Abu Dhabi’s tourism industry underwent significant growth in the years preceding the Covid-19 pandemic. The emirate’s economy received a substantial degree of insulation through government policies and relief packages during the pandemic, while measures implemented to contain the spread of the virus were prompt and effective. Abu Dhabi’s tourism operators are now enjoying the return of international visitors, and the sector as a whole has rebounded well. Indeed, tourism and cultural activities are being harnessed to drive economic diversification at both the federal and emirate level, with various investment schemes designed to broaden Abu Dhabi’s range of leisure and cultural attractions while leveraging the sector’s capacity for job creation bringing notable success.
Structure & Oversight
The Department of Culture and Tourism – Abu Dhabi (DCT Abu Dhabi) is responsible for regulating, promoting and developing both culture and tourism activities within the emirate. It does so through a range of policies and programmes designed to develop the various dimensions of the cultural and tourism segments.
In terms of tourism, DCT Abu Dhabi works to enhance both the leisure and meetings, incentives, conferences and exhibitions (MICE) industry. The department oversees the Abu Dhabi Convention and Exhibition Bureau (ADCEB), which launched in 2013. DCT Abu Dhabi also helps to develop and maintain the emirate’s tourism destinations and attractions, while being responsible for cruise tourism development, business licensing and classification regulation, and human capital and Emiratisation schemes. Indeed, raising the participation level of UAE nationals in the workforce is a cornerstone of both federal and emirate-level development agendas.
In January 2022 DCT Abu Dhabi introduced a new fixed-fee structure for business licensing procedures. Now, fees payable to government entities such as, but not limited to, the Abu Dhabi Department of Economic Development and the Department of Municipalities and Transport are incorporated into a single payment, with total fees payable dependent on the size and type of business and capped at Dh1000 ($272) annually.
In relation to culture, DCT Abu Dhabi works to promote both tangible and intangible cultural assets, with the latter referring to raising awareness and appreciation of traditions and customs. Meanwhile, DCT Abu Dhabi is in the process of broadening the emirate’s portfolio of museums and cultural sites, while also promoting the arts, and running various educational and outreach programmes to that end.
In July 2023 Abu Dhabi Global Market (ADGM), which is the emirate’s international financial services centre, located on Al Maryah Island, announced that it had issued the ADGM Hotel and Tourism Regulations 2023 for relevant entities within its jurisdiction. In doing so, ADGM adopted the bulk of the policies and regulations adhered to by onshore tourism operators. DCT Abu Dhabi is now responsible for regulating, supervising, monitoring and enforcing operational procedures for ADGM hotels and tourism companies, while the ADGM Registration Authority remains the chief government body regarding licence and permit issuance.
The move is intended to increase synergy between ADGM and regular government operations. The types of companies that the regulations will apply to include, but are not limited to, hotels and other types of tourist accommodations, resorts, restaurants, cinemas, theatres, museums and tourism transport companies.
Strategy
A core component of strategies relating to the multiple segments of the tourism sector sees relevant authorities working to broaden the emirate’s portfolio of indoor activities. Due to extreme temperatures during the summer months, peak tourism season takes place during the December-March period.
The UAE Tourism Strategy 2031 was launched by the federal government in November 2022. Through the strategy, the country aims to increase the tourism sector’s GDP to Dh450bn ($122.5bn) by 2031 and boost the number of guests staying in the country’s hotels to 40m per year by 2031. In order to achieve those goals within the specified timeframe, the federal government also aims to attract an additional Dh100bn ($27.2bn) of investment in the sector. At the time the strategy was announced, the country had a solid base upon which to build – its airports having processed 22m passengers in the first quarter of 2022, while the first two quarters combined yielded 12m hotel stays.
Another federal strategy was unveiled in 2021 by the Ministry of Culture and Youth. The National Strategy for the Cultural and Creative Industries outlines the government’s aim to boost the GDP of those sectors over a decade and to harness their job creation capacity and suitability for entry for small and medium-sized enterprises, with a focus on raising workforce participation among youth. By 2031, the government plans to establish the cultural and creative sectors among the top-10 contributors towards the national economy.
Given that it accounts for 84% of the UAE’s landmass and around 52% of GDP in 2022, Abu Dhabi will be instrumental to the federal tourism drive. The Abu Dhabi Tourism Strategy actually predates the national strategy, having launched in 2021. By 2030 the emirate aims to increase overnight visits to 23m per year, which would more than double the 2019 total of 11.4m. At the strategy’s launch the emirate government stated that more sophisticated data analytics were being deployed to better assess the tourism sector’s strengths and weaknesses, and since that time the strategy has been further developed with DCT Abu Dhabi announcing in 2023 that it aims to see the sector’s GDP rise from its current level of around 5% to 12% by 2030.
