Dubai on its way to becoming one of the world’s most popular tourist destinations


With a significant number of new hotels set to open, a raft of private sector-led investments in leisure and business facilities, and the government’s ambitious transport infrastructure development plan well under way, Dubai’s tourism industry is poised for a period of considerable growth in 2018.

While the emirate has long been a tourist destination in the Middle East and a key stopover point for international air travellers, under the government’s current sector blueprint Dubai is set to become one of the most popular destinations in the world. The emirate’s reputation is fuelled by the rising number of tourist arrivals in recent years.

According data from the Department of Tourism and Commerce Marketing (DTCM), the government’s tourism arm, up until the third quarter of 2017, 11.6m people had visited Dubai for at least one night. In 2016 some 14.9m people visited, representing an increase of 13% on 2014, when the emirate welcomed 13.2m visitors, and growth of 5% on 14.2m visitors in 2015. With this expansion in mind, many local players are optimistic that Dubai will meet its medium-term target of 20m tourist arrivals annually by 2020.

Current Challenges

Despite widespread confidence about Dubai’s long-term prospects for tourism growth, in the short-term the sector faces a range of challenges. Like many other industries across the UAE and the broader Gulf region, Dubai’s tourism sector has been negatively affected since 2014 by the falling price of crude oil. The emirate is not an oil producer, but it is a major exporter of energy sector services throughout the Middle East.

Through 2015 and 2016 the economic pressure manifested in curtailed public and private sector spending, stagnant salary growth and inflation, the latter of which can be linked to economic expansion during the 2012-14 period. The sectors that were hit the hardest include construction, manufacturing and real estate, with mid-2016 property values down by as much as a quarter on 2014.

Lastly, the strength – until very recently – of the dollar has put additional pressure on many local exporters, which do business largely in the US currency. The tourism industry felt the knock-on effects of this situation, with hotel rates falling, even as occupancy remained relatively steady.

“Dubai is an expensive place to live and, increasingly, to visit, largely due to the current strength of the US dollar against other global currencies,” Mark Lee, the general manager of the Media One Hotel, a four-star property in Media City, told OBG. “I think this year the economy has probably reached a turnaround point, however. I see a slight recovery in 2018 and stronger growth in the years following.”

Historical Crossroads

Dubai has long been a major destination for visitors to the Gulf region. The area that now encompasses the UAE and coastal Oman has been a major trading centre for at least 2000 years. Ships from the Indian subcontinent, East Asia and Europe have been a regular feature of the region for centuries. In the 18th and 19th centuries the emirate benefitted from the development of the pearling industry, which served as the largest local industry for over a century, supporting a large fleet of pearling vessels based out of Dubai Creek.

Since independence in 1971, hydrocarbons have been the UAE’s primary economic activity. During this early period Dubai, which does not have the large energy resources of many of its neighbours, worked to develop its non-oil economy. Tourism has been a major beneficiary of this effort. The emirate’s first hotels, which were owned and operated by local businessmen, were the Airlines Hotel, which opened in 1958, and the Ambassador, which opened in 1968, both in the Deira neighbourhood, near Dubai Creek. Over the following two decades a number of international hotel operators set up shop in the rapidly growing emirate, many of them in Deira. Early developers here included InterContinental and Hyatt, among others.

By the 1990s Dubai’s reputation as a major, high-end tourist destination in the Gulf region had been established, in large part as a result of strategic investments in the sector by the Dubai Commerce and Tourism Promotion Board (DCTPB), an emirate-level government entity launched in 1989 with a mandate to promote Dubai as a tourist destination to business and luxury leisure travellers around the world. The board’s efforts were successful. For example, in 1993, 10 international sporting events were staged in the emirate, and a year later seven airlines launched direct flights from the UK to Dubai.

