Dubai: A safe haven

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With some of the region’s leading tourism destinations such as Egypt, Tunisia and Jordan still affected by domestic unrest, Dubai is offering a safe haven for foreign holiday makers keen on a Middle Eastern getaway. Arrival numbers are up, hotels are benefitting from nearly record-high occupancy rates and business tourism is on the rise as professionals seek quieter and safer places to do deals.

Even before the unrest in the Middle East and North Africa (MENA) region, Dubai’s tourism sector was posting solid numbers. Figures from Dubai Airports put Dubai International Airport’s total passenger movements for 2010 at 47.2m, a 15.3% rise on the 2009 total. According to Paul Griffiths, Dubai airports’ chief executive, the volatility in Egypt and other parts of MENA are not having a negative impact on Dubai’s travel and tourism industry.

“Actually, I think it is quite positive,” Griffiths told the Reuters news agency in March 2011. “Some people that were considering other areas are coming to Dubai because they are seeing it as a very stable place to be.”

This stability is paying further dividends, with passenger numbers at Dubai International up 5.8% year-on-year in March according to Dubai Airports, and the Dubai Chamber of Commerce predicting total tourist and business traffic will hit 52m in 2011. This increased traffic is being translated into longer tourist stays, with industry figures showing Dubai hotels averaging 82% occupancy over the first two months of the year, only slightly down from 86% in 2008, according to Jones Lang LaSalle’s “Dubai Real Estate Market Overview Q1 2011”. Clearly, the perception of risk has not come to characterise all MENA nations.

Dubai’s successes early in the year contrast sharply with the decline seen in Egypt, the historic regional leader in tourism. Occupancy rates fell to 5% in February, though there has been something of a recovery, with rates rising to the 30% mark in March. However, this is still less than half the normal level for that time of year. Visitor arrivals in Egypt for February and March were down 80% and 60% on average, respectively, with more than 1m foreign tourists cutting short or canceling their reservations, according to figures released by the Egyptian Tourism Ministry in mid-April.

Egypt’s difficulties would appear to have bolstered Dubai’s prospects, with an advisory note issued by Barclays Capital in early April predicting Dubai’s economy and tourism sector would flourish this year. The report forecast that the “gradual revival in Dubai’s trade and tourism activity benefited from turmoil in Egypt and Tunisia, and heightened political tension in Lebanon”.

The ratings agency Standard & Poor’s (S&P) also highlighted the improving fortunes of Dubai’s tourism sector, saying in a note issued in mid-April that the industry had seen increases in the past quarter. The S&P report was clear that the emirate was being seen as a safe haven in times of regional unrest.

Of course, there are no guarantees that the growth in arrivals can be sustained when a greater measure of stability returns to other regional tourism destinations. The challenge for Dubai’s tourism industry is to maintain the momentum it has built up, strengthening its brand recognition and product offering.

The government of Dubai has long identified tourism as one of the key pillars of the emirate’s economy, along with other sectors such as finance, real estate and services. The state has invested heavily in infrastructure to support the tourism industry, with Dubai now boasting some of the world’s best air and maritime port facilities, along with a modern public transport system and road network.

State agencies and the private sector have independently and cooperatively developed a full range of accommodation, hospitality and entertainment options. What Dubai has, after years of planning and building, is the appeal of new malls, towering hotels, leisure attractions and waterfront resorts. It also offers a greater guarantee of security than its MENA counterparts, an asset tourism officials and professionals will likely depend on to help secure the sector’s future.

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