Dubai overcomes economic challenges in source markets as tourism numbers edge up

Above, Dubai tourists take photos of water and light show at the Burj Khalifa. Satish Kumar / The National

The number of tourists visiting Dubai grew by 5 per cent last year despite Indian demonetisation, an economic slowdown in Saudi Arabia and Brexit hitting its three biggest source markets.

According to figures published by Department of Tourism and Commerce Marketing (DTCM) on Tuesday, the number of overnight visitors flocking to Dubai in 2016 rose to 14.9 million from 14.2 million a year earlier, led by visitors from India, Saudi Arabia and the UK.

The figure places Dubai firmly as the world’s fourth most visited city behind Bangkok, London and Paris, according to DTCM.

However, it falls flat of Dubai’s previously stated ambitions to grow at an annual rate of between 7 and 9 per cent and leaves the emirate needing to expand its numbers by nearly a third over the next three years to achieve its target of 20 million tourists by Expo 2020.

DTCM said that it had achieved the growth despite “unique disruptions” in its three largest source markets caused by the scrapping of high-value notes in India, slower economic growth in Saudi Arabia brought about by the oil price rout and a slump in the value of the pound following Britain’s decision to leave the European Union last year.

Nonetheless, DTCM said, there was a 12 per cent increase in the number of Indian tourists visiting Dubai, bringing the number of overnight visitors to 1.8 million; a 6 per cent increase in the number of tourists from Saudi Arabia, totalling 1.6 million, and a 5 per cent increase in visitor numbers from the UK, with 1.2 million holidaying in the city.

“Our growth through a period of unforeseen macro-economic upheavals particularly across our feeder markets, validates the ability of Dubai’s tourism sector to adapt and respond with agility in all our markets,” said Helal Almarri, the director general of Dubai Tourism. “[Dubai tourism was able to] effectively diversify investments and deploy strategies to minimise single-market exposure.”

Mr Almarri said despite the problems in its three biggest source markets, Dubai tourism has benefited from 20 per cent growth in the number of Chinese visitors in 2016, with the half a million mark crossed for the first time. The UAE decided last year to grant Chinese visitors visa-on-arrival and announced plans this year to give Russian visitors similar visa treatment.

And he said that a recovery in the value of the rouble in 2016 had led to 14 per cent growth in the number of Russian visitors last year bringing the total to 240,000.

In May 2015, Mr Almarri said that he expected to grow tourist numbers between 7 and 9 per cent a year to reach the emirate’s goal of attracting 20 million visitors by 2020.

That year, the department changed the way it calculated visitor numbers to take into consideration tourists staying at holiday rentals with family and friends and those from cruise ships. Previously, DTCM published data showing only hotel guests rather than overall visitor numbers.

“If you look at the growth rate last year, then it is below the sort of levels we have been used to seeing in the past,” said Harmen de Jong, a partner at Knight Frank specialising in the hospitality sector. “If Dubai is to achieve the 20 million visitors a year target then it will have to grow these numbers aggressively over the next couple of years. However, with the new theme parks opening last year as well as the other planned tourist attractions such as Blue Water Islands and the new canal, we believe this is still possible.”

According to Dubai Tourism, average hotel room rates in Dubai fell by 10.1 per cent to Dh511 a night last year from Dh569 a year earlier because of an increase in supply combined with a weak business climate on the back of lower oil prices.

The total number of hotel rooms available increased by 5 per cent to 102,845 from 98,333 a year earlier.

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