Dubai expands capacity to welcome tourists

Dubai’s Department of Tourism and Commerce Marketing (DTCM) 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. Dubai announced total international visitor figures of 14.2m for 2015, an increase of 7.5% compared with 2014, and became the fourth-most-visited city in the world. Additionally, Dubai International Airport (DIA) was crowned the world’s busiest air transport hub for overseas flights in 2015, pulling ahead of London’s Heathrow and staying ahead of its rival since.

Streamlined Offerings

In the years leading up to 2020 a number of key developments are taking place that are designed to attract and cater to increasing numbers of tourists. The emirate is targeting new segments of the travel market geographically, as well as adapting its offering 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.

However, as construction takes place on new sites across Dubai some observers are concerned about the consequences of a rapid expansion in volume of hotel stock. As of early 2016, external factors were making conditions more challenging for many visitor groups who regularly enjoy holidays in the emirate. The devaluation of the Russian rouble and the Chinese yuan, coupled with the increase in value of the dollar-pegged dirham, could take its toll on hotel revenue, while the impact of the fall in global oil prices could start to reduce the spending power of GCC visitors, or other oil-dependent economies such as Nigeria. While staging an international event could potentially act as a spur to growth, Dubai’s leaders are aware that the world will eventually judge the city and emirate’s success by measuring the long-term sustainability of that growth and its ability to create a lasting and positive legacy following Expo 2020.

By The Numbers

In April 2015 DTCM published its “Dubai Annual Visitor Report”. The headline figure was that the emirate had welcomed 14.2m visitors in 2015, an increase of 7.5% over 2014 when 13.2m arrivals were recorded, a figure up 8.2% on the previous year. However, DTCM explained that a new methodology had been used to capture the figures. Previous statistics had been a record of international guests staying at hotel establishments, but the new data recorded all tourists travelling to Dubai and staying for at least one night in hotels, holiday rentals, with friends and family, or on cruise ships.

DTCM did not give a re-calibrated figure for 2013 based on this methodology, but an 8.2% increase suggests a calculation of 12.2m visitors recorded using the previous methodology. The report’s authors argue that by recording a more comprehensive set of data, the agency is better able to understand its audiences, target marketing campaigns at a range of sectors and develop strategic partnerships with companies serving those subsectors.

An example of this came a month after the report was published, when DTCM announced an agreement with HomeAway, the world leader in holiday home rentals. DTCM data shows that growth in visitor numbers continued in the first quarter of 2016, when the emirate attracted 4.1m international visitors, a 5.1% increase over the same period in 2015.

Hotel Nights

The change in methodology enables a closer inspection of how the hotel and hotel-apartment sector fared between 2014 and 2015. There was a 6% increase in the number of hotel and hotel apartment rooms, totalling 98,333. A total of 26.4m room nights were recorded in 2015, up from 24.97m in 2014. The emirate also saw growth of 3% in the number of establishments, reaching 677 properties. The average length of stay was 3.6 nights in 2015 compared to 3.8 nights in 2014, with occupancy rates averaging 77% for the year, down slightly from 79%.

The total number of international guests reached 4.1m visitors in the first quarter of 2016, a 5.1% increase over the same period in 2015. The GCC maintained its position as the top feeder market, with 25% of all international visitors, with Saudi Arabia leading the way in this segment at 476,000 guests for the period, followed by Oman (322,000) and Kuwait (119,000). Western Europe was also the second-largest source region at 23% of all visitors. Elsewhere, India and Pakistan remained key drivers for the tourism sector with growth of 17% and 18%, respectively.

Economic Impact

Tourism’s contribution to the emirate’s economy is significant and has been growing, according to the Dubai Statistics Centre. In 2013 the restaurants and hotels sector generated Dh16.25bn ($4.4bn), but by 2014 this had increased by 5.2% to some Dh17.1bn ($4.7bn). Over the same period the sector’s overall contribution to GDP rose fractionally from 5% to 5.1%.

In the first nine months of 2015 there were signs of more significant growth, with restaurants and hotels as the star performers. These facilities generated Dh15.3bn ($4.2bn) in the first three quarters of 2015, up from Dh14bn ($3.8bn) in the same period in 2014, representing annual growth of 9.4%, which was stronger than any other part of the economy. Contribution to GDP in the first nine months of 2015 was 5.4% compared to 5.2% in the same period of 2014.

