The last 10 years have seen Abu Dhabi’s visitor appeal grow rapidly thanks to the government’s prioritisation of tourism and culture as part of the emirate’s long-term strategy for economic diversification. With an array of high-end accommodation already in place and Louvre Abu Dhabi shining as the emirate’s latest addition to a growing number of attractions, sector authorities are looking to further expand offerings by developing new segments such as cruise tourism, medical tourism and ecotourism, as well as by continuing to develop and promote Abu Dhabi’s identity as a destination for authentic cultural and historical experiences.
Strategic Target
The Abu Dhabi Economic Vision 2030, launched in 2008, charts a development path modelled on the successful “transformation economies” of New Zealand, Norway and Ireland, with tourism targeted as one of its key sectors of focus. The intervening years have seen the emirate stay true to this trajectory, which was outlined with a focus on building a thriving hotel industry and drawing a larger number of high-end tourists, while leveraging the emirate’s accessibility, appealing weather, beaches, islands and cultural heritage. Other aims include substantial investment in the emirate’s touristic appeal, through the Saadiyat Island Cultural District, and developing a cluster of museums, cultural and educational institutions.
The government’s commitment to the sector was reiterated in the five-year Abu Dhabi Plan, published in 2016. Eight of the plan’s 25 goals are intended to contribute to the tourist experience, from the direct goal of creating an “original and attractive tourism destination”, to the related goals of preserving natural heritage and fostering an effective transportation system. Within the first goal, the plan sets out six programmes, respectively targeting tourism in the areas of business travel, events and major festivals, culture, marketing, improving experiences in shopping centres, and promoting and developing tourist areas.
Economic Contribution
According to the World Travel & Tourism Council (WTTC), in its “City Travel and Tourism Impact 2017” report, Abu Dhabi’s tourism sector experienced the highest growth in the region between 2006 and 2016 in terms of both spending and contribution to GDP. This also made Abu Dhabi City the fastest-growing city outside Asia in terms of tourism during this period. In 2016 the sector made up 2.7% of the emirate’s GDP, amounting to $3.2bn in value. Although tourism’s economic contribution grew by 12.8% over the 10-year period, the WTTC forecasts that this will moderate to 7.1% between 2016 and 2026, resulting in an annual GDP contribution of $6.4bn by 2026.
Sector Management & Regulation
Responsible for the promotion of Abu Dhabi tourism and culture at home and abroad, as well as regulation and licensing, the Department of Culture and Tourism – Abu Dhabi (DCT Abu Dhabi) is the sector’s most important government body. Formerly known as the Abu Dhabi Tourism and Culture Authority, the institution was renamed by royal decree in September 2017. Recent policy documents and statements by DCT Abu Dhabi make it clear that the directorate is placing a particular emphasis on developing the emirate’s indigenous attractions. “Everything can be copied except what’s unique to you,” Ali Hassan Al Shaiba, acting executive director of marketing and communications at DCT Abu Dhabi, told OBG. “We’re trying to position ourselves as a destination for authenticity, art, culture and heritage.”
Assisting with many of these aims is the Tourism Development & Investment Company (TDIC), which was established in 2006 and is the master developer of many large tourist and cultural projects across the emirate. TDIC is 100% state owned and has a specific strategic mandate to fulfil the government’s aim of becoming a global tourism destination. Saadiyat Island is the company’s flagship project, while it is also behind projects such as the Eastern Mangroves Hotel and residential development, the Westin Abu Dhabi, Abu Dhabi Golf Club and Marsa Al Bateen, a redevelopment of one of the oldest districts of the city. Outside the capital, TDIC is active in Al Dhafra, the Western Region, having developed the Qasr Al Sarab Desert Resort and Spa.
Another key body is the National Corporation for Tourism & Hotels (NCTH), which was formed in 1996 and now owns and manages some of the emirate’s most prominent hotels and resorts. These include the Intercontinental Hotel Abu Dhabi, the Danat Al Ain Resort, Danat Jebel Dhanna Resort, Tilal Liwa, Al Raha Beach Hotel and the Dhafra Beach Hotel. The NCTH, a listed company, was founded to promote the emirate around the world as a tourism destination and now includes asset management, catering and hospitality divisions. Another player is Abu Dhabi National Hotels, a hotel and resort owner, and asset management company, which owns a range of highend accommodation in the emirate, including The Ritz Carlton Abu Dhabi, the Sheraton Abu Dhabi and the Hilton Al Ain, among others.