The reorganisation of the DCTPB into the DTCM in 1997 signalled a turning point in the tourism sector. Whereas the board had been concerned primarily with marketing, it now has a much wider remit. This now includes planning and implementing large-scale, sector-wide development strategies, measuring their progress, as well as collecting and reporting reliable, comparable statistics for the industry. Since its establishment, the DTCM has been at the centre of Dubai’s development as one of the most successful tourism destinations in the Middle East.

Industry Snapshot

The DTCM recorded increases in international visitor numbers from 13.2m in 2014 to 14.2m in 2015 and 14.9m in 2016. As of the third quarter of 2017, 11.6m people visited. If current arrival rates hold, in 2017 the emirate is expected to see almost 16.4m international arrivals in total, which puts the industry well on its way to hitting its 2020 target of 20m annual visitors.

In the first three quarters of 2017 the top three regions with most incoming tourists to Dubai were other GCC countries at 21% of the total; Western Europe at 20%; and the Indian subcontinent at 19%. Meanwhile, 11% of visitors came from the broader MENA region – not including the GCC – while 11% came from East Asia (including North and Southeast Asia). Russian and Eastern European visitors made up 6% of the total, while 6% came from the Americas, 5% came from Africa and 2% were from the region of Australasia.

Digging into these numbers slightly, Dubai’s top tourist source market in the 10 months of 2017 was India, which has been steadily climbing the charts in recent years. Indeed, 19% more Indian tourists were recorded as compared to the same period the previous year, according to the DTCM data. The second-largest source market between January and October 2017 was Saudi Arabia, though the number of visitors from the kingdom declined by 3% on the same period the previous year.

Next were tourists from the UK, followed by those from Oman, China, the US, Pakistan, Iran, Germany and Russia, to round out the top 10. In addition to India, perhaps the key growth market at the moment is China, which saw an uptick of 48% in the first three quarters of 2017 compared to the same period in 2016, and is widely expected to be a leading source of international visitors in Dubai within the next few years. Iran and Russia are also major sources of new tourist arrivals, with growth of 13% and 98%, respectively, comparing year-on-year between October 2016 and 2017. The number of visitors from Oman declined by 22% during that time.

According to the “Travel and Tourism Economic Impact 2017 UAE” report compiled by the World Travel and Tourism Council (WTTC), the tourism industry contributed Dh68.5bn ($18.6bn) to the country in 2016, which was equal to 5.2% of GDP.

While these figures represent only slight growth from 2015, they continue the upwards trend from previous years. Tourism contributed around Dh50bn ($13.6bn), or 3.5% of the total economy, in 2012; approximately Dh58bn ($15.8bn), or 3.8% of GDP in 2013; and in the region of Dh65bn ($17.7bn), or 4% in 2014. The WTTC forecasts the UAE’s tourism GDP to expand by 3.2% in 2017 and some 5.1% per annum over the next decade, reaching Dh116.1bn ($31.6bn), or 5.4% of GDP, in 2027.

In 2016 capital investments in tourism by the government and private players, such as hotel development companies, totalled Dh26.2bn ($7.1bn), which was equal to around 7% of total investments in the UAE’s economy over the course of the year, as reported by the WTTC. This figure is expected to increase considerably by 2020, reflecting Dubai’s push to prepare for Expo 2020. The WTTC projects investments in travel and tourism will grow by 11% per annum up to 2027, at which point they will have reached Dh74.5bn ($20.3bn), or 11.2% of total investments. As the largest tourism industry in the UAE, Dubai would be expected to account for the bulk of this expenditure.

Oversight & Regulation

The DTCM is made up of a number of sub-departments and organisations. The Dubai Corporation for Tourism and Commerce Marketing is in charge of emirate-level branding, promotion and marketing of Dubai around the world.

The Dubai Festivals and Retail Establishment oversees the emirate’s growing slate of events and works with retailers to further develop Dubai’s reputation as a shopping hub. Dubai Business Events is focused on turning the emirate into a major destination in the meetings, incentives, conferences and events (MICE) market, plus promoting the emirate’s nascent but rapidly growing cruise industry (see Maritime chapter). Lastly, the Regulatory Affairs unit is in charge of the tourism industry’s classification and licensing schemes for hotels, tour operators and various other tourism entities.

