By some measures the tourism and hospitality sector in Dubai is already in a league of its own internationally. In terms of overnight visitor arrivals’ spend per resident, for example, Dubai stands head and shoulders above every other major destination city in the world. In its relatively short history, Dubai’s hospitality sector has learned how to constantly reinvent itself and rise to meet new challenges and break new records. With World Expo 2020: Dubai a focus for the development of the sector, the authorities are keen to point out that the vision encompasses more than that event alone.

Tourism & GDP

The UAE economy is dominated by hydrocarbons wealth, but Dubai, with its relatively modest endowment of both oil and gas, has consistently led in the sectors that have enabled the country to diversify its income streams. Federal statistics show tourism’s direct contribution to the UAE economy reached Dh56.6bn ($15.4bn), or 4% of total GDP, in 2013, with a forecast rise of 4.7% in 2014 (see Economy chapter). The total contribution to GDP – through the ways in which visitors spend their money in the country – was Dh117.4bn ($32bn), or 8.4% of GDP in 2013, with an uptick of 4.5% anticipated in 2014.

Figures released by the Dubai Statistics Centre (DSC) show just how important the sector is within the emirate itself. Restaurants and hotels contributed Dh16.3bn ($4.4bn) in 2013, or 5% of GDP, up from Dh14.4bn ($3.9bn) in 2012, when it represented 4.6% of GDP. From 2012 to 2013, the hotel and restaurant sector recorded growth of 13% in terms of contribution to GDP, a significantly higher leap than any other sector, with manufacturing growing by 8.1% year-on-year (y-o-y) and social and personal services growing by 6.8% over the same period. For the first half of 2014, hotels and restaurants contributed Dh9.3bn ($2.53bn), or 5.5% of total GDP in that period, up from Dh8.9bn ($2.42bn) in the first half of 2013, when it was 5.4% of the total.

Economic Impact

According to the World Travel & Tourism Council (WTTC), the industry supported 291,500 jobs across the UAE, or 5.3% of total employment in 2013, and it forecasts this will rise by 5.7% in 2014. WTTC’s 2014 “Economic Impact Report” for the UAE also noted that visitor exports generated Dh80.9bn ($22bn), or 5.8% of total exports, in 2013 and it forecast growth of 2.9% in visitor exports in 2014. According to the report, Dh21bn ($5.7bn), or 6.2% of total investment in UAE in 2013, was in the travel and tourism sector. The WTTC expected to see 9.7% growth in travel and tourism investment for the country for 2014.


The hospitality industry in Dubai is regulated by the Dubai Department of Tourism and Commerce Marketing (DTCM), which as its name suggests also promotes Dubai as a destination. DTCM issues licences to hoteliers and its jurisdiction covers resorts, hotels, hotel apartments, youth hostels and guest houses. From June 2014 its remit was extended to cover holiday homes, which will be rated as either standard or deluxe. In September 2014 the DTCM introduced new criteria for its hotel star classification system, including rules stipulating minimum sizes for rooms in each category. The new framework also demanded Wi-Fi access in all public areas of hotels.

Visitor Numbers

When the decision on Expo 2020 was first announced in 2013, the target was to attract 20m tourists to Dubai. That would mean doubling visitor numbers based on DSC’s figures of 9.9m for 2012. At first glance, that might appear to be a tall order, yet, on closer inspection of the relatively short history of growth in Dubai’s tourism industry, the target may well be met, barring any unforeseen problems, and quite possibly surpassed. There has been an increase in visitor numbers every year since 2003. In percentage terms, the apex of y-o-y growth was the 13.6% achieved between 2004 and 2005, and the nadir was from 2008 to 2009, when it was just 0.7%. But even taking that temporary dip into account, the compound annual growth rate from 2003 to 2013 was 8.3%. The second-highest annual increase was recorded in 2013, when DSC visitor numbers showed 11m people stayed overnight in hotels or apartments in Dubai, an increase of 10.6% on the previous year. Looking ahead, if visitor numbers grow 8% a year from now on, 18.9m people will be coming to Dubai in 2020 and 20.4m by 2021. If visitor numbers keep increasing by 10.6% per annum, the 20m target would be achieved by 2019.

Top Cities

A good illustration of Dubai’s success on a global level is the MasterCard Global Destinations Cities Index, which published its fourth edition in 2014. It pulls together comparisons of travellers arriving by air and staying overnight in 132 cities around the world. The report includes details of visitors who stayed with friends and relatives as well as those staying in hotels and apartments, which explains why the figures for Dubai are slightly higher than DSC estimates. On that basis, London is ranked first in the index with 18.69m visitors, Bangkok is second with 16.42m, Paris is third with 15.57m, Singapore is fourth with 12.47m, and Dubai is fifth with 11.95m visitors.

