With the long-awaited Expo 2020 just around the corner, attention in Dubai has already started to shift beyond the Expo to the emirate’s long-term prospects as a tourism destination. Passenger numbers at its airport, one of the busiest in the world, have not been unaffected by regional economic headwinds. Nor have hotel occupancy rates and average daily rates emerged unscathed from the pre-Expo supply boost. But the emirate remains a major draw, and by and large there is a sense among public and private sector stakeholders that the constant mining of new source markets, fine-tuning of regulation and willingness to adapt to changing visitor expectations will generate enough momentum to maintain growth both in the lead-up to the Expo and beyond.

Structure & Oversight

The main government body regulating tourism in Dubai is the Department of Tourism and Commerce Marketing (DTCM). As well as setting the sector’s strategic direction, analysing its performance, and licensing and classifying tourism services such as hotels and tour operators, the DTCM markets and promotes Dubai internationally as a destination for tourism and commerce. To this end, it operates 20 offices worldwide. As part of its overarching mission of “strengthening Dubai’s economy by attracting tourists and inward investment” to the emirate, the DTCM’s vision is to attract 20m visitors and “establish Dubai as the leading destination for global travel, business and events by 2020”.

Looking beyond 2020, the DTCM revealed new tourism targets in October 2018, seeking to attract 21m-23m visitors by 2022 and 23m-25m visitors by 2025. By realising these targets the department hopes to see Dubai become the most visited city in the world. According to the 2019 Mastercard Global Destination Cities Index published in September 2019, Dubai was the fourth-most visited city in the world in 2018 with 15.93m visitors, a 1.68% increase, after London, Paris and Bangkok, which hosted 19.09m, 19.10m and 22.78m international overnight visitors, respectively.

The Dubai Municipality oversees all urban development throughout the city, including hotels and hotel apartments. Part of its mandate is to safeguard against a future oversupply of accommodation. Among the initiatives it rolled out to boost tourism in 2018 was the reduction of municipality fees on sales at hotel facilities from 10% to 7%.

The municipality fee is separate from the hotel tax, also known as the tourist dirham, which was introduced in March 2014 and varies according to the room rates at the hotel and the number of nights the visitors are staying. The revenue that is raised is intended to support further promotion and investment in the emirate as a tourist destination and fund additional Expo 2020 projects.


The DTCM has recently placed greater emphasis on sustainability in its tourism policy, including the rollout of carbon calculator software for hotels in 2017 and hotel emission analysis reports for hotels in June 2019, as well as greenhouse gas reduction programmes. The annual reports will provide hoteliers with a comprehensive analysis of their emissions, benchmarks against competitor hotels and suggestions for improvement.

In the “Destination 2030” report, published by the World Travel & Tourism Council (WTTC) in cooperation with real estate consultancy JLL in June 2019, Dubai was commended for its sustainable tourism policy. The report places it in the highest quartile for “supportiveness of policies in terms of fostering a sustainable pace of tourism growth”. The WTTC also highlighted the DTCM’s Green Tourism Awards scheme, which has been in operation since 2009.

According to Wilson Joseph, COO at Abidos Hotels, transparency is a hallmark of hotel regulation in the emirate. “Everything is black and white. You have a whole list of criteria you have to follow, whether it is related to security, health and safety, or tourism board regulation. All of these issues are audited periodically through inspections and annually upon renewal of the licence. We are very clear on the standards that need to be met,” Joseph told OBG. “Our checklist includes the quality of pillows, bed linen and bath linen used in the rooms, safety hazard regulations and standards expected in the kitchen, the pH value and level of chlorine in the pool, carbon emissions reports, and safety standards that are related to hotel guests including accessibility and training to handle people of determination.”

Performance & Size

As there is no category specifically assigned to tourism in the system of national accounts used by the Dubai Statistics Centre (DSC), the Dubai Department of Economic Development (DED) considers the category of accommodation and food service activities the best guide to tourism’s annual contribution to GDP. According to the DSC, accommodation and food services activities accounted for 4.9% of the emirate’s GDP in 2017 and 5.1% in 2018, growing from Dh19.24bn ($5.2bn) to Dh20.11bn ($5.5bn). Foreign investor confidence in Dubai’s tourism sector remains high, with accommodation and food services accounting for 46% of foreign direct investment in the emirate in 2018, equal to approximately Dh17.7bn ($4.8bn) and far exceeding that of any other sector.