Regulatory Changes

As part of its mandate, the DTCM has lobbied the UAE Cabinet to implement a number of regulatory changes in recent years. In November 2016 the Cabinet allowed Chinese travellers to obtain a visa on arrival to the UAE, a policy that was subsequently applied to Russian nationals in February 2017. In March 2017 the federal government announced that Indian passport holders with a valid US visa or US green card – the latter of which denotes a permanent resident of the US – would also be allowed to purchase a visa on arrival to the UAE; this was extended to holders of UK and EU residence visas on September 2017. The visa would be valid for two weeks, with the option to extend it once for another two weeks for a fee.

“Ultimately, our collective aim is to make it as easy and seamless as possible for any prospective tourist from our diversified base of source markets to visit and revisit Dubai,” Helal Saeed Almarri, the director-general of the DTCM, told local media in March 2017. These newly relaxed entry requirements have resulted in rapid increases in the numbers of visitors from these countries.

Recent expansions of the UAE’s visa-on-arrival programme follow on similar changes to the country’s visa policy over the past few years. EU citizens, for example, have been able to purchase a visa on arrival in the UAE since March 2014.

The change resulted in considerably increased arrivals from several EU countries over the course of the following year, including Bulgaria, Romania and Hungary. In May 2015 the UAE signed a short-stay visa-waiver agreement with the EU, wherein nationals of the UAE are allowed a visa-free stay in any Schengen-area country for 90 days within a 180-day period and vice versa.

According to DTCM data, despite the UK’s decision in 2016 to leave the EU, which resulted in the devaluation of the British pound and increasing the costs of going abroad for British citizens, in late 2016 and the first quarter of 2017 the number of tourists from this country visiting Dubai rose, which was widely interpreted as an indication of the strength of economic ties between the UK and the emirate.

In April 2017 the DTCM began efforts to further diversify the mix of tourists in Dubai by promoting the emirate to new markets. “We have done some work in South Korea, and we have seen some great potential for growth from there,” Issam Kazim, CEO of the DTCM, told local media in March 2017. “We are testing out new markets like Indonesia and Malaysia where we know there might be some cultural relevance of our proposition that might appeal to them, so we need to [evaluate] these markets [to] see what potential we can actually gauge and maybe create a lot more footfall out of those markets.”

Like many other regions around the world, Dubai has also issued regulations related to short-term apartment rentals in recent years. Under a new policy launched in mid-2016, homeowners may apply for a holiday home rental licence from the DTCM. The licence, which requires the homeowner to meet certain requirements in terms of amenities, is valid only for entire-home rentals. The new policy also allows renters to lease their accommodation for short time periods, so long as they secure permission from their landlord and meet the DTCM’s requirements. The move had the intended effect of shifting hundreds of individually listed apartments on websites like Airbnb onto the formal market in the emirate, whereas previously they were not allowed.

Development Framework

These and other changes recently enacted by the DTCM fall under the aegis of Tourism Vision 2020, the regulator’s medium-term development plan for the industry. Launched in May 2013 by Sheikh Mohammed bin Rashid Al Maktoum – prime minister and vice-president of the UAE, and the ruler of Dubai – the primary objective of the plan is to attract 20m annual tourists to the emirate by 2020. This would double the number of visitors recorded in 2012. The DTCM’s strategy has three key objectives: “maintaining market share in existing source markets; increasing market share in markets with high growth potential; and increasing the number of repeat visits.”