London maintained the top spot with 8% annual growth in visitors, while political unrest in Thailand resulted in an 11% fall in numbers for Bangkok. According to the report, an easing off in Paris and Singapore’s growth rate, could see Dubai’s ranking improve. “If their current growth rates are to continue, then Dubai would overtake both Paris and Singapore within five years,” said the report. The report found that Dubai has by far the highest number of visitors per resident of any of the countries surveyed, at 4.8, up from 4.2 in 2009, compared to Amsterdam’s score of 2.6, up from 1.9 in 2009, and London’s figure of 2.4, up from 1.8 in 2009. In terms of visitor spending, Dubai was eighth in the world in the 2014 index. London was the top, with visitors spending $19.27bn, while visitors to Dubai spent 56% $10.9bn. However, that compares to the total of $1.9bn spent by tourists in neighbouring Abu Dhabi.

Visitors flying into Dubai from London make the UK capital Dubai’s biggest feeder city, according to the report. The figures for the 2014 report suggest 1.01m visitors from London spent $1.28bn and their numbers increased by 15.1% compared to 2013. There were 456,000 visitors from Riyadh and 423,000 from Jeddah, down 8.5% and 8.6%, respectively, on the year before. Travellers from Riyadh spent $359m, while those from Jeddah had outlays of $333m during their visits. “This is consistent with the trend showing that international visitors from outside of the region are becoming more important for Dubai, currently accounting for 66% of the total,” stated the report, which classifies the region as the Middle East and Africa.

Expansion Plans

To meet the overall growth in demand, the hospitality sector is building new hotels, resorts and tourist apartments. According to Christopher Hewett, senior consultant for TRI Consulting, there are already 70,000 new hotel rooms in the pipeline before 2017. More than 50 individual developments have already been announced, or are under construction, with investors looking for long-term returns well beyond Expo 2020. “The payback time for investment in hotels varies between luxury hotels and lower budget hotels,” Hewett told OBG. “With a development the land cost is typically 20-25% of the total development. 12 to 14 years would be an average payback period. In budget hotels this could come down to seven or eight years.”

Hotel Investments

In Dubai investment by international firms is confined to the free zone areas, but GCC developers can build anywhere and joint ventures with local partners can be pursued. One Dubai business with a long track record of working with international hotel chains is Al Habtoor Group, the portfolio of which includes firms in hospitality, construction, and sales and distribution of luxury vehicles. The company builds and operates hotels under its own brand, but also has partnerships with Starwood and Hilton. Starwood, whose brands include Sheraton, St Regis, W and Westin, has announced five projects with a total of 1915 rooms for the next few years. Hilton is building six hotels in Dubai, three under the Hilton or Doubletree by Hilton brands, with 969 rooms, as well as three Hilton Garden Inns, with room numbers not yet announced.

Henning Fries, managing director of the hospitality division of Al Habtoor Group, told OBG, “When you look at the past track record of arrivals into the destination, even without Expo 2020, and look at the increase year on year of new arrivals, it represents a staggering growth rate. If you take a conservative view and say this will grow at the same rate going forward, plus you add a major event like the Expo 2020 in six years, and simple arithmetic says there needs to be a healthy supply of hotels coming into the market to satisfy demand.”

Project Pipeline

This ongoing race to meet demand can be seen with plans already announced for Dubai, according to details of developments released by Hotelier Middle East magazine in August 2014. In 2015, 14 new properties including 4957 rooms and 556 apartments are due to be completed; in 2016, 14 new projects including 4477 rooms and 163 apartments should be ready; and in 2017, plans are in place for a TRYP by the Wyndham hotel group, with 672 rooms.

Meanwhile, the Jones Lang LaSalle (JLL) Retail Market Review for the fourth quarter of 2014, showed that, at that time, there were 64,200 hotel room keys and it expected a further 4700 to be added in 2015. It predicts 8400 new keys in 2016 and 8000 new rooms in 2017. By JLL’s calculations, an additional 22,300 new keys will be added through 2018, giving a total of 86,500 rooms, a boost of 62% from the total of 53,400 keys available in 2011. DTCM figures, which also take into account rooms in tourist apartments, show that as of June 2014 there were 634 establishments with 88,680 keys. In all 31 new hotels entered the market from 2013 to 2014, representing a 5.1% increase in supply.

