The increase in visitors to theme parks, cultural attractions, Expo 2020, low-cost hotels, and wedding hotels in Dubai has set Dubai’s hospitality industry on track to expand more beyond 2020. New tourism incentives, such as higher quality standards, new attractions, operating venue upgrades, and brand introductions, are expected to draw new visitors and increase average length of stay. In the meantime, Dubai’s growth and appeal are being fueled by increased investment in airports, executive hotel rooms, and honeymoon suites in Dubai as well as a diversification of the source market.
The number and size of these attractions will likely increase as the Expo 2020 installations are repurposed. Significant tourism growth, such as IMG Worlds of Adventure, Dubai Parks and Resorts, and cultural attractions like The Louvre in Abu Dhabi, are expected to continue to attract leisure travelers for the next decade, according to Sidharth Mehta, partner and head of building construction and real estate at KPMG Lower Gulf.
The growth in demand from source markets India and China, according to Christopher Lund, associate director for MENA at Colliers International, is a key factor in Dubai’s tourism industry growth. The rapidly increasing middle class in both countries has resulted in an increase in the number of passport holders, allowing for more international travel. The implementation of new visa procedures for Indian and Chinese nationals in Dubai resulted in a double-digit increase in tourist numbers from these countries.
In 2017, the emirate received 15.8 million visitors. Analysts estimate that by 2020, the number of visitors will have risen to 20 million. According to KPMG data, the emirate’s demographics have been forced to diversify as a result of this development. Since last year, the number of tourists from China, Russia, Southeast Asia, Latin America, and Sub-Saharan Africa has increased.
Between Singapore and Paris, there are no major theme parks comparable to those in the UAE. “Dubai’s first forays into theme parks, combined with upcoming supply from Abu Dhabi, could secure the emirate’s position as a major theme park destination,” Mehta said.
Affordable accommodation is on the rise.
Lund believes that, now that Dubai is becoming a hotspot for both mass and niche tourism, the city’s affordable hotels sector will remain a big target for investors through 2020. In 2017, 20 percent of hotel rooms in Dubai were ranked one to three stars, compared to 43 percent in Paris.
Traditionally, owners have tended to invest in the luxury hotel industry and in brands such as the H Hotel Dubai and many more. However, as the market becomes more competitive, owners are moving to lower-priced hotels, joining the sector with less awareness of the segment, new risks, and opportunities.
Despite the COVID-19 pandemic, the UAE’s hospitality sector is on a steady upward trajectory. The UAE’s latest comprehensive safety measures deployed across various industries, as well as major government initiatives, have further cemented the country’s status as a secure destination for international travelers.
The UAE hospitality sector is expected to rebound at a record pace in 2021, according to PwC. The hospitality industry – and the service economy in general – is primed for growth this year, thanks to positive vaccination results and the upcoming Expo 2020.
According to a report conducted by global travel company Kuoni, the UAE will be the “world’s most searched tourism destination in 2021.”
In the absence of international tourists, 2020 was the year of staycations, as hotels sought to increase domestic tourism. Hotels ran creative marketing strategies with low prices, such as providing rates that included dining, free upgrades, and no cancellation fees.
The World Travel and Tourism Council estimated that travel and tourism will contribute $133.6 billion to the Middle East’s GDP by 2028, prior to the pandemic.
Experts predict that the UAE will be among the top destinations in the world to profit the most from a rapid uptick in tourism in the coming year.
The tourism and hospitality industries’ recovery will be determined by how quickly tourism destinations and tourism source markets restore confidence in one another, according to Nicolas Mayer, global industry leader for Tourism & Hospitality at PwC. “Of course, positive vaccination campaign outcomes would boost confidence, but it also relies on national authorities’ agility and the private sector’s willingness to work together positively and transparently to restore trust in commercial relationships.” “Of course, positive vaccination campaign outcomes would boost confidence, but it also relies on national authorities’ agility and the private sector’s willingness to work together positively and transparently to restore trust in commercial relationships.”
A key factor contributing to the expansion of tourism industry in Dubai is expected to be destination weddings. People are more inclined towards tying the knot at some place that provides and experience that is out of ordinary. Hotels like H Dubai providing weddings & events services are one of the factors attracting the tourists towards Dubai.
Business travel, according to Mayer, is one form of international visitor arrivals that may not recover significantly in 2021. “At the moment, the barriers to business travel are often very onerous, either in the destination country or, more often, upon return to the home country, in the form of lengthy quarantines or testing regimes. Many businesses are looking for ways to save money, and one place where many multinational corporations have opted to save money is on business travel expenses. Some forms of business travel which never return to pre-covid levels in the long run.”