Attractions
Progress towards the strategy’s goals is also being driven by efforts to promote Abu Dhabi as a destination of distinction, highlighting to an international audience the emirate’s diverse portfolio of leisure, cultural and business tourism offerings and capacities. DCT Abu Dhabi has engaged Emirati real estate and destination development firm Miral to expand the Saadiyat Cultural District. Saadiyat Island as a whole has a landmass of 26.9m sq metres and is one of the emirate’s primary tourism destinations, housing high-end beach resorts and renowned art galleries Louvre Abu Dhabi and Manarat Al Saadiyat.
The Cultural District’s expansion will be driven by the launch of the Zayed National Museum, Guggenheim Abu Dhabi, Abrahamic Family House, the National History Museum Abu Dhabi and immersive, sensory art experience teamLab Phenomena. Other renowned leisure attractions include Ferrari World on Yas Island and the National Aquarium in Al Qana. “Abu Dhabi is very focused on future planning and working on key projects under development. It is committed to these projects regardless of fluctuating market conditions,” Paul Hamilton, CEO of National Aquarium, told OBG.
Focus is also being placed on raising awareness of the emirate’s UNESCO World Heritage Sites in Al Ain, which include the Al Ain Oasis and the Bidaa Bint Saud, Jebel Hafit and Hili archaeological sites.
An example of tourism being strategically harnessed to drive multi-sectoral growth is the April 2023 announcement that Abu Dhabi farmers are now permitted to reserve up to 30% of their land for tourism activities, including leasing rooms. This allowance comprises a total of 71 services and activities that can be legally offered by the local agricultural community, and is designed to both bolster the emirate’s portfolio of community, heritage and ecotourism offerings and facilitate revenue diversification for farmers.
Business & MICE
Work towards positioning Abu Dhabi as an international MICE and business tourism destination predates both DCT Abu Dhabi and ADCEB, with the former sector regulator, Abu Dhabi Tourism Authority, launching the Advantage Abu Dhabi programme in 2009 to boost business tourism.
In 2022 ADCEB began implementing its Advantage Abu Dhabi Meetings & Incentives 2.0 programme – an upgraded version of the Advantage Abu Dhabi initiative – in a bid to stimulate higher activity and strengthen international partnerships in the sector. During 2022 Abu Dhabi hosted more than 1200 MICE events attracting 603,000 visitors. The emirate has strong infrastructure to back its MICE tourism drive. Its primary facility, the Abu Dhabi National Exhibition Centre (ADNEC), which opened in 2007, has a footprint of 153,678 sq metres, comprising 1827 hotel rooms, 21 meeting rooms, and 13 conference and exhibition halls. ADNEC Group, the owner of ADNEC, and ADCEB work together towards developing the emirate’s business tourism and MICE industry offerings. In April 2023 the two entities announced that they would jointly launch a fund designed to boost the emirate’s MICE and business tourism industry by offering financial support and other incentives to companies interested in holding events in Abu Dhabi. One such incentive is that event organisers no longer have to pay the 10% tourism tax on ticket sales previously required. Organisers do, however, still have to obtain licences through the appropriate channels and also declare financial statements displaying revenue generated by events held. Currently, in order to qualify for the aforementioned funding and incentives, organisers can submit applications to either ADCEB or ADNEC Group for events they wish to hold at ADNEC and whose proposed dates fall prior to December 2024.
In 2022 the Abu Dhabi International Petroleum Exhibition and Conference, which is held annually by ADNOC, brought together 15,000 energy sector executives and 2200 companies, making it the largest event of its type globally and generating $8.2bn in business deals. Furthermore, the 2023 iteration of the International Defence Exhibition and Conference, which runs alongside the Naval Defence and Maritime Security Exhibition and Conference, saw the UAE military sign Dh23.3bn ($6.3bn) in contracts, up from $5.7bn in 2021. Such figures demonstrate MICE’s capacity for promoting broader economic expansion. Building on that, the emirate hosted the Annual Investment Meeting (AIM) Congress, which is organised by the AIM Global Foundation and widely considered the world’s leading foreign direct investment platform, in May 2023. In October 2023 the UN Conference on Trade and Development held its annual World Investment Forum in Abu Dhabi.
Furthermore, 2022 saw DCT Abu Dhabi establish and strengthen MICE-related ties with entities and authorities from Israel, China, South Korea, the UK, Belgium, the Netherlands and Spain.
Size & Performance
The Statistics Centre – Abu Dhabi (SCAD) does not issue data specifically for tourism sector GDP, but figures for the accommodation and food services industries display robust expansion over the past several years. Indeed, average year-on-year (y-o-y) growth per quarter was 7.5% and 12.2% in 2021 and 2022, respectively, while further growth of 14.5% occurred in the first quarter of 2023. Meanwhile, the arts, recreation and other services sector registered average y-o-y quarterly growth of 9% and 5.7% during 2021 and 2022, respectively, but showed a y-o-y contraction of 2.5% in the first quarter of 2023.
