard Global Destinations Cities Index. Dubai also ranks as the world's fourth-ranked destination city by international overnight visitor arrivals after Bangkok, London and Paris, while Abu Dhabi has become the world's third fastest-growing destination for international visitors.

The UAE Minister of Economy Sultan bin Saeed Al Mansouri estimates that the tourism sector - a key pillar to prop the nation's post-oil economy - would contribute 5.4 per cent annually over the next 10 years to reach Dh236.8 billion by 2026 on the back of an exponential growth in tourism and hospitality infrastructure.

Dubai and Abu Dhabi have already grabbed international spotlight as among the most sought-after travel destinations and the fastest-growing cities in the world respectively while other emirates have been stepping up the drive to woo holidaymakers with a plethora of new touristic attractions.

'The UAE has rich cultural heritage, natural diversity and developed infrastructure that make it a strong competitor on the world tourism map,' said Al Mansouri.

The World Economic Forum's Travel and Tourism Competitiveness Report 2017 ranked the UAE 29th globally.

V.A. Hassan, chairman of Flora Group of Hotels, said a number of iconic tourism infrastructure developments are underway to attract and cater to increasing numbers of tourists.

'Dubai is targeting new segments of the global travel market geographically while expanding the range of tourist and holiday attractions to entice more family groups and medical tourists. It is building new hotels and attractions that are tailored to each segment in terms of facilities and price,' said Hassan.

The Abu Dhabi Tourism & Culture Authority said in the first six months of 2017, more than 2.25 million guests stayed in the emirate, boosted mostly by visitors from China, one of the fastest growing areas for UAE tourism.

'We are on track to achieve our forecast guest arrivals growth for the year, and we are well placed to maximise these opportunities as we head into the second half of 2017,' said Saif Ghobash, director-general of Abu Dhabi Tourism & Culture Authority.

Dubai Chamber data found that tourism and travel accounted for 12.1 per cent of the UAE's GDP in 2016, or $43.3 billion. Leisure travel spending in the UAE totalled $31.31 billion, or 77 per cent of UAE's total tourism spending in 2016, while business travel accounted for 23 per cent, or $9.13 billion. Leisure travel spending increased at a compound annual growth rate of over nine per cent since 2011, and business travel spending rose at a CAGR of 10.83 per cent over the same period.

The data also revealed that 14.9 million leisure and business travellers visited the UAE in 2016, representing a 4.9 per cent increase from the previous year. The number of visitors to the country has been growing steadily in recent years as source markets have diversified. The Middle East was identified as the largest source of visitors, with a share of 28.6 per cent in total arrivals during 2016, followed by the Asia Pacific at 25.7 per cent and Europe at 17.1 per cent.

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