The sector is also a significant source of employment in the emirate. Dubai Statistics Centre data show that in 2014, the latest year for which figures were available at the time of press, 6.3% of the workforce was employed in accommodation and food service roles, accounting for 5.6% of all female employees and 6.4% of male workers.

The strength of business can also be seen in the number of tourism licences issued to businesses. Dubai Statistics Centre numbers show a 13.5% increase in the number of new licences and licence renewals issued by the Department of Economic Development from 2242 in 2014 to 2544 in 2015.

Wider Impact

The World Travel and Tourism Council (WTTC) measures the impact of travel and tourism on 184 countries including the UAE. It uses UN-approved Tourism Satellite Accounting methodology to measure the direct and indirect impact of tourism and travel. Direct contributions from travel and tourism include commodities such as accommodation, transportation, entertainment and attractions, plus services supplied by accommodation providers, food and beverage services, retail trade, transport services, cultural, sports and recreational services, as well as sources of spending on tourism and transport by residents, businesses, visitors and individual governments. Indirect contribution includes investment spending on transport and tourism, and government expenditure on the sectors, among other things.

Based on these criteria, WTTC data showed that travel and tourism combined contributed Dh64.69bn ($17.6bn) directly to the UAE’s economy in 2015, or 4.2% of total GDP, and it forecast this would rise by 4.2% in 2016, and by 5.7% a year by 2026, to Dh118.1bn ($32.1bn), equivalent to 5.6% of projected GDP.

Furthermore, the WTTC reported that the total contribution of the sector to GDP, including indirect revenues, was Dh133.8bn ($36.4bn) in 2015, or some 8.7% of the economy. It forecast an increase of 4.4% in 2016 and 5.2% annually over the next decade, reaching an estimated total contribution of Dh236.8bn ($64.5bn), or 11.2% of GDP in 2026.

The WTTC estimated 5.7% of the UAE’s population was directly employed in travel and tourism in 2015 and expected employment in the sector to grow by 3.8% in 2016 and by 4.3% a year until 2026 when it anticipated 520,000 people would be directly employed in the sector. The WTTC reported the impact of tourism and travel also supported jobs in related sectors, and it estimated 557,000 jobs, or 9.6% of the total workforce in the UAE, were supported by the industry in 2015. Once again, it expected these numbers to grow by 3.8% in 2016.

WTTC figures further show visitor exports totalled Dh95.5bn ($26bn) in 2015, constituting 6.7% of all exports. It anticipated growth of 3.3% in these figures in 2016, and 5.4% a year until 2026. The report calculated that travel and tourism investment in the UAE was Dh27.4bn ($7.5bn) in 2015, 6.4% of total investment and anticipated a 2.8% increase in 2016, followed by 6.8% annual growth in the following decade to 2026. Based on real growth, the WTTC ranked the UAE 51st out of 184 countries in terms of travel and tourism’s direct contribution to GDP, and 42nd in terms of total contribution to GDP in 2015. In terms of long-term growth potential in travel and tourism’s direct contribution to GDP the country ranked 33rd.

Key Contributor

WTTC historical data showed that the direct value of travel and tourism’s contribution to GDP grew significantly from 2005 to 2008, but then held steady until 2012 when it started to climb again. It also showed the number of people directly employed in the tourism sector in the UAE doubled in round terms from just over 150,000 in 2006 to more than 300,000 by the year 2015.

The WTTC report suggested that leisure travel spending, both inbound and domestic, constituted 79% of direct travel and tourism GDP in 2015, or Dh97.9bn ($26.6bn), compared to business travel expenditure of Dh26bn ($7bn). Additionally, domestic travel spending generated 22.9% of direct travel and tourism GDP in 2015 compared to 77.1% for visitor exports, including foreign visitor spending and international tourism receipts.

Broadening Appeal

DTCM plays a marketing role for the tourism industry, with more than 20 offices worldwide, but it also has a regulatory function as the body responsible for licensing tourist establishments, tour operators and travel agents. Beyond that, DTCM is responsible for developing the emirate’s tourism strategy and encouraging investment in the sector.

To help broaden the emirate’s appeal, DTCM has also played an influential role in initiating or implementing a number of government policies. These have included raising the number of nationalities entitled to a visa on arrival, formalising the rules for holiday-home letting to tourists and incentive schemes to encourage developers to build mid-market rather than luxury accommodation for tourists. Many firms are taking up this challenge and looking into new markets and segments.