The DTCM’s efforts to expand the tourism sector have taken various forms since the initiative was launched nearly half a decade ago. One key component of the strategy has been to attract a range of new kinds of tourists to the emirate, including families on holiday, sporting fans for major international events, medical tourists and business travellers, among others. Tourist offerings aimed at children and families have expanded considerably since the plan was launched. For example, in August 2016 IMG Worlds of Adventure opened for business. It is an indoor theme park linked to the Marvel comic-book universe and other Marvel-linked properties, aimed squarely at attracting tourists to the emirate. In late October 2016 LEGOLAND Dubai opened its doors for the first time. Other family-related attractions include a safari drive experience, the aquarium at Dubai Mall, penguin encounters at the Mall of the Emirates’ indoor ski slope, and a range of additional theme parks linked to Hollywood and Bollywood movies, among other things. Many families from Saudi Arabia travel to Dubai multiple times a year, with the new attractions being a major draw.

Perhaps the biggest event currently on the docket in Dubai is Expo 2020. Scheduled to run from autumn 2020 until spring 2021, the world exposition is expected to generate an enormous amount of press for the emirate, and to attract millions of visitors during its six-month run. Dubai is working hard to ensure that the many events, exhibitions, performances, meetings and other Expo-related activities reflect the culture of the UAE and the broader region. Many cities that have hosted world expos in the past have gone on to become hugely successful tourist destinations in their own right.

Cultural Tourism

In addition to Expo 2020, in recent years the DTCM has worked to attract major sporting and cultural events. In August 2016 the emirate opened the Dh1.1bn ($299m) Dubai Opera, a new performance venue in Downtown Dubai. In addition to an annual season of classical opera – in autumn 2017, for instance, Dubai Opera will host performances of a trio of Mozart operas by a company from Italy – the venue will also cater to diverse audiences with popular music and theatrical performances. Other recently opened or soon to be completed major cultural venues in Dubai include Etihad Museum, which showcases the history of the UAE; the Museum of the Future, which opened in February 2017 and is focused on technology; and the Mohammed bin Rashid Library, among others.

Experiential cultural tourist activities have also become increasingly popular in the city in the past few years, with a large number of operators reporting that there has been strong demand for culinary, art and walking tours of the city. “People have grown tired of the typical cookie-cutter travel experiences,” Nada Badran, the founder of the walking tour company Wander with Nada, told local media in May 2017. “These limit interactions with local people to over-the-counter ticket moments. With the advent of globalisation, travellers have become more culturally curious. They are looking for more meaningful relationships and greater engagement.”

A key corollary and contributor to the development of cultural tourism in Dubai has been the rise of the emirate’s art scene in recent years. Artists from around the world now regularly exhibit and sell their work at the annual Art Dubai fair, which has been taking place since 2006. The development of Dubai’s art community and infrastructure is in line with rising investment and interest in art across the region. The oldest art gathering in the region is the Sharjah Biennial, which takes place in the emirate just to the north of Dubai and has been operating since 1993. Similarly, Dubai’s neighbour to the south, Abu Dhabi, hosts regional branches of the Louvre, which opened in November 2017, and the Guggenheim, which is expected to open in 2018.

Sporting Fans

Boosting Dubai’s reputation as a regional centre for international sporting events has also been a focus of the DTCM. This effort can be traced back to the establishment of the Dubai Sports Council (DSC) in November 2005, and has continued apace since the launch of Tourism Vision 2020. DSC has a broad mandate to develop and improve sports in the emirate, ensure that the sports environment is on par with international standards, and assist Dubai’s youth in achieving national, regional and international results in sport.

The emirate’s sporting activities are centred largely on Dubai Sports City. Launched in 2004, the sports city is a mixed-use suburb that is home to 15,000 residents in addition to a wide range of retail, leisure and sporting facilities, with the largest being the 25,000-seat Dubai International Stadium.

A cornerstone of sports in the emirate is Golf in Dubai, which was launched in 2005 and hosts two major local tournaments each year on one of Dubai’s 11 golf courses. Additionally, the firm hosts tournaments outside the UAE on a regular basis. Other existing facilities at the city include a handful of golf courses, a dedicated cricket stadium, various sports academies for youth and adults alike, and a wide range of associated food and beverage, retail and residential developments.

