SETTING THE RECORD STRAIGHT

UAE, Dubai 2012 | TOURISM & RETAIL | REVIEW: TOURISM

Dubai set a new record in terms of foreign visitors and nights spent in one of the Emirate's nearly 600 hotels and hotel apartments in 2011. The upward trend continued in 2012, as Dubai remains one of the world's 10 most-visited cities.

All indicators for Dubai tourism were up in 2011, which contributed an estimated 31% to GDP, according to the Department of Tourism and Commerce Marketing (DTCM). The Emirate attracted some 9.3 million hotel guests and cruise passengers, which represents a 10% increase compared to the previous year. The majority of visitors, over 7.2 million, stayed in hotels, while over 1.8 million opted for a hotel apartment, an increase of 11% and 6%, respectively.

MasterCard's 2011 Destination Cities by International Visitors ranking listed Dubai as the world's ninth most visited city. Topping the list were London (20.1 million), Paris (18.1 million), and Bangkok (11.5 million). The second most visited city in the MENA region was Cairo with 3.7 million visitors. Over one-third of Dubai's tourists came from the Arab world, among them nearly a million Emiratis and 1.6 million GCC nationals, including some 685,000 Saudi Arabian citizens. The UK contributed 673,000 visitors, the leading European country of origin. In total, 2.3 million Europeans visited Dubai, followed by 2.16 million Asians, mostly Indians (700,000), Iranians (476,000), Pakistanis (221,000), and Chinese (193,000). Another leading source market was the US, as some 462,000 US citizens visited Dubai in 2011.

A visitor's average stay remains relatively short, even though it increased by 12.5% to 3.6 days in 2011. Most people come for a long weekend of sunbathing and shopping, while the average business conference does not last more than three days, and a typical holiday package booked in London includes up to seven nights in Dubai. In addition, many people visit the Emirate as a stopover on their way to other destinations. Dubai is home to the world's fourth busiest airport, with more than 150 airlines flying to over 220 destinations across the globe. Annual passenger traffic reached 50.98 million in 2011 and is projected to amount to 56.5 million in 2012 and 98 million by 2020.

The number of nights spent in Dubai's hotels and hotel apartments grew by 22% to amount to nearly 23.3 million, which pushed the average occupancy rate from 70% in 2010 to 74% in 2011. The number of tourist accommodation establishments also increased, from 573 in 2010 to 575 in 2011, bringing Dubai's total capacity to nearly 75,000 rooms. Although the Emirate is also home to some 120 two-star hotels, no less than 65.5% of all accommodation belongs to the luxury four- and five-star market segment.

An Ernst & Young benchmark survey of the Middle East hospitality market concluded that Dubai's high-end hotels enjoyed an average occupancy rate of 87% and a Revenue Per Available Room (RevPAR) of $241 in 2011. Dubai apartments recorded the highest occupancy rate with 95%, while Dubai Beach posted the highest RevPAR ($332) in the region. It also had the highest average room rate with $398, while the MENA average amounted to $191.

The hospitality sector's overall revenue in 2011 rose by 20% to a new record level of AED15.9 billion ($4.33 billion), 84% of which was generated by hotels. This represents a 4.6% increase compared to the previous record of AED15.2 billion set in 2008. In doing so, the hotel sector seems to have finally and fully recovered from the recession triggered by the 2008 financial meltdown, which saw Dubai's hotel revenues fall by 18% the following year.

According to Stewart Coggans, Vice-President of Jones Lang LaSalle Hotels Middle East and North Africa, Dubai benefited on the one hand from the economic recovery in main source markets, such as Europe, and on the other from the political turmoil in the region. The popular uprisings known as the Arab Spring caused destinations such as Cairo, Damascus, and Bahrain to lose appeal. The Ernst & Young survey showed that the average occupancy rate in Cairo's luxury hotels dropped to 30%, in Sharm al-Sheikh to 56%, and in Beirut, which is suffering from the fallout of the conflict in neighboring Syria, to 60%.

Other factors that play a role are the Emirate's relative affordability when compared to the pre-2008 peak prices and its increasing appeal for upcoming markets such as China, India, and Eastern European countries like Russia. Meanwhile, as life in Cairo gradually returns to normal, the armed uprising in Syria continues. Countries such as Kuwait, the UAE, Qatar, Bahrain, and Saudi Arabia in May 2012 also called upon their citizens to avoid traveling to Lebanon, traditionally one of the region's top holiday destinations, certainly in summer. Consequently, Dubai remains a welcome alternative for thousands of Arab holiday goers, as was illustrated by the DTCM figures for 1Q2012. The key performance indicators showed, among other things, a 9% increase in guest numbers, a 22% hike in room nights, and a 12% rise in the average length of stay.

