Abu Dhabi: Tourism Upswing

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Abu Dhabi’s tourism sector can look to the future with optimism thanks to a growth in hotel guests, a burgeoning meetings, incentive, convention and exhibitions (MICE) segment, new hotel inventory and third-party endorsements.

“Last year we achieved 2% growth in the number of hotel guests, which was great considering it was challenging year around the world,” Mubarak Al Muhairi, the director-general of the Abu Dhabi Tourism Authority (ADTA), told OBG.

Abu Dhabi saw over 1.5m guests stay in hotels throughout 2009. Some of this growth can be attributed to the substantial number of UAE residents who decided to holiday at home – giving the hotel industry a welcomed fillip. Domestic travel in the UAE, which accounted for 42% of hotel guests, increased 26% on 2008. The global economic crisis and the spread of H1N1 are seen as the reasons for holidaymakers staying closer to home.

Even so, figures for hotel guests in the final quarter grew by 16% year-on year, a sign that foreign visitors who had decided to stay at home during the crisis were once again venturing abroad.

In 2009 foreign hotel guests mostly came from the UK (96,709), US (67,804), India (61,241), Germany (59,667), Egypt (43,304), France (34,776), Saudi Arabia (30,717) and Italy (29,653).

Although ADTA admits there is plenty more work to be done, it can be proud of its record thus far. Since 2004, when Abu Dhabi’s guest numbers totalled 960,000, the emirate has witnessed double-digit growth every year until 2009, when it reached over 1.5m.

It is this substantial surge in visitors in recent years that made occupancy and hotel prices in the emirate very high through 2009. According to Al Muhairi, this is now changing thanks to increased capacity. “In the past, supply and demand were not normal, but this has changed. We’ve passed through a difficult year in which hotels were expensive. The increased capacity and reduced prices is good news for the healthy growth of the tourism industry,” he told OBG.

Large-scale projects, such as the Yas Island development, which has several new hotels, helped boost inventory in 2009 and has led to a better-value environment for visitors looking for a bed. At the beginning of last year Abu Dhabi had 12,800 rooms, increasing to 17,500 at the year-end. More accommodation stock is due in 2010.

Meanwhile, previous government investment aimed at building a MICE segment – particularly via the Abu Dhabi National Exhibition Centre (ADNEC) – appears to be paying off. Even with the global economic slowdown, MICE’s contribution to hotel guests continued to expand by a healthy clip last year – registering a two-percentage-point increase in market share from 8% to 10%.

“Now with ADNEC, Emirates Palace and other hotels, the MICE infrastructure is huge. If you look at most surveys Abu Dhabi is second or third on the list of the most attractive places to have a meeting in the region. If you go back two of three years ago we were between ninth and 11th place,” Al Muhairi said.

ADNEC is confident the experience it has garnered in recent years will see its expansion continue. Ali Saeed Bin Harmal Al Dhaheri, managing director of ADNEC, told OBG, “In 2005 ADNEC hosted 14 events and in 2010 we expect to hold over 100. This growth is expected to continue in line with the ongoing development of Abu Dhabi.”

At the same time, the capital is focusing on developing the leisure segment further. ADTA said it has been successful in building projects that will make the emirate more attractive for holidaymakers. “The leisure segment is all about the product and if you don’t have that then it is difficult,” said Al Muhairi. “Now with Abu Dhabi’s increased connectivity, thanks to Etihad Airways, and the new products – golf courses, theme parks and resorts – it has improved the attractiveness for that segment.”

Abu Dhabi also wants to become a cultural centre within the region. Its $27bn Saadiyat Island project, which will house some of the world’s most famous museums, such as the Louvre Abu Dhabi and the Guggenheim museum project, is the cornerstone of its strategy. In March 2007 Abu Dhabi and France began discussing a 30-year cultural agreement to establish such initiatives. The subsequent agreement allowed the Musée du Louvre and other major French institutions, such as the Musée du Quai Branly, Centre Georges Pompidou, Musée d’Orsay, Versailles, Guimet and Rodin to provide long-term loans from their collections to the capital.

It appears such additions led by the tourism body are beginning to work. Last year the emirate enjoyed influential third-party endorsements as a leisure destination. The “top ten places to visit in 2010” recommendations from leading travel guides Lonely Planet and Frommer’s both included Abu Dhabi.

Such endorsements are a welcome shot in the arm for ADTA, which is now targeting 1.65m hotel guests for 2010 – a 10% rise on last year.

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