The real economic contribution of tourism in Dubai likely considerably surpasses that indicated by accommodation and food services. For example, in 2017 international visitors to Dubai contributed an estimated 24.8% of a total of $35.7bn in annual retail sales, or $8.9bn, according to the DED. Mastercard’s 2019 Global Destination Cities Index found that international visitors had an average daily spend of $553 in Dubai during 2018. This is the highest in the world by more than $250, with visitors to Paris, the city with the second-highest outlay, logging an average daily spend of $296. A total of $30.82bn was spent by international overnight visitors to Dubai in 2018.

Air Travel

One of the contributing factors that has facilitated transit and visiting tourists’ stays is the attention placed on increased airport infrastructure. Dubai is served by two international airports, Dubai International Airport (DXB) and Dubai World Central (DWC). Both airports are owned and operated by Dubai Airports, which was established in 2007 following restructuring of the Department of Civil Aviation. DXB has been the world’s busiest airport in terms of international passenger traffic every year since 2014, including 2018, when approximately 89.1m flyers used the airport and it welcomed its one billionth passenger. DXB currently operates at almost its full capacity of 90m, though capacity is set to increase to 118m by 2023.

DWC first welcomed passengers as a 5m-capacity terminal in October 2013, subsequently increasing this capacity more than five-fold to 26.5m via an expansion project completed in 2018. A further phase of expansion – bringing the airport’s annual capacity up to 160m – was initially planned for completion by 2025 but pushed back to 2030 by Dubai Airports in 2018. Part of a 140-sq-km multi-phase development in the south of Dubai, DWC is ultimately earmarked for a capacity of 260m.

Despite DXB welcoming 89.1m passengers in 2018, the year fell short of Dubai Airports’ 2.3% target, recording only 1% growth for passenger traffic, the lowest annual figure registered since prior to 2011. The modest growth rate can be linked to weaker travel demand in the region while a strong US dollar – to which the dirham is pegged – which means higher costs for those travelling to the UAE from outside the GCC. In May 2019 Emirates reported that the Middle East and the Gulf was its only operating region to post a decrease in revenue for the financial year ending March 31, 2019.

DWC received a major boost in passenger numbers during the first half of 2019, rising 141.1% year-onyear (y-o-y) to reach 1.25m passengers. The unusual growth bump came thanks to the 45-day closure of the southern runway at DXB during the second quarter, when many airlines transferred operations to DWC. As a result, flights at DXB were down, decreasing by 5.6% y-o-y in the first half of the year. While growth figures for passengers in 2019 are likely to be affected by the runway closure, DXB is expected to bounce back in the build-up to Expo 2020. The airport invested in improving operational standards during 2018, resulting in a reduction in customer wait times by 45% in November 2018 alone.

Expo 2020, a 173-day event running from October 20, 2020 to April 10, 2021, is expected to provide a strong boost to international arrival numbers at both DXB and DWC. The event will host 192 country pavilions in a 438-ha venue in Jebel Ali, in the Dubai South district, in proximity to DWC. According to the Dubai branch of global consulting firm EY, an estimated 25m visitors are expected at the event.

Source Markets

In 2013, with visitor numbers for the previous year standing at 10m, Sheikh Mohammed bin Rashid Al Maktoum, vice-president and prime minister of the UAE, and ruler of Dubai, signed off on a programme to increase Dubai’s visitor numbers to 20m by 2020. While it remains to be seen whether the emirate will be successful in reaching its target, visitor numbers have grown consistently since the announcement, reaching 15.92m in 2018.

According to the DTCM, the emirate received 10.85m international guests between January and August 2019, a y-o-y increase of 3.9%. Western Europe and the GCC were the largest source markets, each accounting for 20% of visitors, followed by South Asia with 16%. At a country-by-country level, the largest source market was India, at 1.24m, followed by Saudi Arabia (1.13m), the UK (759,000), Oman (703,000), China (650,000) and the US (435,000). Of these, visitors from Oman posted the highest growth on the same period in 2018, increasing by 30% to leapfrog China into fourth position. China showed the second-highest growth of these countries, at 12%, while outside the top six, visitor numbers from the Philippines, the 10th-largest source market, increased by 30%.

One of DXB’s most successful strategies has been positioning itself as a transit hub within the region, with over 63% of the passengers passing through DXB in 2018 doing so in transit while travelling to a different final destination. As a means to convert these transit passengers into tourists, in September 2018 the UAE Cabinet announced that they would be offering free 48-hour transit visas to eligible travellers. Longer transit visas of 96 hours are also available at a cost of Dh50 ($13.61).