Road To 2020

The Expo site itself is half-way between the centres of Dubai and Abu Dhabi and occupies a 438-ha area. It will have a capacity of 300,000 people, with an average weekly attendance of 153,000, as well as feature a 150-ha gated exhibition zone. The event itself is expected to attract 25m visitors over six months, 70% of this number coming from overseas into one of three international airports: Dubai International, Dubai Al Maktoum International (which is closest to the site), and Abu Dhabi International Airport. The Expo will run from October 10, 2020 to April 10, 2021, when a closing ceremony will serve as a springboard for UAE’s golden jubilee celebrations. A legacy plan has been developed to turn the site into a major international global conference and exhibition centre after the Expo.

The emirate estimates it will take $8.8bn of investment to deliver the site and make the city ready for the event, and this should generate significant opportunities for the hospitality sector. The Expo is expected to invite 250 participants representing national governments, international and non-governmental organisations, educational institutions, as well as commercial entities. The slogan will be “Connecting Minds, Creating the Future”, and its three themes will be sustainability, mobility and opportunity. The lead architects for the site, HOK of the US and design engineers Arup, are part of a team working on the final detailed design proposal, which is being submitted to the Bureau of International Expositions, the governing body of the World Expo. According to the Expo 2020 Higher Preparatory Committee, the first construction work on the site itself should begin after November 2015.

New Transport Links

Hotel guests will be able to travel to the site by low-emission ExpoRider buses. About 75,000 visitors are also expected to arrive by Dubai Metro. The Red Line will have a 10- to 15-km extension built from Jebel Ali with an extra two to four stops, including a station serving the site itself.

The line will also serve Al Maktoum International, effectively creating a metro link between Dubai’s two international airports. At the other end of the Red Line, a 3.5-km extension is planned from Rashadiya to Mirdif City Centre Mall. A 20.6-km extension to the Green Line should also be completed before the Expo, with 11 stops and serving International City, Academic City and Silicon Oasis. Meanwhile, closer to the city centre, the 10.4-km Al Sufouh Tramway, will include 11 stops and a connection from Dubai Marina to the metro and was due to be operational in late 2014. A second phase of the tramway should be complete by 2020, adding a 5-km link from Burj Al Arab to Mall of the Emirates (see Transport chapter). These transport improvements should ease tourists’ travel in the emirate, improving connectivity between attractions. Dubai’s Road and Transport Authority is hopeful that 20% of travel in the emirate by 2020 will be via rail, tying in with the expo’s sustainability agenda and reducing traffic.

Airport Expansions

One of the most powerful drivers of Dubai tourism has been its development as a centre for air traffic. The emirate has two international airports – Dubai International and Al Maktoum International – catering to both passengers and freight, with plans to spend $40bn enhancing facilities at both.

Official figures from Dubai International show that annual passenger traffic reached 70.47m in 2014, helped by a strong performance in December, when monthly passenger numbers reached nearly 6.5m. The annual figure was up 6.1% on 2013, when 66,431,533 passengers passed through the airport. In the first half of 2014, the airport’s passenger numbers reached 34,676,090, up 6.2% on the same period in 2013, even though one of the two runways was closed in May and June for maintenance and improvement.

Runway refurbishment, part of Dubai International’s $7.8bn Strategic Plan 2020 master plan, was completed on July 21, 2014. The airport then achieved passenger numbers of 5,155,771 for that month, but August 2014 was a record for the airport, with 6,648,058 passengers, up 10.8% on August 2013. Construction of Concourse D at the airport is set to be completed later in 2015 and is expected to service passengers from more than 100 airlines. Concourse D will be connected to a refurbished Terminal One by an elevated rail line and will increase the airport’s capacity to 90m passengers a year. Dubai’s airports combined are expected to see as many as 79m passengers in 2015.

By 2020 the airport will have expanded its capacity again to cater to 103m passengers a year. That will make it Dubai’s biggest airport by passenger capacity in 2020, but only just, because in September 2014, the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, announced plans to spend Dh120bn ($32.7bn) on expanding Al Maktoum International, which currently has a capacity of 7m passengers, enabling it to take 160m passengers a year. That milestone will not be reached by 2020, but by then it is anticipated that the airport, which is at Dubai World Central near the Expo 2020 site, will be capable of handling 100m.