RETAIL & ENTERTAINMENT HAVEN

Home to dozens of malls and megamalls, including the world's largest, Dubai remains a global retail hub. In a 2010 survey among foreign visitors, 80% of respondents replied that shopping was one of the reasons to go to Dubai. Of particular importance is the annual Dubai Shopping Festival (DSF). First organized in 1996, the DSF generally takes place in February. Travel agents, tour operators, and hotels sell the festival and often offer special rates. Likewise, the national carrier Emirates offers discount fares and allows for excess luggage.

“We're still crunching data, but the DSF in 2011 attracted 4 million festival-goers who together spent more than $4.1 billion on retail, travel, and hospitality in one month—that's around 1 million people spending $1 billion a week," said Laila Suhail, CEO of Dubai Events and Promotions Establishment (DEPE), which is tasked with promoting Dubai as a year-round shopping, tourism, and entertainment destination. “The DSF was an important factor for more than eight out of ten regional and international visitors when choosing Dubai as their travel destination," she added.

Other events DEPE helps organize include Eid in Dubai, Ramadan in Dubai, and Dubai Summer Surprises (DSS). Launched in 1998, the latter aims to promote and position Dubai as a summer destination. The festival sees GCC residents and other tourists flock to the city in a search for bargain deals in the over 6,000 stores participating in the annual event.

A variety of major sports events takes place in Dubai every year, including the Dubai World Cup, an increasingly popular horse racing event, the Dubai Duty Free Tennis Championships, and the Omega Desert Classic golf competition. In addition, the Emirate plays host to numerous cultural events. The Egyptian superstar Amr Diab performed last March. Jennifer Lopez will hit the stage in November 2012, and top DJ Paul Oakenfold is scheduled for December. In that same month, the annual Dubai International Film Festival will take place.

Furthermore, Dubai offers sea and beaches, deserts safaris, a growing number of museums and art galleries, the Emirates Mall's indoor ski slope, and, of course, the world's tallest building, the 829.84-meter-tall Burj Khalifa. Dubailand deserves special mention, as it offers a variety of sports and entertainment venues that in 2011 attracted some 13 million visitors.

EXPANSION

Dubai has come a long way in a very short period of time. People tend to forget that there was not a single hotel in the Emirate as late as the 1950s. The international airport was inaugurated in 1959, while the first hotels only opened in the late 1960s. The 1980s witnessed the creation of such key institutions as Emirates Airlines and, in 1989, the Dubai Tourism Board, which would later become the DTCM. The first annual DSF took place in 1996, and a year later the hotel management company Jumeirah Group was established.

Part of Dubai Holding, the Jumeirah Group has played a pivotal role in putting Dubai on the world tourism map. “Since the opening of our first property, Jumeirah Beach Hotel in 1997, we have worked closely with both Emirates Airlines and DTCM to promote Dubai as a luxury destination," said Gerald Lawless, Executive Chairman of Jumeirah Group. “The opening of our flagship hotel, Burj Al Arab in 1999, followed by the opening of Madinat Jumeirah in 2004, reinforced Dubai's image as a world-class year-round holiday destination."

The company has, since 2005, embarked on a path of expansion both in Dubai and abroad. In 2011, the company expanded its international portfolio from 10 to 20 hotels with new properties in, among other cities, London, Shanghai, Istanbul, and Rome. In 2012, it is set to open new hotels in Baku and Kuwait, as well as the Jumeirah Creekside Hotel in Dubai.

It is hardly the only new hotel to open its doors in Dubai. It is estimated that an extra 4,000 luxury hotel rooms will be added to Dubai's hospitality market by the end of 2012, and another 19,000 over the next few years. Later in 2012, for example, the world's tallest hotel will open its doors in Dubai. The two-tower JW Marriott Marquis Dubai measures 355 meters and will add 1,608 rooms to the market.

“This will be the first Marquis outside the US and it will be Marriott's largest hotel outside North America," said Rupprecht Queitsch, General Manager of JW Marriott Marquis Dubai, adding, “it will cater to the business community. There is a distinct shift toward business, and some predict that by 2014 or 2015 Dubai will receive more than 50% of its clientele for business. We have over 5,000 sqm of banquet facilities and two ballrooms, the largest being 1,400 sqm with 60-80 meter high ceilings."

Other examples include the 559-room Hilton Conrad Dubai, which is also scheduled to open later in 2012, while Four Seasons Hotels and Resorts is to build a resort property at Jumeirah Beach that should open in mid-2014. However, the most outlandish development, if realized, is no doubt the half-submerged Water Discus Hotel, which offers rooms with an underwater view on marine life. It arguably illustrates Dubai's re-found confidence. With the tourism sector back on track, dreams of grandeur are not far away.