Medical Tourism

Medical tourism is another key growth area in the DTCM’s effort to attract 20m visitors to the emirate by 2020. In early 2016 the Dubai Health Authority (DHA), the government entity in charge of regulating and developing the emirate’s health sector, announced a new target of attracting at least 500,000 international medical tourists by 2020 (see Health chapter).

By most accounts this seems to be a fairly conservative target, given the positive growth of the segment in recent years. “In [the] 26 hospitals of Dubai we witnessed traffic of 638,000 medical tourists [in 2015], of whom nearly 47,000 were international tourists,” Dr Layla Al Marzouqi, the head of the DHA’s medical tourism initiative, told local media in April 2016. “This high traffic was recorded at just the 26 private and public hospitals, and we are not even talking about the medical tourism procedures conducted in over 1000 clinics and ambulatory care centres in Dubai. [Furthermore], every year the number goes up by another 12-15%.”

In an effort to ensure the segment hits its target, the DHA launched a new online portal aimed at attracting international medical tourists called the Dubai Health Experience in April 2016. The website serves as a comprehensive, one-stop shop for all health, travel, hospitality and visa services for interested visitors. Patients will have the option to book a wide range of medical procedures at any one of the emirate’s 26 hospitals, as well as access discounted air fares on Emirates, purchase medical malpractice insurance, book airport-to-hospital transfers, and buy add-on leisure activities if desired.

Central components of the online portal are the detailed Patient Bill of Rights and the Patient Protection Plan, both of which are aimed at ensuring the safety of medical tourists and covering any complication or medical liability.

In early 2017 the DHA reported that the website had attracted a considerable amount of attention and real business to Dubai, particularly for bariatric (weight loss) surgery. “Bariatric surgeries currently account for approximately one-third of all medical tourist procedures in Dubai,” Pawel Cebula, the COO and co-founder of Germany-based medical tourism facilitator Medigo, which has had an office in Dubai since 2014, told local media in February 2017.

“In the short-term, weight loss procedures will continue to be the most popular. However, as word of mouth about Dubai as a great medical tourism destination travels to other potential patients, there will be a trickle-down effect that will see a more even spread of procedures.”


Long a cornerstone of Dubai’s tourism market, the retail sector remains central to the emirate’s growth strategy. Annual retail-focused events like the Dubai Shopping Festival and properties like Dubai Mall – which bills itself as the most-visited lifestyle destination in the world – are among the most reliable tourist draws in the emirate. In 2016 the retail sector accounted for an estimated 30% of Dubai’s GDP, according to the DTCM.

On December 26, 2016 – the first day of the Dubai Shopping Festival – the DTCM launched an annual retail calendar, aimed at showcasing the emirate’s many shopping-related events over the course of the year. The new calendar is meant to ensure that Dubai maintains its status as “the world’s leading destination for retail tourism, attracting more traffic and fuelling consumption across the shopping precincts, and ultimately accelerating domestic retail industry growth,” the DTCM’s Almarri told local media in November 2016.

It is hard to overestimate the impact of the retail sector on tourism in Dubai. Many of the emirate’s most successful hotels are within walking distance or a short drive of a major mall. For example, since the Mall of the Emirates opened in the Al Barsha neighbourhood in 2006, the area has seen the total number of hotels and serviced apartments rise from four to 58 as of early 2017. According to data from Colliers, meanwhile, hotels that are located near a shopping mall in the emirate pull in an average daily rate that is 25% higher than properties that are not.

With this in mind, the development of a raft of new large shopping destinations bodes well for the hospitality industry in particular and the tourism industry as a whole (see Retail chapter). According to the Dubai Chamber of Commerce and Industry, from mid-2017 up to the end of 2018 the emirate is expected to add an additional 717,000 sq metres of new retail space, as compared to 260,000 new sq metres of gross leasable area added in 2016. A major component of the new upcoming space will be Deira Mall, a Dh6.1bn ($1.7bn) project currently under way by the master developer Nakheel (see Construction & Real Estate chapter).