Hotel Infrastructure

As of August 2019 there were 712 hotel establishments in Dubai, including hotels at all star ratings, as well as hotel apartments. The highest number of hotels were in the one-tothree-star category, at 252, although the five-star category has the highest number of rooms, with a total of 40,423, or 34% of the total inventory.

As Expo 2020 approaches, it is perhaps not surprising that Dubai’s hotel construction pipeline is among the busiest in the world. According to Lodging Econometrics, a real estate intelligence firm specialising in the hospitality industry, in 2018 Dubai was second only to New York in the number of hotel construction projects under way planned, and first in terms of rooms. Dubai had 168 hotel construction projects and 49,950 rooms in the pipeline, while New York had 171 projects and 29,460 rooms.

As the Expo’s official hotel and hospitality partner, Emaar Hospitality Group was among the headline developers in the 2019 pipeline, with five projects opening during the year. In the high-end and luxury category, the developer’s properties include Vida Emirates Hills, Vida Harbour Point, Address Fountain Views and Address Sky View. Opening in June Rove at the Park, a 579-room family hotel at Dubai Parks and Resorts, forms part of the mid-range category.

Between January and August 2019 average occupancy across all categories was 73%, with standard hotel and deluxe or superior hotel apartments recording the highest average occupancy rates at 76%. As a result of a hotel supply pipeline that has been steadily increasing in recent years – with the total number of hotels rising 54% from 462 in the first quarter of 2016 to 712 as of August 2019 – concerns had been raised that demand would not match supply, and profitability would suffer. In general, however, occupancy is declining only marginally: hotel room occupancy decreased by four percentage points y-o-y, from 87% in the first quarter of 2018 to 83% in 2019, while occupancy fell from 77% in the second quarter of 2018 to 75% in 2019.

According to Kamran Masood Malik, group general manager at Al Ansari Hospitality, occupancy has remained high only as a result of market pressures to provide increasingly competitive rates. “Travel agents – including online travel agents – put a lot of pressure on hoteliers to lower their rates and maintain high occupancy. While lower occupancy and higher average daily rates are better for business, it is hard to fight against the tide when everybody is pursuing high occupancy,” Malik told OBG.

Holiday Homes

Beyond the traditional hotel sector, Dubai is also home to a large number of hybrid hotel apartment-style properties and serviced apartments, as well as a sizeable holiday home segment. Hotel apartments, which usually combine built-in kitchen facilities with the services of a hotel, tend to appeal to families and those staying for longer periods. This likely means that many of those coming to Dubai to visit the international pavilions of Expo 2020 will opt to choose this option.

Sherif Mekhemer, general manager at Royal Vacation Homes Rental, which has properties on Dubai’s Palm Jumeirah, says that families from the GCC are targeted as they are their primary market. “The majority of our guests are from Saudi Arabia, followed by Oman and the UK, as well as the guests visiting from other emirates. We do not enjoy as much business from India and China, as these visitors tend to prefer hotel accommodation close to the malls,” Mekhemer told OBG.

The holiday home segment, which was first formally regulated in 2013 by the UAE Cabinet under Decree No. 41, also encompasses online peer-topeer rental platform Airbnb, which had 10,766 active listings as of the second quarter of 2018. The government of Dubai imposes certain conditions on Airbnb’s operations within the emirate, such as the prohibition of leasing out just one room or bed, as well as the requirement that hosts be contactable 24 hours a day by guests. Research by real estate consultancy Knight Frank published in early 2019 concluded that holiday homes have had a discernible impact on the hospitality market. More generally hotels have outperformed the market for holiday homes. However, the summer months remain the exception, as holiday homes either compete on par with hotels or even outperform them.

Leisure & Entertainment

Dubai’s leisure and entertainment (L&E) segment has grown substantially over the last several years, with 2016 seeing two major regional theme park destinations open up in the emirate. Dubai Parks and Resorts, owned and operated by DXB Entertainments, and IMG Worlds of Adventure, operated by IMG Group, continue to dominate the segment, which plays a strategic role in helping the emirate appeal to the family tourism market when competing with other regional markets.

Dubai Parks and Resorts is the region’s largest integrated theme park resort, including LEGOLAND Dubai, MOTIONGATE Dubai and Bollywood Parks Dubai, while IMG Worlds of Adventure includes four adventure zones: a zone each dedicated to Cartoon Network and Marvel, as well as IMG Boulevard and Lost Valley: Dinosaur Adventure. IMG Group describe the park as “the largest temperature-controlled indoor themed entertainment destination in the world”, with a capacity of 20,000 guests per day.