The multi-sector nature of tourism means that it contributes significantly to GDP in other areas of the economy, perhaps most notably in the real estate and transport sectors. While it should be noted that GDP from transport is recorded in the transport and storage services category, that sector has undergone robust expansion since the post-pandemic reactivation of economic activity. In 2021 the y-o-y quarterly growth for transport and storage activities averaged 30.6%, and followed up with an average of 11% in 2022 and y-o-y growth of 13.6% in the first quarter of 2023. The real estate sector, meanwhile, took longer to rebound from the pandemic, registering an average quarterly contraction of 0.3% y-o-y in 2021 before recording an average of 17.2% expansion across 2022 and 4.2% growth in the first three months of 2023.
In terms of receipts, DCT Abu Dhabi reported that tourism revenue saw a 19% expansion from 2021 to 2022. Meanwhile, the World Travel & Tourism Council (WTTC) estimates that the Abu Dhabi tourism industry expanded to a value of around Dh11bn ($3bn) in 2022, 12% below its value in 2019.
Hotels
At the national level, the UAE is in the process of investing around $32bn in the construction of an additional 48,000 hotel rooms to cater to rising demand. Once complete, those new rooms will bring the national total to approximately 200,000. According to the DCT Abu Dhabi’s “Annual Report 2022”, Abu Dhabi had 170 hotels and hotel apartments, comprising 34,000 keys that year. The emirate’s hotel construction pipeline includes large-scale, luxury offerings from major players such as Monaco-based Nammos and US firms Mondrian, LXR Hotels and Resorts and Marriott.
Abu Dhabi’s hotel revenue saw significant growth in 2022, rising by 23% to reach Dh5.4bn ($1.5bn) compared to the previous year. The average guest stay was three nights, and the average revenue per available room reached Dh263 ($71.59), marking a 19% increase from 2021. Abu Dhabi recorded a total of 4.1m overnight stays in 2022. Of these, 1.2m guests were UAE nationals, constituting 29% of the total, the highest share among all countries. India was the largest nonUAE market, with 480,000 visitors, equivalent to 12% of the total, with growth of 31% from 2021. Meanwhile, the Philippines, the UK, Egypt and Saudi Arabia each represented 4% of the total guests in 2022.
Moving into 2023, occupancy rates in the emirate remained steady at 72.4%, with an average daily rate of Dh508 ($138) and average revenue per available room of slightly over Dh368 ($100). The latter two metrics were higher than pre-pandemic levels by 14.6% and 6.6%, respectively, while total occupancy was still lower than the 77.6% witnessed in January 2020.
Employment
The tourism sector’s post-pandemic recovery is further reflected in a significant increase in related employment and job creation. According to the WTTC, Abu Dhabi sustained around 43,000 tourism-related jobs in 2022, representing an increase of 0.4% over pre-pandemic levels.
In order to meet anticipated increased demand for tourism in Abu Dhabi in the coming years, DCT Abu Dhabi is targeting the creation of up to 25,000 jobs in the sector by 2026. In June 2022 the department announced a series of initiatives designed to boost both the capacities and depth of the tourism human capital pool. Emiratisation is a key feature of those initiatives, yet attracting top international talent into local tourism businesses is also a focus. The Tourism Summer Youth Camp and the Khebarty programmes are designed to cater to Emiratis 17-21 years old and university students, respectively, while the Training Needs Analysis and Labour Market Assessment project is open to all nationalities and will be leveraged to upskill and provide employment opportunities for hospitality and tourism professionals in line with international best practices.
Arrivals & Source Markets
According to DCT Abu Dhabi, total visitors to the emirate – a metric that includes day visits and overnight stays – in 2022 reached 18m, up 13% from 2021. Around 4.1m of those visits were overnight stays, a figure that illustrates that the emirate still has some way to go before it reaches pre-pandemic levels. Yet, that number is 24% higher than 2021 figures, while hotel occupancy reached 70% in 2022, exceeding the 67% Middle East average.
India stands as the top contributor to overnight stays in Abu Dhabi, followed by significant arrival numbers from China, the GCC, Egypt, Italy, France, Germany, the US and the UK. While the emirate is running multiple new marketing campaigns in order to appeal to a broader range of international markets, Abu Dhabi is particularly focused on establishing stronger ties with India and China. Their combined population of over 2.8bn and the rapid expansion of each country’s middle class provide excellent growth opportunities for Abu Dhabi tourism operators.