According to Yves Tarabout, the complex general manager at the Sheraton and Le Meridien Abu Dhabi, open communication between regulators and sector stakeholders have been key to the success of the hospitality segment. “There is a lot of communication with government bodies, through meetings, brainstorming sessions and so on,” Tarabout told OBG. “It feels like we are one unit working together for the benefit of the destination and making sure customers get the service they expect.”
Capital Identity
Accounting for 86.7% of the total land area of the UAE, according to the Statistics Centre – Abu Dhabi, along with 700 km of its coastline and around 200 of its major and minor offshore islands, the emirate of Abu Dhabi is also responsible for a majority share of the UAE’s income. This is largely derived from Abu Dhabi’s extensive oil and gas fields, which account for a major part of the country’s 97.8bn barrels of total proven oil reserves, according to the “BP Statistical Review of World Energy June 2018”.
Since 1971, when Sheikh Zayed bin Sultan Al Nahyan was elected by the emirates’ rulers as the country’s founding president, Abu Dhabi City has been the UAE’s capital. The emirate’s size and status, brought by the capital, shape its identity as a destination; however, rather than competing directly with Dubai as a specialised destination for business and leisure travellers, the government presents the emirate as a complementary alternative, emphasising its national heritage, natural diversity, cultural institutions and family-friendly attractions.
City of Islands
Abu Dhabi City is the emirate’s largest population centre and its main focus of culture and attractions. The heart of the city lies on the island of Abu Dhabi, a historical focal point since its settlement by the Bani Yas tribe, originally from Liwa in the south of the emirate.
One of the island’s most famous sites is Sheikh Zayed Grand Mosque. Capable of holding 40,000 worshippers, the structure is clad in Macedonian white marble and took 20 years to build. Since its opening in 2007 it has been a key attraction as well as the largest mosque in the UAE. Abu Dhabi Island is connected to the mainland by the Maqta, Mussafah and Sheikh Zayed bridges, which were completed in 1967, 1978 and 2010, respectively. There are also connections to other surrounding islands, such as Saadiyat and Al Reem. Recently, the population of these has expanded with the construction of Yas Island, the world’s second-largest artificial island.
Since initiation of the Yas Island project in 2006, the company responsible for its development and management, Miral Asset Management, has invested more than $40bn into creating an integrated destination for hospitality, real estate, leisure, events and entertainment. Having attracted more than 22m visitors in 2016, the company aims to attract 48m people to the island annually by 2022. Yas Island is home to an increasing number of tourist assets, including Ferrari World Abu Dhabi, Yas Waterworld, the Yas Links golf course, Warner Bros. World and Yas Marina Circuit, as well as seven hotels.
Opened in December 2010, Ferrari World Abu Dhabi is a large-scale theme park best known for its roller coasters, including the world’s fastest, the Formula Rossa. The newest of the island’s theme parks is Warner Bros. World, built at a cost of $1bn. Having opened in July 2018, the indoor park is divided into six themed lands based around the brand’s characters, such as Batman, Superman and the Flintstones. Another park currently under development is the $100m Clymb, which will include the world’s widest flight chamber and highest climbing wall. Other upcoming plans for the island include the opening of the first Sea World outside the US. In addition, the $3.2bn Yas Bay development in partnership with Aldar Properties, is set to include Yas Arena, an 18,000-capacity indoor venue, and a project with transport solutions provider SkyTran to build a transit pod system that uses magnetic technology to enable frictionless travel around the island.
Centre of Culture
Saadiyat Island is the flagship project of TDIC, which planned the 27-sq-km island with an emphasis on low density and environmental sensitivity. The island is divided into a number of different districts, the most important of which are the Saadiyat Cultural District, Saadiyat Beach District and Saadiyat Marina District.
The Saadiyat Cultural District is the centrepiece of TDIC’s vision for tourism on the island, with Guggenheim Abu Dhabi and Zayed National Museum set to join the recently opened Louvre Abu Dhabi in helping it become one of the region’s foremost concentrations of cultural attractions.