Data Drive

There is also a renewed focus on online business and data collection. Online booking company Tajawal was established in 2015 with five employees and now has over 100. Launched with a focus on airline bookings for Saudi Arabia and the UAE, Tajawal has expanded into hotel bookings, and will soon expand into the greater GCC and, eventually, North Africa, Iran and Pakistan. The firm taps into niche market needs. “In the hotel side there are lots of facilities that are not currently available through the existing portals,” Muhammad Chbib, founder and CEO of Tajawal, told OBG. “The Islamic economy is also an untapped market. People from outside the region would not understand certain local needs. For instance, taking alcohol out of the minibar, having bidet showers, separate pools for men and women, having female personnel in some areas.”

The sector’s need for improved IT and data services has brought firms like Madrid-based Amadeus IT Group to the market. The company was established as a global distribution system and now has over 40% of the worldwide market share. It operates its regional headquarters in Dubai. Amadeus specialises in booking engines for airlines, check-in systems at airports, travel intelligence and advertisements. The company also has partnerships with several hotels. “Jumping to online is a big trend in the Middle East tourism market, and we are seeing more players going online,” Antoine Medawar, vice president at Amadeus MENA, told OBG. “The ICT sector in Dubai is growing and there are more technology companies offering services. This includes more tech travel providers. We also see more companies being based here. The country is catching up with Jordan and Egypt in terms of software development.”

Visa Regulations

The emirate is keen to ensure that it does not develop an over-reliance on tourists from any particular country or region of the world, and to this end it decided to amend its visa regulations in 2014. In March 2014 all citizens of EU member states became entitled to a tourist visa on arrival. By the end of 2014, DTCM was able to report increases in the number of tourists arriving from Bulgaria, Hungary and Romania of 104%, 86% and 64%, respectively. The new rules mean citizens from 46 countries are now entitled to visas on arrival. DTCM’s director-general, Helal Saeed Almarri said, “Dubai has strategically sought to ensure a fragmented source approach, mitigating risks associated with over reliance on any specific region or geography.”

Then in May 2015 the UAE and the EU signed a short-stay visa waiver agreement, which provides for visa-free travel for Schengen citizens when travelling to the territory of the UAE and for citizens of the UAE when travelling to Schengen countries, for a period of stay of 90 days in any 180-day period. Before this agreement, Schengen nationals were required to leave after one month in the UAE.

Home & Away

For the first time in 2014, DTCM decided to include the number of people staying with friends or relatives in Dubai in its arrival data, and this also comprised people staying in private properties. The growth of peer-to-peer sharing sites such as Airbnb has provided a platform for homeowners, and potentially tenants, to rent out all or part of their properties to tourists. To capitalise on this trend, in June 2015 DTCM announced it had formed a strategic partnership with NASDAQ-listed, Texas-based HomeAway, a global leader in holiday rentals. The result was a Dubai website with holiday property listings in both English and Arabic.

In May 2016 DTCM signed a memorandum of understanding (MoU) with Airbnb to promote responsible hosting. The MoU follows the introduction of streamlined regulations for tourists looking to obtain a holiday-home licence, as well as homeowners looking to rent their properties. Under the MoU Airbnb will work with DTCM to prevent breaches of the regulation by informing all host members of certain rules. The MoU includes an agreement to promote more innovative forms of tourism in Dubai.

Dirham Levy

DTCM requires those who opt to let their properties on either a short- or longer-term basis to register with the authority and to ensure that holiday guests pay the tourism dirham levy, which is charged by hotels and hotel apartments in the emirate. The tourism dirham, introduced in March 2014, is a fee of between Dh7 ($2) and Dh20 ($5) per room per night levied by hotels, with rates dependant on the classification of the accommodation.

Although holiday-home rentals may appear to be an attractive and alternative option for independent travellers, owners or tenants hoping to open their doors to visitors may face opposition from owners’ associations in some residential developments and may find their neighbours object to shared communal facilities such as swimming pools, often paid for in annual service charges, being used by tourists.

Mid-Market Incentives

An additional initiative being used to help broaden the offering of tourist facilities is the provision of an incentive package for developers to build mid-market hotel properties. In September 2013 the Dubai government issued directives waiving the 10% municipality fee, which is levied on the room rate on a nightly basis, for developers of three- and four-star hotels. In January 2014 new measures were announced including a two-week turnaround for the construction approval process for hotel properties of this type, a standardised approval process for Dubai Municipality and the allocation of government land plots to three- and four-star hotel developments (see Construction chapter).

