Tourism sector grows in leaps and bounds

The UAE and the wider GCC have for some time sought to diversify their income sources and move away from dependence on oil

Gulf News

The UAE and the wider Gulf Cooperation Council (GCC) have for some time sought to diversify their income sources and move away from dependence on oil, an objective that is key to the economic and social future of the region.

Over the past four decades, the UAE and GCC countries depended on oil sales to finance budgets. As a result, huge sums were invested to develop infrastructure, education, health, housing, and general services sectors, as well as strategic financing for industrial, transport and tourism projects.

From the very start, the UAE realised that oil wealth would not prop up the country's economy indefinitely. Even a cursory look at the economies of Europe and America shows how important industrial development and economic evolution is to sustaining a country over the decades. That is why the UAE sought, from the very beginning, to invest its oil revenues in establishing infrastructure for the development of other sectors that would contribute to diversifying national income sources and, in the long term, gradually substitute oil wealth.

Limited role

However, the non-oil sectors qualified to play this role are limited. They include the manufacturing industry, trade, transport, financial services and a promising tourism sector, where the UAE has made great strides over the last two decades. The country is currently a first-class tourist destination attracting millions of tourists every year.

For us to understand the developments which took place in the tourism sector, it is vital to point out its contribution to the country's gross domestic product (GDP) over the years — a share that has jumped from 1 per cent 40 years ago to 10.4 per cent today.

As a result, the tourism sector stands tall today alongside the most important non-oil sectors which contribute to diversifying the UAE's sources of income. The importance of this sector is also expected to increase over the coming decades as a result of the existing infrastructure, which allows the development of tourism on more than one level.

First, there is a strong hotel industry, which is rare in the region in terms of the quality and the facilities on offer. All these conveniences have attracted top personalities in the arts, sports, and culture to the country. There is also a high standard of family and entertainment facilities, with shopping centres, beaches and heritage locations, making the tourism sector more diverse and attractive to visitors from all around the globe.

According to available statistics, 50 million tourists have visited the Dubai Shopping Festival since its launch 14 years ago, spending a total of Dh88 billion. Meanwhile, last year 1.1 million tourists visited Dubai, and the number exceeded 2 million across the UAE. This is a great achievement for the tourism sector because despite the global economic crises, visitors from Western Europe make up a huge percentage of the tourist numbers.

This increase gave a boost to passenger movements at the country's airports, where the number of annual arrivals rose to 10-12 per cent. The number of visitors arriving at Dubai's airport reached more than 50 million, according to initial estimations, while the arrivals through Abu Dhabi airport reached 10 million last year for the first time.

Airlines' contribution

The country's airlines have contributed to this increase in visitors as they linked countries across the world — from Japan in the east to the two American continents in the West.

This has transformed the country into an international transport centre and an easy-to-reach tourism destination. Both traits are extremely important and, especially in the Middle East, lacking in many destinations.

According to the World Travel and Tourism Council report, the UAE accounts for 41 per cent of the tourism investments in the Middle East, at Dh40.5 billion. This also represents 20.9 per cent of investments in the country in 2011.


Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and GCC countries.