The product of a $1.2bn deal between the UAE and the French government, Louvre Abu Dhabi opened in November 2017 having been in development since 2007. Drawing on partnerships with 12 major French cultural institutions, including the Centre Pompidou, the Musée d’Orsay and the Musée du Louvre itself, the Louvre Abu Dhabi is intended as a universal museum. Designed by Pritzker-prize winning French architect Jean Nouvel, the structure is surrounded by sea water, and distinguished by an eight-layered steel and aluminium mesh dome, whose lit-up 180m diameter frame can be seen from a distance at night. The museum attracted more than 1m visitors in its first year, according to its director, Manuel Rabaté, averaging 2000-5000 guests per day and up to 10,000 on its busiest days.
While the collection at Louvre Abu Dhabi reaches back to early human history, Guggenheim Abu Dhabi is set to house a much more modern collection, displaying work from the 1960s onwards. Originally set in motion in 2006 and designed by Frank Gehry, the project, when completed, will dwarf Louvre Abu Dhabi in size, encompassing 13,000 sq metres of gallery space, 18,000 sq metres of exhibition space and a 350-seat theatre. The museum has begun building its collection, acquiring works by international artists such as Ai Wei Wei, as well as local Emirati artists such as Hassan Sharif. To date, three exhibitions have displayed works from the collection at Manarat Al Saadiyat, a purpose-built visitor centre and museum, giving visitors a taste of what to expect when the museum opens.
Meanwhile, the Zayed National Museum will narrate the life and times of the UAE’s founding president, Sheikh Zayed bin Sultan Al Nahyan, as well as tell the story of the country itself. With Foster + Partners, the firm of UK architect Sir Norman Foster, acting as the project’s designers, the anticipated structure will be characterised by a set of rising, feather-like disks, intended to pay homage to the former president’s love of falconry. Preparatory works on the project were completed in October 2017, with an award for the construction expected in 2018, though no updates had been announced as of December 2018. In May 2018 local real estate firm Aldar Properties acquired $1bn worth of assets from TDIC on Saadiyat Island. These include the Eastern Mangroves complex, Saadiyat Island district cooling assets, the Cranleigh School Abu Dhabi, Westin Golf & Spa and other community retail and leisure assets.
Beyond the Capital
Beyond Abu Dhabi City are the regions of Al Dhafra and Al Ain, which are home to many of the emirate’s most significant cultural sites and natural heritage. The Al Dhafra Region encompasses much of Abu Dhabi’s coastline, including Sir Bani Yas Island and Delma Island. The region also contains Liwa, an inland arc of oases on the northern edge of the so-called Empty Quarter, or Rub Al Khali, which is home to the world’s largest sand dunes outside the Sahara.
Al Ain, meanwhile, offers a cluster of sites of historical and cultural interest at a distance of two hour’s drive from the capital. The most significant attraction at Al Ain is the UAE’s first UNESCO World Heritage site, the Al Ain Oasis. The heritage site provides an opportunity for visitors to wander through a living and functioning oasis landscape. The oasis’ ancient system of aflaj – irrigation channels and reservoirs – is fully functioning and is explained at a purpose-built eco-centre at the site entrance.
The heritage site includes six oases within Al Ain, as well as three nearby archaeological sites: Hili Archaeological Park, Bronze Age tombs centred around the 2000-BCE Hili Grand Tomb; Jebel Hafeet Tombs, a series of 5000-year-old single-chamber burial sites; and Bida Bint Saud, which includes millennia-old tombs as well as a 3000-year-old falaj (the singular of aflaj), one of the oldest ever discovered. Al Ain Oasis is also located adjacent to the city’s two museums: Al Ain National Museum to the east and Al Ain Palace Museum to the west. Al Ain Oasis is just one of 25 heritage sites that DCT Abu Dhabi plans to open over the next five years around the emirate.
Countries of Origin
The most significant recent trend in terms of visitor source markets has been an rising number of arrivals from China. Due to concerted marketing efforts, China became the biggest international source market in 2017 for Abu Dhabi tourism, growing by 61% to reach 372,000 visitors (see analysis). The largest source of European guests that year was the UK, with arrivals from there growing by 14% to reach 271,000. Other notable increases include India and the US, whose visitor numbers in 2017 rose by 24% and 11%, respectively.