New Projects

At the Arabian Travel Market held in Dubai in May 2015, a number of mid-market hotel projects were announced or showcased. The hospitality arm of Dubai’s wasl Asset Management Group announced a partnership with Hilton Worldwide to introduce the mid-market Hampton by Hilton to Dubai with the planned opening of the Hampton by Hilton Dubai Al Qusais and Hilton Garden Inn Dubai Al Garhoud in 2017, adding more than 550 guest rooms to the emirate’s inventory. In January 2016 Hilton also announced the opening of two other Hampton by Hilton hotels in the emirate: Hampton by Hilton Dubai Al Barsha and Hampton by Hilton Dubai Al Mina.

Three Hilton Garden Inns also opened welcomed their first guests in Dubai in 2015, with the latest addition, the Hilton Garden Inn Dubai Mall of the Emirates, opening in December 2015.

In August 2015 wasl Hospitality & Leisure formally opened its second Hyatt Place hotel in Baniyas Square, Deira, part of its ambitious plans for expansion in the mid-market sector. “wasl currently owns 14 hotels including the two new Hyatt Place hotels and we have 15 hotels in the pipeline to be built and open for business in the coming years, which will take the wasl Hospitality portfolio from nearly 5500 rooms today to a total of 10,000 rooms,” said Hesham Abdullah Al Qassim, CEO of wasl Asset Management.

Business Opportunities

Another Emirati partnership working to target the mid-market hotel sector features Emaar Hospitality Group and government-owned Meraas Holdings. It used the Arabian Travel Market to launch Rove Hotels, a mid-market lifestyle brand with plans to open six properties before 2020, starting with Rove Za’abeel in 2016.

Additionally, Jumeirah Group, which is part of Dubai Holding and the operator of the Burj Al Arab, signed a management agreement with Meraas Holdings in February 2015, paving the way for its first venture under the Venu Living brand. The property is due to open on Bluewaters Island off the coast of Jumeirah Beach Residence in 2017 and will offer almost 300 hotel rooms as well as 119 serviced apartments. Jumeirah Group currently has 26 hotels in its global pipeline on top of the 22 properties it already operates in Europe, the Middle East and Asia.

Rising Capacity

At the end of 2014 Dubai’s hotel and hotel apartments had 92,333 keys, according to DTCM, and it anticipated that figure would rise to 100,000 keys by August 2016, including hotel apartments, with an additional 34,000 keys being added by 2018. The department expected 20,000-30,000 of those keys to be in the mid-market hotel sector. Of the 44 new hotels and hotel apartments completed in 2014, 13 hotels and nine apartment buildings were in the mid-market category. The real estate consultancy firm JLL collates its own data, but only counts hotels, rather than including serviced apartments. By JLL’s reckoning, Dubai began 2015 with 64,400 keys and this total had reached 65,600 by the end of the third quarter of 2015, with a further 2400 keys anticipated to come on-stream by the end of the year for a total of 68,000 keys, a 5.6% increase on the previous year. It expects 8400 hotel keys to be added in 2016.

Among the mid-market chains planning to be part of this projected growth, Ibis and Holiday Inn have identified Dubai for development, as has the UK brand Premier Inn, which had three properties in the city in 2015, with plans to open the 245-bedroom Premier Inn Healthcare City and the 372-room Premier Inn Ibn Battuta Mall in 2016. In Dubai South, InterContinental Hotels Group plans to open two hotels close to Al Maktoum International Airport (DWC) and the Expo 2020 site. The Holiday Inn Dubai World Central will have 450 rooms while Staybridge Suites Dubai World Central will have 250. The development will take the number of Holiday Inns in Dubai to five, while two other Staybridge Suites are in the pipeline before 2020, according to DTCM.

Supply & Demand

In the midst of this hotel building boom, there are concerns among some in the hospitality sector that the influx of so many new rooms will have a negative impact on the profitability of existing hotels in Dubai. Drawing on data from hospitality research firm, STC Global, JLL reported a slowdown in the hotel market in the third quarter of 2015. It cited an occupancy rate of 77% for the year to August, down 1% from the same period in 2014, but with an 8% fall in average daily rate (ADR), compared to the same period in 2014, from $235 to $217. Revenue per available room (revPAR) fell 9% year-on-year (y-o-y) to reach $167 for the year to August. JLL reported that the addition of 32,000 room keys between 2015 and 2018 was expected to lead to further falls on both ADR and revPAR. “Unlike occupancy rates, which have remained steady in most of the cases, room rates in Dubai have witnessed a recent decline. As a result, this has driven the top line down,” Imad Elias, CEO of Roda Hotels, told OBG.