Indeed, the number of Indian tourists visiting Abu Dhabi underwent 96% growth in 2022 across both the leisure and MICE tourism verticals. Such expansion owes to aggressive marketing campaigns and an increased focus on improving connectivity between Abu Dhabi and India, particularly with the latter’s second-tier locations. Abu Dhabi’s flag carrier Etihad Airways now operates a daily service between Abu Dhabi and Kolkata, while Air Arabia, Indigo and Vistara have established daily services connecting Abu Dhabi with Ahmedabad, Chennai, Cochin, Mumbai and Hyderabad.
Furthermore, DCT Abu Dhabi is collaborating with Chinese carriers and aviation stakeholders to synchronise expansion strategies as Chinese borders gradually reopen post-pandemic. This alignment aims to benefit both markets through enhanced routes and increased traffic between the two regions. In 2022, Etihad Airways established a codeshare agreement with China’s largest carrier, China Southern Airlines, enabling them to boost passenger traffic and expand route offerings.
Recent robust growth in arrival numbers is expected to receive a further boost when the $3bn, 742,000-sq-metre Midfield Terminal at Abu Dhabi International Airport opens in November 2023. The new facility will be able to process 11,000 passengers per hour and 45m passengers per year, enabling the airport to accommodate a broader range of airlines and cater for significantly more routes and destinations. The current terminals one and two are scheduled for closure, with the Midfield Terminal handling all passenger activity. The possibilities of repurposing Terminal 3, the newest of the existing terminals, as either a remote lounge or as a standalone budget carrier terminal have been raised. According to reports, 17,000 staff have been trained to operate the new Midfield Terminal.
Marketing
The November 2022 launch of the Experience Abu Dhabi: Find Your Pace marketing campaign and accompanying website are central to the emirate’s aforementioned drive to establish a distinct destination identity. The DCT Abu Dhabi’s “Annual Report 2022” stated that since the site’s launch, it had received over 85m visits. The site details a host of locations, such as Abu Dhabi City, Al Reem Island, Al Maryah Island and Dalma Island, and a broad array of experiences encompassing cultural, leisure, amusement, sporting and wildlife activities, among others available to visitors.
Stakeholders are adopting a range of methods through which to reach an expanding number of tourism markets. Notable exposure has been achieved by the emirate establishing a stronger presence at a higher number of travel and tourism trade shows. Meanwhile, success has been achieved by forging partnerships with internationally renowned entities such as Abu Dhabi-owned Manchester City Football Club, as well as high-profile personalities, such as former US basketball star Shaquille O’Neal and Hollywood film star Kevin Hart. Seasonality has also been identified as offering growth potential, with the emirate running its Getaway Abu Dhabi campaign during the Northern Hemisphere’s winter months, which coincides with Abu Dhabi’s peak tourism period. In addition, Abu Dhabi tourism marketing campaigns are receiving coverage on major platforms from across popular media, such as the BBC, Tripadvisor, Condé Nast Traveller, National Geographic, Lonely Planet and Spotify.
Niche Markets
Abu Dhabi’s extensive and advanced health care infrastructure is being utilised to drive medical tourism activity. In 2018 the Department of Health – Abu Dhabi partnered with DCT Abu Dhabi to promote medical and health tourism, launching a new digital platform through which tourists can obtain information regarding the 287 medical treatment packages offered across 40 health care facilities by 173 doctors. Visa issuance is catered for on the site, as are medical appointments and hotel and leisure activity bookings. Top international brands, such as King’s College London and US-based Mayo Clinic and Cleveland Clinic, have established a presence in Abu Dhabi, and the Abu Dhabi Investment Office offers financial and non-financial incentives and support to international health care specialists looking to begin operations. Currently, Abu Dhabi welcomes around 15,000 medical tourists annually, but stakeholders believe that the figure is set to increase significantly in the coming years. The international Medical Tourism Association placed Abu Dhabi eighth overall in its Medical Tourism Index 2020-21, which ranks 46 international health care destinations.
Meanwhile, culinary tourism is being pushed through a range of initiatives and events, with DCT Abu Dhabi offering financial support packages to entice restaurant brands to the emirate. The Abu Dhabi Culinary Season, which ran its fifth edition in 2022, encompassing 1000 Abu Dhabi restaurants and a host of top international and local chefs, attracted 150,000 attendees over its November-December, eight-week timeframe.
Outlook
Growth in tourist arrivals witnessed across the GCC in recent years appears set to continue, and Abu Dhabi’s cosmopolitan reputation and the public and private investment placed into driving sector expansion positions the emirate to capitalise on increased international awareness of the region’s cultural and leisure offerings. Abu Dhabi is working hard to carve a niche for itself in a highly competitive region, and its status as a welcoming, safe and varied destination with extensive international connectivity bodes well for further expansion in the coming years.
Read More from OBG
