ADTA wants to lure Chinese tourists to emirate



The Abu Dhabi Tourism Authority (ADTA) has opened three offices in China to promote the city as a tourist destination. Seeking to capitalise on China's growing market of outbound tourists - the UN World Travel Organisation has reported it would be the world's biggest by 2020 - ADTA has set up shop in the capital Beijing and in the country's second and third largest cities, Shanghai and Guangzhou.

"A number of prevailing factors led us to prioritise China in our five-year overseas promotion strategy including the sheer size of the outbound Chinese market, the propensity of the Chinese tourist for culture and the substantial air links between Beijing and Abu Dhabi," Mubarak al Muhairi, the director general of ADTA, said yesterday. According to government figures, China is the largest market in Asia for outbound tourism, with Chinese citizens taking 41 million overseas trips last year, an 18.6 per cent rise from the previous year.

Meanwhile, Dubai reported it saw a jump in Asian tourists, with Dubai's department of tourism and commerce carketing reporting that the number of travellers from Asia increased by 17 per cent last year. Overall numbers of tourist arrivals from Asia in Dubai were approximately double the number of arrivals from Europe. China alone sent more than 92,000 visitors to Dubai last year, up from 68,500 a year earlier.

Mr Muhariri said he hoped to attract Chinese tourists in the run-up to 2020, the year when Abu Dhabi plans to have completed a series of projects that will appeal to tourists seeking cultural attractions, such as those on Saadiyat Island, which is set to become home to branches of the Guggenheim and Louvre museums. "We have to get into this vast market now, build destination awareness and prepare our audience well in advance of the opening in Abu Dhabi of some of the world's leading cultural institutions."

In addition to opening its own offices in China, the ADTA is also looking to create closer ties with the 930 travel agencies that operate in the country. "Through familiarisation trips and regular trade workshops and by working closely with the UAE embassy in China, we hope to facilitate the start of group leisure travel from China," said Ali al Hosani, the director of promotions at ADTA. ADTA said that China would be a main target of its efforts to familiarise foreign media with tourism opportunities in Abu Dhabi.

ADTA said it aimed to attract a total of 2.7 million annual hotel guests by 2012 - up from 1.45m last year, and that tourism offices abroad in key markets and the familiarisation programme would help to achieve that goal. China is the fifth country in ADTA's overseas office network, which already includes the UK, Germany, France and Australia. ADTA expects to open an office in Italy before the end of this year.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”