Rate Impact

The impact on four- and five-star hotels is also apparent from data collected by TRI Consulting and published in its monthly HotStats bulletins. Any y-o-y comparison of hospitality data in Dubai is affected by the timings of religious holidays and periods. There is also considerable variation in average room rates during the year. However, bearing these fluctuations in mind, there were y-o-y declines in the average room rate for each month in 2015, although a number of establishments managed to maintain their occupancy levels in some months, based on the data from top-end hotels in the emirate.

In January 2015 data showed the average room rate fell by 4.6% to $383.66, but that occupancy rose by 0.4% to 86.5%. However, in April 2015 there was a 12% reduction in average room rate to $373.78 in order to maintain occupancy at 84.9% in the face of a weakening euro and a stronger dirham. The result was a 19.5% fall in profitability for that month. In May 2015 the average room rate fell by 10.8% to $271.64, though occupancy remained at 83.8%. In December 2015 the average room rate in four- and five-star hotels dropped 4.6% y-o-y to $315.79, while occupancy edged down to 80.2% by the end of the year, which led revPAR to decrease 5.9% to $253.32. Average room rates continued to decline into 2016, posting a 9.3% y-o-y fall in January to $312.83.

Strong Position

However, although Dubai’s luxury hotels have clearly faced a challenge to maintain occupancy levels and have had to moderate prices, both indicators would be deemed very healthy in most parts of the world, and particularly in the region. For instance, HotStats for Cairo, drawn from the same portfolio of hotel chains, shows some significant improvements in that market, with occupancy rates up 24% and 12.1% y-o-y in January 2015 and April 2015, but still lagging well behind Dubai on 59.2% and 53.5%, respectively. In the same two months average room rates in the survey hotels in Egypt were up by 11.9% and 9.9%, but were only a fraction of Dubai’s rates at $108.99 and $111.28.

There are also hoteliers in Dubai who believe the emirate will comfortably absorb the new hotel stock as the city’s popularity grows. Karim Bizid, general manager of The Oberoi Dubai, a five-star luxury hotel in Business Bay, recalls arriving in Dubai from St Moritz, Switzerland, in the mid-1990s when there were just 10 hotels in the emirate. “When new hotels started to arrive, people began to panic, but the 10 became 20 and there was always sufficient capacity,” Bizid told OBG, adding that Dubai still has some way to go to reach the number of hotels Spain has built to cater for tourists from Europe.

Serviced Apartments

DTCM figures released in May 2015 showed construction of new holiday apartment buildings was outpacing the development of new hotels, with an 8.7% growth in both apartments buildings and flats. David Brown, the general manager of Fraser Suites Dubai, located in Media City, said his customers included GCC families, who enjoy the greater freedom afforded by a full-sized apartment stay, and business travellers, who may find themselves staying for one day, one week or even up to one year, as well as executives who have just been relocated to the emirate and prefer to base themselves from a serviced residence while looking for more permanent accommodation for the long term.

As of October 2015 Fraser Suites Dubai had an average occupancy rate of 80%, in what Brown described as an increasingly challenging market. “Supply and demand are rarely in balance and when occupancies increase new entrants are attracted to the market, adding to the competitive nature of the lodging business here in Dubai.”

Frasers Hospitality, the Singaporean management company that operates the Fraser Suites brand, has set a strategic growth target for the GCC with plans to launch seven new properties over the coming 24 months, including a 295-key Fraser Suites in Al Jadaf, Dubai, which is slated to open in 2018. In 2015 the company purchased the British portfolio of Malmaison and Hotel Du Vin boutique hotels, and is actively looking for opportunities to develop the footprint of its new acquisition outside the UK.

In London, Frasers Hospitality also recently collaborated with Mercedes Benz to launch a partnership project, Mercedes Benz Living @ Fraser. Designed by the carmaker, the apartments are located in the brand’s South Kensington properties under the Mercedes-Benz Living trademark. As Dubai’s hospitality market matures, observers see the potential for similar co-branding partnerships to raise the profile and desirability of accommodation offerings as operators seek to stand out in an increasingly busy market.

“We are seeing some interesting tie-ins,” Harmen De Jong, partner at Development Consultancy and Research, Knight Frank, told OBG. “There is the Paramount Hotel with Paramount Residences, where they have bought the licence from the Hollywood studio, but there is also a Cavalli Hotel and Bulgari is developing a hotel with Meeras. The developers can make a lot of money from selling these branded hotel units.”

