UAE set for tourism boost

Dubai: The UAE has the added advantage among the Gulf countries to leverage its existing hotel assets and attractions to attract tourists during the next few years, industry experts said.

"After a successful period over the past five years, the year 2009 is proving to be a tough period for the UAE. The hospitality industry is affected by the slowdown in both the UAE and its key tourism source markets which include the European countries, primarily the United Kingdom.

Another issue is the currency peg of the UAE dirham to a strong dollar, which renders the destination expensive for travellers from the UK," Robert O'Hanlon, Tourism, Hospitality and Leisure Partner at Deloitte Middle East, said

He said hoteliers in the region have been engaging in strategic measures such as induced demand generation efforts by offering value for money packages to tourists.

While it is expected such trends will continue in the near future to attract travellers to the region, tapping newer source markets for tourism is an expected trend given the country's commitment to boost its travel and tourism industry.

Gassan Aridi, CEO of Alpha Tours, said the average fall in visitors globally is about four per cent but in the UAE it is growing about three per cent monthly.

He said the fall in occupancy rates is due to the large inventory of rooms. "The UAE is adding more than 20,000 rooms per year and more will come up. But we still maintain the highest occupancy in Asia-Pacific followed by Hong Kong and Sydney."

According to STRGlobal's report, the UAE reported 53,789 rooms in the total active pipeline, the largest amount of any country in the region, out of which 30,039 rooms are in the ‘in Construction' phase.
 
Saudi Arabia followed with 7,406 rooms in the ‘in construction' phase and 13,469 rooms in the total active pipeline. The country reporting more than 5,000 rooms in the total active pipeline is Qatar with 5,408 rooms.

Marketing campaigns

"We are competing with many top destinations. With strategic marketing campaigns, which are done by all the governments in the UAE, the industry is expected to make a strong rebound next year," Aridi said.

According to STR's report, all the Gulf counties except Saudi Arabia suffered a decline in all three form factors — RevPAR, ADR and occupancy rate.

Saudi Arabia recorded a 4.3 per cent rise in occupancy rates to 47.5 per cent in October compared to 45.5 per cent during the same period last year.

In the UAE the fall in occupancy rates is diminishing. For October, the UAE witnessed a 10 per cent fall in October to 74.4 per cent compared to 82.6 per cent in October 2008.

But the UAE still maintains the highest ADR and RevPAR among the Gulf countries at $261.81 (Dh960.84) and $194.72 respectively.

"Hoteliers in the region have been pursuing strategic measures to counter this short-term slump in demand by offering more value-for-money packages to tourists," Robert said.

Expansion

Quoting World Travel and Tourism Council estimates, he said the travel and tourism economy in the Gulf region is set to expand considerably at an annualised average growth rate of 5.2 per cent during the period 2010-22.

Given such a positive outlook for the region, it is extremely important to recognise the fact that the region has the assets and infrastructure to leverage to attain the predicted growth.

Aridi said: "We expect tourist inflow into the UAE in 2009 to stand at around 700,000 compared to 600,000 in 2008. We expect to maintain 5-10 per cent growth next year.

"The downturn is behind us now; the cruise industry is doing brisk business right now in the UAE with an average growth rate of more than 20 per cent. Big liners are coming to the emirate and more are expected this winter as more conferences and congresses are taking place. More than 60 cruise ships call on the UAE a year."