In terms of hotel guests, the rest of the UAE remains the number-one source market for hotels in Abu Dhabi, accounting for 30.7% of all guests in 2017 and 28.6% guests in the first half of 2018. However, outside of domestic travellers, regional tourism was more limited, with GCC travellers making up 5.8% and 4.5% of all hotel guests in 2017 and in the first six months of 2018, respectively, while travellers from other Arab countries comprised 11% and 11.8% over these same periods.
In keeping with the spike in Chinese guests, the total for all Asian countries grew from 25.4% in 2017 to 27.4% as of June 2018, while European countries fluctuated only slightly during these time periods from 17.7% to 17.8%. The African market, while only accounting for 1.5% of visits through all of 2017 and the first half of 2018, posted notable growth, expanding by 14.4% and 10.4%, respectively.
While previously only visitors from certain countries could receive visas on arrival, in November 2017 DCT Abu Dhabi implemented a transit visa, which allows visitors from all countries to receive a 96-hour visa to explore Abu Dhabi before catching a connecting flight. The visa, which is issued at a cost of Dh300 ($82), was expected to have boosted visitor numbers in 2018 by facilitating stopover tourism.
Air Travel
Abu Dhabi has five airports, all of which are owned and operated by the Abu Dhabi Airports Company (ADAC). The largest of these is Abu Dhabi International Airport (AUH), which is situated 30 km east of the city centre. AUH has three terminals, with the third being an interim facility used ahead of the opening of the Midfield Terminal Building (MTB) in 2019. The MTB will be the largest building in the emirate, with the capacity to process 30m passengers per year, or 8500 passengers per hour, via 65 aircraft gates. Expanding the airport’s capacity is seen as a key priority, as the number of passenger arrivals continues to grow.
In 2017 throughput at AUH totalled 23.4m passengers. Though this was a slight slowdown from the 24.48m recorded in 2016, the Airports Council International, a global trade representative of airports, reported that AUH was the fastest growing in the world during the 2007-17 period. As of early 2018, AUH operated regular flights to some 100 destinations worldwide, via more than 80 airlines. “Abu Dhabi has always been a fast-growing business hub, and is also growing into a tourist destination,” Hasan Demir, general manager at Turkish Airlines Abu Dhabi, told OBG. “Reasons for travel to Abu Dhabi are usually a mix of business and business-related leisure, though tourists can travel to Abu Dhabi for relaxation and cultural immersion.”
ADAC also owns and operates Al Ain International Airport and Al Bateen Executive Airport, which was previously the capital’s main terminal but now caters exclusively to business jets and government planes. Al Ain International Airport, located some 18 km north-west of Al Ain, facilitated 74,800 passengers in 2017. Sir Bani Yas and Delma Island airports complete ADAC’s portfolio, with both of these key elements included in TDIC and DCT Abu Dhabi’s strategies for developing the Al Dhafra Region.
Sir Bani Yas is the centrepiece of the Desert Islands, a larger tourism project that is currently under development, which will encompass a total of eight islands, including Delma Island and six of the nearby Discovery Islands. The locations are home to some of the most important archaeological and ecological sites in the Gulf. According to the plan, resorts will be located on Sir Bani Yas and Delma, leaving the Discovery Islands undeveloped yet accessible for excursions by nature enthusiasts.
Hotels
As of September 2018 Abu Dhabi had a total of 162 hotels with 31,506 rooms. Abu Dhabi City accounts for the majority of these, with a total of 132 hotels and over 27,800 rooms. Al Dhafra had 11 hotels with about 1200 rooms and Al Ain had 19 hotels with around 2490 rooms. According to a February 2018 report by Colliers International, 61% of hotel supply in Abu Dhabi is rated four or five stars.
The total number of hotel guests visiting Abu Dhabi in 2017 increased by 9.8% to reach 4.9m, according to DCT Abu Dhabi. The increase was even more pronounced in Abu Dhabi City, where the number rose by 10.3% to reach 4.3m. A full calendar of events in the fourth quarter was a major draw for visitors. Among the events hosted were the WorldSkills vocational skills competition, ICANN60 conference, the Abu Dhabi Petroleum Exhibition and Conference, the International Diabetes Federation congress and the Formula 1 Etihad Airways Abu Dhabi Grand Prix. Despite an increase in overall volume, 2017 was not without its challenges for stakeholders. Average length of stay decreased by 7% and overall revenue decreased by 6.8%, as macroeconomic factors tightened travellers’ purse strings.