Ports & Airports 

Hoteliers and restaurateurs concerned about the increase in supply of facilities can take comfort in the arrival figures at the emirate’s airports and ports, which show a growing supply of tourists and business visitors. In 2015 Dubai International Airport registered annual traffic of just over 78m, according to operator Dubai Airports, with passenger traffic surging 10.7% in 2015 compared to the previous year. The airport’s Concourse D commenced operations in February 2016 increasing the capacity of the airport to 90m passengers a year.

In the meantime, development work is taking place across the city on DWC, which is set to develop its passenger capacity from 6m to 26m by the end of the first quarter of 2017, as a precursor to the $32bn project that will ultimately give DWC the capacity to handle 200m passengers a year.

By Air & By Sea

In 2015 the emirate’s second airline, flydubai, moved its operations to DWC. As of March 2016 the airline served 93 destinations in more than 40 countries. It had a fleet of 49 Boeing 737-800s and an order book of 86 new aircraft. Meanwhile, flag carrier Emirates had 236 passenger aircraft and served 150 destinations on six continents. More than 1500 Emirates flights take off from Dubai each week.

A new Dh35 ($9.75) departure tax for airline passengers on all flights taking off after June 30 was introduced in March 2016 to help fund Dubai Airports infrastructure and expansion plans. Airlines operating at Dubai Airports’ facilities are in charge of collecting the fee when they issue the tickets.

Dubai’s cruise ship industry is also growing. The 2014/15 season saw more than 455,000 cruise tourists arrive in the emirate, a 42% increase compared to the previous season. During the 2015/16 season, which ends in June, around 500,000 cruise tourists were expected to arrive in the emirate.

Business Travel

Dubai is also working hard to leverage its position as the world’s busiest air hub to grow its offering as a business travel centre. It climbed 19 places to 44th position in the International Congress and Convention Association world rankings, and from 21st position to 14th in the Union of International Associations survey of international meetings. It hosted 146 international business gatherings in 2014 compared to 80 in 2013.

“The increase in the number of meetings and conferences being hosted in Dubai is contributing to the rise in visitor numbers while also positioning the emirate as a global hub for creation, education and innovation,” Almarri told OBG.

Dubai has consistently built on its competitiveness as a global business destination and event hub through investments in infrastructure, content creation and regulatory levers. On this front, in partnership with Emirates Airlines, Dubai World Trade Centre, the hotel sector and local destination management companies, the city hosted more than 550 international meetings in 2015. Dubai World Trade Centre alone welcomed 2.74m visitors, up 12% y-o-y, contributing Dh12bn ($3.3bn) to the economy. This is expected to increase on the back of the 2015 expansion of the Dubai World Trade Centre to over 121,984 sq metres. The planned flexible event space is expected to cater to new growth which in turn will support increases in Dubai’s business tourism traffic.

New Segments

The emirate is also looking to position itself as an international auction destination, particularly in the arts and culture segment. Dubai is home to a number of new art galleries, as well as international art fair Art Dubai. “Initiatives such as Christie’s auctions and Art Dubai are attracting collectors from around the world who come here and spend in hotels, restaurants, etc., serving as a boost for the broader tourism sector and adding to the incremental revenues of the city,” Michael Jeha, managing director of Christie’s Middle East, told OBG. “This is important for Dubai as well in order for it to grow and mature, as it also attracts more artists and motivates children to study art-related disciplines.”

Sports events are another lucrative market that the sector is hoping to tap into. Founded in 2005, Golf in Dubai hosts two tournaments every year in the emirate, as well as sponsoring tournaments abroad, including one in South Africa. The firm is aiming to encourage more interest in the game. Mohamed Juma Buamaim, vice-chairman and CEO of Golf in Dubai, told OBG, “There is now competition between Dubai and Abu Dhabi, but they should be unified and stronger. Stakeholders must keep in mind that an event hosted in one GCC country can benefit all the others. Entertainment, sports and cultural activities are a new driver for growth in the tourism and meetings, incentives, conferences and exhibition sectors.”

Outlook 

In the short term, some hotel owners and managers may have to weather a period when growth in demand sometimes fails to keep pace with the construction of new hotel and hotel-apartment stock in the emirate. However, with DTCM’s strategy targeting new sectors such as mid-market hotels, sporting and cultural events, family leisure breaks and medical tourism, a more diversified market may also allow a greater variety of players to benefit.

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The Report: Dubai 2016

Tourism chapter from The Report: Dubai 2016

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