Mohamed Almulla, CEO, DXB Entertainments: Interview

 

With more than 8m tourists visiting in the first six months of 2017, what measures is the sector taking to ensure the sustainability of such growth?

ALMULLA: The UAE is transforming into an internationally recognised leisure and entertainment destination, and is developing into a global hub for tourism. There are three key drivers that will ensure sustainable tourism growth. The first is government regulatory policies, which have so far helped attract top multinational brands to the UAE, as well as increase the inflow of tourists. As such, 47 nationalities were eligible for a visa on arrival in 2016, including a great increase in the number of Chinese visitors. Second, infrastructure investment has played a key role by building good inbound and internal transport links and major infrastructure enhancements, making journeys easier. The third driver is destination planning. The concept of an integrated entertainment and retail destination is key to attracting higher footfall. Dubai now offers a wide selection of hotels to choose from, plenty of retail and restaurant outlets, theme parks and leisure attractions.

How do you rate the influence of the meetings, incentives, conferences and exhibitions (MICE) segment on Dubai’s tourism potential?

ALMULLA: Leisure travel spending amounted to $31.31bn, or 77%, of the UAE’s total tourism spending, in 2016, while business travel expenditure accounted for 23%, or $9.13bn. Business travellers have adopted a new trend with a strong desire for engaging in experiences that enhance their journey. They are also interested in extending the benefits from their business trips to improve the experience of travel with their families. This has contributed in boosting the family tourism segment, which grew by approximately 5% in 2016, and in the next three to five years it is forecast to represent more than half of the travel industry. The importance of Dubai as a MICE destination will only keep increasing and its tourism potential can further be exploited due to the city’s sophisticated infrastructure, numerous big exhibitions, draws for business travellers from around the world and constant development of tourist attractions.

What role will Expo 2020 play in driving tourism growth and boosting Dubai’s international visibility?

ALMULLA: Expo 2020 is extremely important for tourism in the UAE. It is estimated that many millions of visitors will flock to the Expo, 70% of which are expected to come from overseas. The economic benefits of a well-handled expo cannot be overlooked, as is evident from those held in cities such as Shanghai and Milan. The number of tourists visiting Milan in 2016 rose by 2.07% to 5.6m, showing that Italy’s business centre was able to reap the rewards of Expo 2015. Dubai has the ability to capitalise on the international visibility generated by the event by investing further in entertainment services, cultural offerings and local attractions.

Taking into account the current performance of the regional and global economy, and the emirate’s need to maintain market share, to what extent is there margin for a recovery of room prices in Dubai?

ALMULLA: Since the UAE hospitality sector has been predominantly occupancy driven, it can be quite difficult to fill up a hotel room without compromising on price as measured by the hotel’s average daily rate. However, destination hotels cannot be seen in the same light as non-destination accommodation. For example, we’re seeing Disney focusing on yield management more than hotel occupancy as its key performance indicator. Hotels that are linked to a theme park don’t only look to boost revenue from occupancy rates, they’re concerned with gaining income from both avenues. Profits are driven by hosting the right guests, like those who are likely to visit the parks for two days. If people stay on site for a night, they will buy more high-margin merchandise and food and beverages. High profits aren’t simply a reflection of a hotel being fully booked.

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The Report: Dubai 2018

Tourism chapter from The Report: Dubai 2018

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