Business Focus

Another major area of tourism development has been the MICE market, which has expanded rapidly across the GCC region, and particularly in Dubai. In 2015 – the most recent year for which comprehensive data were available at time of publication – the emirate accounted for some 27% of MICE market share in the region, according to the PwC subsidiary and consulting firm Strategy&. Taking into account that the GCC-wide MICE market was valued at $1.3bn that year, this represents $351m worth of business in Dubai.

Key to Dubai’s success as a MICE destination is the Dubai World Trade Centre (DWTC), the emirate’s largest and highest-profile conference centre. In 2015 DWTC reportedly brought in a record high of $3.27bn in retained value to Dubai’s GDP, with international participants at events hosted at the Dubai International Convention and Exhibition Centre (which constitutes the primary meeting facilities at DWTC) contributing upwards of 3% of its economic activity for the year. Major annual shows that have been held at DWTC include Gulfood, Arab Health, GITEX Shopper, GITEX Technology Week, Dubai Sports World, Cityscape Global and The Big 5 Dubai (a construction sector exhibition).

New Market Segments

One of the single largest shifts currently under way in Dubai’s tourism sector involves attracting a greater share of mid-market visitors. This is widely considered to be integral to the emirate’s likelihood of reaching its 2020 target of 20m tourist arrivals. As evidenced by the rapidly rising number of incoming visitors from markets like the Indian subcontinent and China, this transition is already under way. The local hospitality sector is responding in kind, with a significant number of hotels aimed squarely at the three- and four-star market currently under construction. “The government is making an enormous effort to draw in Chinese visitors at the moment,” said Lee of Media One Hotel. “A lot of this activity is playing out online, and particularly on social media, which has become a major marketing tool for the DTCM.”

Many hotels in Dubai and across the region have worked to boost amenities for these visitors, including employing Mandarin-speaking staff. “We run nine hotels in the UAE and we will open another 14 resorts by 2019,” Elie Milky, the vice-president for business development in the Middle East at the US-Belgian hotel brand Carlson Rezidor, told Chinese media in April 2017. “This is mainly because of the fast-growing number of guests from Asia, [and] China in particular. All of our hotels in the Middle East employ Mandarin-speaking staff.” Mid-market retail outlets, too, have benefitted from the influx of middle-class tourists from China, India and elsewhere. Dragon Mart, a shopping mall that bills itself as the largest Chinese trading centre outside of mainland China, reportedly attracts between 65,000 and 80,000 visitors a day. In early 2016 the mall completed a near-Dh1bn ($272.2m) expansion, adding some 185,000 sq metres of new retail space and doubling the size of the original development. Furthermore, Dragon Mart is planning an additional four phases of expansion for the coming years, which will bring the total gross leasable area to around 1m sq metres.


While economic pressures have negatively affected the tourism market across the GCC in recent years, financial services firm Standard Chartered forecast stronger growth numbers for Dubai in the near future, driven by increasingly stable oil prices, belt loosening at the federal level and rising expenditure in the run-up to Expo 2020. The non-oil economy, and particularly tourism, is expected to post relatively strong growth for 2017, indicated by non-oil GDP growth of 3.2% for the year, compared to overall economic growth of 1.5%. Similarly, as of the end of October 2017 Dubai appeared to be on track to see a considerable rise in international visitor numbers.

According to data from the DTCM, in the first six months of 2017 visitor arrivals were up 7.2% over the same period in 2016. “The government does so much to encourage tourism here,” Syed Mohammad Asad Zaidi, general manager of the Ramada Chelsea Hotel in Al Barsha, near the Mall of the Emirates, told OBG. “The past two years have been challenging, but we expect to see a big push for Expo 2020 starting in January 2018, which will likely have a positive impact on the tourism sector.”

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The Report: Dubai 2018

Tourism chapter from The Report: Dubai 2018

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