Facing Challenges
DCT Abu Dhabi have remained positive in their outlook for the segment, announcing in February 2018 the aim of registering 6m guests by the end of the year. This figure would amount to a 20% increase on the 2017 total. Nevertheless, while the total numbers of guests increased during the first three quarters of 2018, revenue and average room rate declined.
For instance, February saw the number of hotel guests staying in the emirate rise by 15.2% year-onyear (y-o-y) to reach 406,000, more than doubling the growth of 7.4% posted in January over the previous year. Nonetheless, average hotel occupancy rates for February stood at 77%, representing a 0.5% percentage-point increase over the same month in 2017. Furthermore, total hotel revenue and the average room rate dropped by 10% and 13.2%, respectively. In the first nine months of the year the number of hotel guests showed continued growth of 4.3% y-o-y, reaching a total of 3.7m. The average occupancy rate stood at 70% after the first three quarters of 2018, marking a modest gain of 1.3% percentage points y-o-y. Nevertheless, during this period hotel revenue decreased by 3.7%, falling to Dh3.7bn ($1bn), while the average nightly room rate fell 5.6% y-o-y, to Dh322 ($87).
With occupancy rates expected to rise in the fourth quarter thanks to the events season, which will include ADIPEC 2018 and the Formula 1 Etihad Airways Grand Prix in December, Tarabout told OBG he was optimistic that 2019 will see a return to higher levels of profitability.
Segment stakeholders received a major boost in June 2018 with the news that the Abu Dhabi Executive Committee had approved a proposal by DCT Abu Dhabi to reduce municipal fees for hotel rooms from Dh15 ($4.08) to Dh10 ($2.72) per room per night. The Saadiyat Beach Hotel and Pearl Rotana Capital Centre were among the major new hotel openings in the first quarter of 2018, while approximately 1400 more rooms were set to come on-line in 2018, including the openings of the Fairmont Marina, Beach Arjan by Rotana and Edition Al Bateen Harbour Hotel which occurred over the year. According to Colliers International, a total of 7700 more new rooms are also in the emirate’s development pipeline, with 22% of the new supply expected to be developed on Saadiyat Island.
Events
While 20 years ago Abu Dhabi was a distant outpost on the international events calendar, the last 10 years have seen the emirate develop the infrastructure to host a range of internationally recognised sports, cultural celebrations, entertainment and conferences. As a result, each year now sees the emirate filled with events that combine home-grown occasions with large-scale spectacles drawing on international partnerships.
A key aspect of the revamped events profile has been the ability to attract international sporting competitions. At the centre of this promotion is the Abu Dhabi Sports Council (ADSC), originally established in 2006 and restructured into an independent corporation through regulatory change in 2011. ADSC is largely tasked with building the emirate’s global reputation as a sporting destination by incorporating international best practices, encouraging more active lifestyles and promoting investment in the emirate. Major international sporting events secured by ADSC have brought in hundreds of thousands of visitors in recent years.
Perhaps the biggest of these is the Formula 1 Etihad Airways Abu Dhabi Grand Prix, which has been hosted since 2009 at the Hermann Tilke-designed Yas Marina Circuit on Yas Island. Typically taking place in November as the closing race of the Formula 1 calendar, the race is one of Abu Dhabi’s biggest attractions for international visitors, with attendance reaching 195,000 in both 2016 and 2017. The annual event has also played a major role in developing the emirate’s calibre as a live music destination, with the Yasalam After-Race Concerts becoming known in their own right for hosting a series of major international headliners, including Beyoncé, Guns ‘N’ Roses, Jay-Z, Prince, Paul McCartney, Rihanna, Kings of Leon and Eminem.
Hosting the FIFA Club World Cup UAE represents another win for the emirate, after the tournaments came to the emirate in 2009, 2010 and 2017, the event took place in Abu Dhabi again for a fourth time in December 2018, with seven matches having taken place over 10 days at the Zayed Sports City Stadium and the Hazza bin Zayed Stadium at Al Ain.