The development of the airport will be in two phases, with the first including the construction of two satellite buildings with a collective capacity of 120m passengers and able to accommodate 100 A380 aircraft at any time. It will eventually have five parallel 4-km runways. The world’s busiest airport in 2013, according to Airports Council International, was Atlanta with 94.4m passengers a year. Based on planned airport expansion projects and industry growth forecasts, the economic impact of aviation and tourism activities is expected to reach $53.1bn by 2020, equal to 37.5% of Dubai’s GDP and supporting more than 754,500 jobs, according to Oxford Economics.


The expanding capacity at both international airports is keeping pace with the growth of Dubai’s long-haul carrier, Emirates. In October 2015, it will have been 30 years since the airline started operations with two leased aircraft. By 2014 it was operating 220 aircraft, including the world’s largest fleets of A380s and Boeing 777s, and flying to 140 destinations in 80 countries. More than 1500 Emirates flights were taking off from Dubai every week. The airline’s appetite for expansion is underlined by its order book, which in June 2014 stood at $138bn for 200 new aircraft.

In fiscal year 2013/14 Emirates carried 44.5m passengers. In October 2014 the airline announced it expected to carry 70m passengers by 2020. It also credited its strategic alliance with Qantas with helping to boost tourism to Dubai from Australasia. The airline noted that some 250,000 Australians visited Dubai in 2013, largely as a result of this service. DSC figures show that a decade prior to this, in 2003, fewer than 68,000 Australians visited Dubai.

On December 1, 2014, Emirates assigned one of its 53 A380 double-decker airliners to its Milan-Dubai route, the first scheduled A380 flight to serve Milan Malpensa, and one of Emirate’s three scheduled daily flights to the Italian city. The airline says that introducing the A380 will increase daily capacity on the route by 38%. Milan will be the host of Expo 2015, from May to October, before handing the torch to Dubai for Expo 2020. Emirates’ growth and its ability to bring in more passengers on larger jets from a greater portion of the world is well appreciated throughout the hospitality sector. “Every year Emirates is growing so fast and putting in new destinations and they themselves create unique opportunities,” Fries told OBG.

Dubai World Central

Al Maktoum International is at the centre of Dubai World Central, a 140-sq-km site, dubbed an “aerotropolis”, that has been created to enable freight to move seamlessly from the container port to the airport, which has been handling cargo flights since 2010. DWC has themed zones dedicated to logistics, commerce and aviation, but also has a residential area and an area dedicated to golf.

According to the plans, Golf City will be a 146m-sq-foot area with golf course, shopping malls, leisure facilities and hotels. In October 2014, InterContinental Hotels Group (IHG) announced plans to open two hotels at the site, a 450-room Holiday Inn and a 250-room Stay-bridge Suites. IHG is partnering with Abjar Hotels International, part of the Almulla Group, on the venture.

Sports Events

Golf also plays its part in Dubai’s tourism industry. The European Tour’s Omega Dubai Desert Classic allows visitors to see some of the world’s top players in action and the emirate has courses such as the Address Montgomerie Dubai designed by Colin Montgomerie and Desmond Muirhead, which opened in 2002. Other major sporting events also attract tourists to the emirate. More than 100,000 people attended the last Dubai Duty Free Tennis Championships to see leading players from the male and female tennis circuit compete in this ATP and WTA event.

International rugby has been a December fixture for 44 years with 16 men’s teams and 12 women’s teams competing in the Emirates Airline Rugby Sevens. Dubai World Cup horse race, an annual event each March, also attracts a high number of domestic and international visitors. The completion of the Meydan Grandstand in 2010 and the upgrade of other facilities has elevated the event on the international horse racing calendar.

Mall Of All The World

Health, rather than fitness, is one of the key features of the hugely ambitious Mall of the World announced in the summer of 2014. A 279,000-sq-metre medical tourism zone will allow visitors to attend health centres, cosmetic surgery clinics or spas, a short walk from temperature-controlled streets, entertainment and shopping districts.

The world’s largest mall, which is being built by Dubai Holding, will cover a total area of 4.5m sq metres and looks set to make a considerable impact on the hospitality industry in the emirate. In addition to the world’s largest indoor theme park, it will feature an entertainment district with a capacity of 15,000, and the world’s largest mall with an area of 743,000 sq metres. Mall of the World will also have 25 hotels connected to the shopping complex proper and 75 other hotels reachable through temperature-controlled walkways, yielding a total of 100 hotel buildings and 20,000 new rooms. Additionally, the complex will include wedding halls and UAE’s biggest conference facility.

