Cautious optimism for UAE travel

An ominous pall hung over the world's biggest travel fair, ITB, as it kicked off in Berlin earlier this month. Despite the glum talk of market downturns, the United Arab Emirates is well placed to gain from the downturn in the long run.

The gathering is usually a bubbling spring of new ideas and optimism, but this year seemed subdued by the global financial gloom. However, this was simply a reflection of the broad global tourism picture. Both leisure and business travel has been hit hard by the crisis. In the latter half of 2008 global tourism shrank 1 per cent, dropping after a 5 per cent expansion in the first half, and prospects for 2009 look pretty bleak, according to the United Nations World Travel Organisation (UNWTO).

"In the face of the economic downturn the tourism industry is expected to continue its decline - at least in the short to medium term. UNWTO expects International tourism to stagnate (0 per cent) or even decline slightly (-1 per cent to -2 per cent) throughout 2009," according to a UNWTO statement released earlier this month.

European markets have been particularly hard-hit and they have traditionally been an important source of tourists for Gulf countries. TUI Travel and Thomas Cook, two of Europe's largest holiday operators, are already experiencing fewer holiday bookings than last year for the forthcoming holiday season.

However, tourism figures in the Middle East, along with Africa, Asia, and the Pacific are expected to grow - albeit at a more measured rate than in previous years.

Shaikh Sultan Bin Tahnoon Al Nahyan, chairman of the Abu Dhabi Tourism Authority, acknowledged that no sector would escape the effects of the downturn, saying that the global financial crisis "is having an obvious impact on international tourism". However he went on to say that "the impact and its severity differs from destination to destination."

With access to over 30 million consumers in its own region, the UAE's tourism industry should be well insulated from a tail-off in long haul passengers as Middle Eastern travellers choose to holiday closer to home.

Given the country's buoyant business tourism sector, and the nation's status as an increasingly prominent aviation hub, with both Etihad and Emirates expanding their networks, one can understand why there is cautious optimism.

"We are still well placed to ride out some of the worst effects [of the global economic slowdown] and in the short term maintain our existing demand. A positive forecast in a negative growth market" Shaikh Sultan said.

As many traditional holiday markets slide into the red this year, budget allocation and governmental support are likely to be keys. But, in the current global climate, where credit is hard to come by and government cutbacks are common, many developed holiday markets are reducing promotional spending. This gives places like Abu Dhabi and Dubai, which are willing to make such an investment, the chance to gain market share.

"We are continuing to aggressively promote and market Abu Dhabi as we feel it is important in times such as these to get your message across while perhaps others are not," Mubarak Hamad Al Muhairi, director general of the Abu Dhabi Tourism Authority, said.

Dubai is also turning to advertising while the global market is slow. It has just launched a new campaign, set to cost over $13.5 million (Dh49.55 million), promoting Dubai as a holiday destination.

The added bonus of boosting tourist numbers while other markets struggle is that it should eventually help soften the downturn by feeding the local economy and creating jobs.

Whether intractable problems such as the global economic downturn can be offset with strategies like those being employed alone is perhaps a bridge too far. Nevertheless the prospects for tourism are far less gloomy on these shores than elsewhere at the moment, which could give the UAE the chance to gain important market share from other destinations.

- Trevor McFarlane is editorial manager of Oxford Business Group, Abu Dhabi.