Other regular international sporting events in the emirate include the Abu Dhabi HSBC Golf Championship, the ITU World Triathlon Series and the Abu Dhabi Tour, a road cycling stage race that will be combined in 2019 to form a new UAE Tour. In the first quarter of 2019 the emirate will also host two major quadrennial sporting events, the AFC Asian Cup and the Special Olympics World Games, which is estimated will bring in 7000 athletes from more than 170 countries, as well as 20,000 volunteers and around 500,000 spectators.
Much of the successful development in this segment of the industry is due to the government’s progressive approach to regulation. “Since the industry was in its infancy, the authorities have done everything possible to ensure that regulations around entertainment are in line with best practice globally,” John Lickrish, CEO of Flash Entertainment, an entertainment, event and leisure firm, told OBG. “When compared to other places I’ve worked, like North America, South America or the EU, regulations here are much more streamlined. There’s plenty of regulation but only as much as is necessary.”
Gains in MICE
Abu Dhabi’s programme for developing tourism over the past few years has also encompassed the meetings, incentives, conferences and exhibitions (MICE) sector. The Abu Dhabi Convention Bureau was established as a branch of DCT Abu Dhabi in 2013 to market the emirate as an international business travel destination and promote activities related to the segment.
One of the bureau’s key programmes is Advantage Abu Dhabi, which provides additional incentives to events whose content is in line with the priorities of Vision 2030. Promotional activities and development have resulted in rapid improvements to the emirate’s MICE reputation. In the International Congress and Convention Association’s 2016 destination rankings, Abu Dhabi City was placed at 74th globally. This impressive showing followed significant advances in the preceding years, with the city rising 161 places in the associations rankings in just three years, from 234th in the world in 2012 to 73rd in 2015. In 2017 Abu Dhabi City was also named Overseas Luxury MICE Destination of the Year at the China Travel and Meeting Industry Awards held in Beijing.
Winning Bids
Another central sector body is the Abu Dhabi National Exhibition Company (ADNEC), whose flagship venue, the Abu Dhabi National Exhibition Centre, is the largest such venue in the Middle East. DCT Abu Dhabi works closely with ADNEC and its sales team to secure large conference bids. ADNEC also operates the Al Ain Convention Centre, Aloft Abu Dhabi, the Hyatt Capital Gate Abu Dhabi, and the Capital Gate and Capital Centre in Abu Dhabi City, next to the exhibition centre. In 2016 ADNEC’s Abu Dhabi and Al Ain venues hosted 480 local and international events between them, up from 369 a year beforehand, and attracted 1.5m visitors.
Each year sees growing numbers of high-profile events organised in the emirate. Among the biggest of these is the International Defence Exhibition and Conference, which registered more than 100,000 attendees in 2017. Additionally, WorldSkills, a vocational skills competition held in October 2017, also drew 100,000 spectators across three days, while in December 2017 the International Diabetes Federation congress welcomed 8000 members of the global diabetes community from 182 countries to discuss global diabetes policies.
In 2017 the Abu Dhabi Convention Bureau successfully bid to host eight further conferences in the coming years, at an expected combined value of Dh600m ($163.3m). These conferences, whose delegates will total more than 45,000, include the World Urban Forum and the World Congress of Nephrology, both of which are scheduled for 2020.
Outlook
As the tourism sector develops, growth in the hospitality segment is likely to moderate, accompanied by greater investment in the emerging medical and cruise tourism segments (see analysis). A strong pipeline of events, as well as new and coming Yas Island offerings, such as Warner Bros. World and Clymb, should keep visitor interest high, while the emirate waits on specifics for the Zayed National Museum and Guggenheim Abu Dhabi.
A major guarantee of the sector’s future growth was provided in June 2018, when Sheikh Mohamed bin Zayed Al Nahyan, crown prince of Abu Dhabi and the deputy supreme commander of the UAE armed forces, announced a Dh50bn ($13.6bn) economic stimulus package for the emirate. Although an official breakdown of the package had yet to be finalised at the time of writing, the crown prince outlined a key role for tourism, with ecotourism and cultural tourism singled out as priority growth segments.
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