The developers have taken on board the lesson learned by Dubai’s mega-retail centres, including The Dubai Mall and Mall of the Emirates. They are planning to build hotels on-site so visitors can shop and dine near their accommodations. “The Mall of the Emirates is a great case study,” George Kostas, CEO of Majid Al Futtaim Properties, told OBG. “It was developed in 2005 when there was little else in that part of Dubai. We are about to celebrate our 10th anniversary and in that time more than 8000 hotel rooms have been built there. ” The clustering effect also helps. “There is nothing substantially supporting these hotels other than the mall, and they are all trading above market levels,” Kostas said. “That is the attraction of malls – hotels attached to or surrounding malls trade better than other hotels.”

Theme Parks

Plans to develop a major collection of theme parks dubbed Dubailand ran out of steam when the emirate was affected by the global downturn in 2008. But with such projects now a major component of the country’s tourism strategy, plans for some of those attractions are being revived, and several are expected to open in 2015 and 2016.

One of these, Dubai Parks and Resorts, a Dh10bn ($2.7bn) development located in Jebel Ali and to consist of five theme parks, was announced in November 2012 by the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum. Led by Dubai-based developer Meraas Holding in association with international movie studios and theme park operators including US-based Six Flags Entertainment Corporation, the megaproject saw its first phase break ground in February 2014, with completion scheduled for 2016. The first phase will consist of three theme parks: Motiongate Dubai based on Hollywood, Bollywood Parks Dubai based on the Indian film industry, and Legoland Dubai, as well as Riverpark, a marine park, a children’s park and Lapita, a family hotel to be operated by the Marriot group.

A second major planned attraction is the IMG Worlds of Adventure theme park currently being built within the City of Arabia site. Set to open its first phase in 2015, the IMG project will have four zones featuring themes of dinosaurs, Cartoon Network characters, Marvel comic heroes, and the Lost Valley, each with its own entertainment rides and retail outlets. Covering about 140,000 sq metres when complete, the development will be the world’s largest indoor, temperature-controlled entertainment park. “With development of the theme parks and other attractions, there’s more hype to draw more people here,” Daniel Andrews, editor of Arabian Travel News magazine, told OBG. “A lot of companies are looking at what else there is to offer. We are seeing luxury-specialised companies looking at outside-the-box experiences. Dubai is starting to offer a lot of those and looking at its cultural offerings as well as the commercial side of the shopping and the luxury.” Some companies, he says, are offering sunrise-in-the-desert experiences or pearl diving excursions.

MICE Market

The meetings, incentives, conferences and exhibitions (MICE) market is already flourishing in Dubai, which has a busy itinerary of trade shows and industry gatherings. The decision to build the UAE’s biggest conference facility at Mall of the World, and legacy plans to develop the Expo 2020 site as a meeting venue, are both targeting this market as well.

There was a clear illustration of the potential of the incentives market in September 2014. The Chinese division of a US cosmetics company, Nu Skin, brought 16,000 of its employees from China for the “2014 Nu Skin Success Trip”. More than 200 flights were booked for the outing, plus 39,000 beds in 40 hotels. Visitors were ferried around in 409 buses and had dinners for 8000 people at a time to recognise their role in developing the brand in China. “The MICE sector is important and it will be increasingly important for us because we are building hotels with large conference facilities,” Al Habtoor’s Fries told OBG. “It is becoming recognised as a fantastic incentive destination which is going to have a positive impact on the hotels.”

Overseas Growth

Following success in Dubai, some leading hospitality firms are investing abroad. Al Habtoor Group has developed two hotels in Budapest, while in October 2014, dnata, a large Dubai travel firm, acquired a UK travel agent, Stella Travel Services, which operates a businesses in retail, wholesale and online tourism. Conversely, for staff employed in the international hospitality industry, working in Dubai has become a sought after experience. “If you are a hotelier and you want to build your career, Dubai is a great destination to spend some of your time, just as Hong Kong, Singapore or North America’s gateway cities are,” Fries told OBG. “It is already being said in the industry, you have to spend some time in Dubai, because you will be exposed to so many different things you will not find anywhere else.”


As one of the pillars upon which Dubai’s success story has been built, the hospitality industry has been growing consistently, and at times rapidly. If the October 2013 announcement that Dubai had won the bid for Expo 2020 was the inspiration to raise the bar and expand, the years ahead will call for perspiration on the part of the hospitality industry, as it works to build more rooms, develop more attractions and cater for even more customers. “By the time Expo 2020 comes around Dubai will have a greater diversity of attractions for the MICE market, to meet corporate demand and the demand from family tourism,” TRI Consulting’s Hewett, told OBG. “Many of the things being developed target one, two or three of these markets.”