Tourism Ready For Take Off

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The northern emirate of Ras Al Khaimah (RAK) is looking to the example set by neighbouring Dubai and is aiming to become a major tourist destination, according to the government organisation tasked with promoting the sector.

Tourism in RAK has been growing at an impressive rate in recent years. Between 2001 and 2005 the sector enjoyed a compound annual growth rate of 45.3%, with the number of hotel nights rising from around 35,000 to half a million last year. An impressive figure given that there were only six hotels at that time. Occupancy rates averaged around 85%, reaching as high as 88% in 2006.

In a bid to relieve the pressure RAK Tourism has announced that the number of hotel rooms in the emirate is expected to double by 2012, from the present figure of 1800 to 3700. The new developments include at least 20 new five-star hotels from internationally renowned operators.

RAK is currently most popular with European visitors, who accounted for over 80% of hotel nights in 2005. Among Europeans, British tourists come top, taking 30% of guest nights, followed by Russians on 15%. One key task for RAK Tourism will be increasing average stay length - currently standing at only 3 nights per visitor. Given RAK's growing popularity in Europe, increasing the average length of stay among this particular demographic will be the quickest route to maintaining the sector's strong growth.

Promoting RAK abroad should not be too challenging. With its 65km of largely unspoilt coast (in contrast to its neighbouring emirates, which often have either limited or over-developed coast lines), and varied topography, there is much to recommend it. Indeed, the government clearly feels RAK is on the cusp of a major tourism boom. Some $16bn of major real estate projects are currently under construction in the emirate, many of which are designed to be mixed-use and incorporate tourist facilities such as hotels and holiday villas.

One of the first projects that is to be completed is the La Hoya Bay project on Al Marjan Island. La Hoya is being developed by Khoie Group, which was the first to break ground on a mega-project in RAK. The $1.3bn project will be built in several phases, with the first - an 1100 apartment residential complex - due for completion in December. The tourist components will follow later, and are set to include 200 five star hotel units along with 700 serviced apartments, due for completion in June 2010.

According to Khoie Group Chairman Frank Khoie, RAK is well-placed to take advantage of demand within the United Arab Emirates (UAE). "Dubai has seen unprecedented growth in the past few years, however the delivery of projects has not been in pace with demand. Dubai is also becoming too crowded for many investors. These factors have given opportunities to other emirates such as Ras Al Khaimah. RAK is an aspiring market with a very high growth rate and so there are greater opportunities for larger margin premiums," he told OBG.

The government seems determined to make the most of the current opportunities. Indeed it was the government backed Rakeen that built the artificial archipelago where La Hoya Bay is being developed. Through such project the intention is to provide a platform from which RAK can launch its own high-quality, concentrated tourism and leisure facilities.

As well as Al Marjan, a further island resort complex is being developed by Saraya, which will include six top hotel brands and numerous private villas. Perhaps the largest planned project of the kind though is Mina al Arab, a $2.3bn island resort being undertaken by RAK Properties which will include 3500 residences and nine hotels in the first phase alone, and is due to become operational in 2010.

Ras Al Khaimah is well on the way to creating critical mass in terms of its tourism infrastructure, which should help it attains its goal of becoming a major beach resort. As Hilary McCormick, Manager of RAK Tourism, told BI-ME, "We are seeing rapid market gains in developments such as Al Marjan, Mina Al Arab and Saraya Islands; the momentum we have gathered will be vital in sustaining our efforts in further enhancing the tourism landscape of Ras Al Khaimah." RAK will no doubt be hoping such momentum is sufficient for a successful take off.

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