On track: Efforts to develop and promote the sector are ongoing

The tourism industry hit a high note in 2014, with revenues surpassing Dh1bn ($272.2m) and the total number of overnight stays by guests growing by 72% over 2013 to reach 2.14m. As the government intensifies efforts to develop and promote the tourism sector, in line with Sheikh Saud bin Saqr Al Qasimi’s long-term vision for economic diversification, the sector is hoping to attract an increasingly wide range of regional and global visitors.

At the same time, budget carrier Air Arabia launched intra-GCC services to RAK International Airport from May 2014, while the emirate’s flagship Al Marjan Island development witnessed a surge in new hotel rooms opening throughout the year. Although the strengthening dirham and an anticipated decline in Russian visitors may pose a challenge to industry expansion in 2015, rising levels of British and regional visitors should help to counter the impact, keeping the emirate’s long-term tourism targets on track.

Revenues & Guest Nights Rise

The RAK Tourism Development Authority (RAK TDA) said in February 2015 that tourism revenues rose 44% in 2014, while the total number of nights spent by guests grew by 72% from 2013 to reach 2.14m. The robust growth continued in the first quarter of 2015 with revenue up 26% year-on-year (y-o-y). Growth was supported by dozens of hotel facilities opening in 2014, including the 655-room Rixos Bab Al Bahr Resort, the 315-room Marjan Island Resort and Spa, and Double Tree Hilton’s 484-room resort and spa, also on Al Marjan Island. The addition of these hotels saw the emirate’s total supply of hotel beds rise by two-thirds between September 2013 and September 2014 to reach 5000. The up-and-coming Al Marjan Island, a cluster of four man-made islands extending 4.5 km into the Gulf, are also expected to raise the emirate’s profile. In addition, RAK signed a deal with Marriott International in May 2015, which will see the construction of a new five-star beachfront hotel that is set to open in 2019.

Top visitor markets include the UAE, Germany, Russia, the UK, India, Ukraine and Italy in the first six months of 2014, although total visitor numbers dropped substantially in the period, falling from 577,900 in the first half of 2013 to 330,048 in the same period the following year. This was largely attributed to the effect of a weak rouble, resulting in fewer Russian tourists to the emirate. Despite this, tourist spending rose by 40% to reach $118.7m during the same period, according to media reports.

Growth Strategy

Without the significant hydrocarbons of many of its neighbours in the region, RAK’s government has turned to industry, tourism, health and education in order to diversify economic growth. The emirate has seen its tourism sector expand dramatically since RAK TDA was established in 2011, with the authority most recently setting a target of an additional 1000 hotel rooms by 2017, RAK TDA’s new CEO, Haitham Mattar, said in a statement in May 2015.

One factor that has helped in recent years is the emirate’s affordable luxury, which has given it a considerable advantage in an increasingly competitive market. Dubai’s Tri Hospitality Consulting reported that hotel rates in RAK averaged $175 per night in March 2014, compared to over $350 in Dubai.

New Visitors & Markets 

Given a slowdown in Russian arrivals, operators are looking to new visitor markets. Tourism operators have highlighted the relatively untapped European markets of the Czech Republic, Serbia and Romania, as well as Central Asian markets such as Kazakhstan and Uzbekistan. The UK is also a key target market, with visitor numbers rising by 239% y-o-y in 2014 to 131,054, making it RAK’s fourth-largest visitor market, according to RAK TDA. Meanwhile, with regional visitors representing the emirate’s largest tourism base, service expansion at the airport will help the emirate support long-term visitor growth. Air Arabia launched its RAK hub in May 2014, its second in the UAE, with 10 destinations.