About US$1.76 billion is spent on sports and sport-related events in Dubai every year, bringing a total economic uptick of $670 million to the emirate, according to a new report from the accountancy firm Deloitte.
It states that, of the total amount spent, approximately $709m goes on seven major events – golf’s DP World Tournament and the Dubai Desert Classic, horse racing’s Dubai World Cup, the Dubai Marathon, Dubai Duty Free Tennis Championships, cycling’s Dubai Tour and the Emirates airline Dubai Rugby Sevens tournament.
A further $255m is spent on facilities and $172m on the 14,500 people working in the industry. The remaining $627m is judged as indirect and induced impact, ie locally generated business-to-business spending, as well as consumer spending from locals working in the industry in Dubai.
When the impact of local trading is stripped out, sport is estimated to have a total economic impact of $421m per year, with golf the single biggest generator. It contributes $131m, or about 30 per cent, of the total.
The three best attended events are the Dubai Duty Free Tennis Championships, the Dubai World Cup and the Rugby Sevens. Between them, they attract about 250,000 people, with the rugby event alone attracting 100,000 fans.
This week’s DP World Tour Championship – the climax to golf’s European Tour Championships – draws approximately 50,000 spectators.
Speaking at the event’s opening day yesterday, Nick Tarrant, the Dubai-based director of European Tour International, said the industry also supports airlines, hotels and the hospitality sector.
Of the $131m generated by golf, $80m is generated by the two major events, $38m by golf tourism and $120m by its golf clubs. “There are 400,000 rounds of golf a year played in the golf clubs in Dubai – 10 per cent by international guests. In the UAE, we have approximately 10,000 local golfers,” said Mr Tarrant.
“What’s exciting about golf is our mantra is ‘play where the pros play’. I’m not being critical of other sports, but I’m not sure that you come to Dubai to play tennis or horse race.”
Dubai currently has nine golf clubs offering a total of 11 courses. A series of others are in the pipeline including championship courses at Akoya By Damac and Akoya Oxygen, and a new project within the Golf district at Dubai South.
Speaking at the Aviation Investment Summit UAE last week, Tahnoon Saif, vice-president of aviation at Dubai South, said that it was due to announce “a big project” that would take up about 50 per cent of the land at its 15 square kilometre golf district. It will be a joint venture with Emaar Properties.
Julian Small, managing director of golf club operations at Jumeirah Golf Estates, which hosts the DP World Championship, said that he did not think that the new courses would create an oversupply of capacity.
“Golf courses are a great way to create amenity space in low- density, quality environments. There is room for growth. If golf reaches out to young people, to ladies and families, it will continue to deliver.”
mfahy@thenational.ae
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Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
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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.”
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
