Tourism helps fuel growth in the UAE



The UAE has been investing heavily in recent years to beef up its tourism sector, and this week, a gathering of industry officials could be seen as something of a coming-out party.

As part of its economic vision for 2030, the capital is committed to building a world-class tourism infrastructure - from museums to theme parks - as well as developing cultural experiences to attract more people to the country. Abu Dhabi Tourism and Culture Authority has been hosting several events and activities to promote Abu Dhabi as a major cultural and tourism destination.

And yesterday, as The National reported, the World Travel and Tourism Council kicked off its 13th annual gathering of the minds with a keynote address by Bill Clinton, the former US president, in Abu Dhabi. The summit, organised by TCA in collaboration with Etihad Airways, explores issues related to the travel and tourism industry.

For the United Arab Emirates, the focus on tourism-related business is part of a comprehensive strategy to build a more diversified economy. Already, tourism related sectors - hotel stays, airline tickets and jobs these industries create - contribute as much as 14 per cent to the UAE's economy (an estimated Dh194 billion in 2012).

The UAE attracts millions of visitors every year to spend their holidays or explore business opportunities. Etihad and Emirates are expanding route networks, bringing not only people to these shores but jobs in the aviation sector. The country is also a major travel destination for people from neighbouring countries such as Saudi Arabia.

But there are larger benefits to all this travel as well. Because tourism can help encourage foreign investment and sow deeper relationships between host and visitor, there is a hope that building better infrastructure will also attract investors. In 2010 alone, business events contributed by Dh2.4 billion (US$653 million) into the capital economy. Over time, regional visitors eyeing markets for expansion will, we believe, consider the UAE in their plans.

The eyes of the world are on the Emirates and its tourism sector this week. With careful planning, this new attention will last well after the industry executives depart.

Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

Total cost: Dh74.10, around 0.4 per cent of the transaction

Total received: €4,756

The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.

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