DXB Entertainments had been planning to build another theme park, an iteration of the Six Flags franchise, but construction was put on hold in April 2019, paying Six Flags Entertainment $7.5m for the rights to decide over the next five years whether to proceed with the project. Dubai Parks and Resorts has posted limited net profits results since listing in 2014, however, the move is expected to help the company in continuing to narrow its operating deficit. Visitor numbers at Dubai Parks and Resorts were relatively healthy in the first half of 2019, falling fractionally overall, from 1.46m to 1.4m, but growing by 5% y-o-y in the second quarter.

IMG Worlds of Adventure’s CEO Lennard Otto, told OBG that the mixed visitor numbers reflect the sudden influx of supply since 2016. “In a few short years Dubai has built theme park capacity that elsewhere would typically serve cities of 10m-20m,” Otto said. Just as with other segments, L&E is likely to get a boost from Expo 2020. “There will definitely be a noticeable surge next year with the number of visitors from the Expo,” Otto told OBG.

Conference & Exhibitions

While aiming to attract a larger share of leisure tourists, the emirate has taken a dual approach of also appealing to business tourists at the same time. Dubai is one of the world’s top-20 business destinations, with its meetings, incentives, conferences and exhibitions (MICE) segment generating $653m per year, according to Frost & Sullivan. The segment is forecast to grow at a rate of 7% a year by 2020, when its value is anticipated to be more than $1.39bn. Growth in the segment is actively supported by the UAE government, which introduced a value-added tax refund on MICE activities in May 2018.

According to the “Statistics Report 2018” issued by the International Congress and Convention Association, Dubai continues to be the Middle East’s leading MICE destination in terms of the number of association meetings, hosting 55 in 2018. The city’s largest venue for events is the Dubai World Trade Centre, a 30,000-capacity venue which celebrated its 40th anniversary in 2019. The previous year it hosted a record 3.43m visitors and 363 events. Other key MICE venues in the city include the Le Méridien Dubai Hotel and Conference Centre, with a capacity of 1750, and the Madinat Jumeirah, with a capacity of 4500.

Medical Tourism

Medical tourism, overseen by the federal Ministry of Health and the Dubai Health Authority (DHA), is another segment being looked to as a source of sector growth. While patients’ primary purpose of travel benefits the health care industry, ancillary spend and extended stays have a knock-on benefit for the country’s tourism sector. The DHA has had a medical tourism strategy in place since 2014 and recently updated this with the Medical Tourism Strategy 2017-21, aiming for high annual growth of 13% and 500,000 health tourists by 2020. Countries targeted by the strategy include Russia, India, Pakistan, Nigeria, Angola and the UK.

Cruise Departures

Cruise tourism in Dubai is regulated and promoted by Dubai Cruise Tourism (DCT), a body within the DTCM. DCT works in close partnership with DP World, the emirate’s port and terminal operator. DP World operates three cruise terminals from Mina Rashid, also known as Port Rashid. The port facility measures 36,500 metres on a 2.2-km pier, with a combined capacity of six cruise vessels and 25,000 passengers. The largest of these is the Hamdan bin Mohammed Cruise Terminal (Dubai Cruise Terminal 3), inaugurated in December 2014 and comprising 27,000 sq metres of total terminal and baggage-handling space.

In the 2018/19 cruise season Dubai recorded a 51% increase in cruise tourists and a 38% rise in cruise ship calls. The Mina Rashid Cruise terminal welcomed a total of 846,176 cruise visitors via 152 ship calls – a sizeable jump from 558,781 visitors and 110 ships during the 2017/18 season. As of August 2019 an additional 211 ship calls had been confirmed for the 2019/20 cruise ship season. As part of the DTCM’s Tourism Vision 2020, the DCT is aiming to attract 1m cruise tourists annually by 2020.

Dubai’s cruise tourism capacity is set to continue to increase in the long term, with plans for the construction of the region’s first dedicated cruise port at Dubai Harbour. It was announced in July 2019 that UAE-based construction group ASGC will build the port, which will be made up of two main cruise terminal buildings on a 1-km-long port. The additional port capacity is based on growth forecasts in cruise tourism worldwide and in the region. The Cruise Lines International Association has forecast that the number of passengers travelling on cruise ships will increase by 40% by 2030, while the UAE’s maritime tourism segment is expected to be worth Dh1.5bn ($408.3m) to Dubai’s economy by the same date.

Marketing Opportunities

The marketing division of the DTCM, the Dubai Corporation for Tourism and Commerce Marketing (DCTCM) is seeking to maximise the potential of technology while catering to a global shift directed towards experiential tourism. Issam Kazim, CEO of DCTCM told regional media in January 2019 that the DTCM is working on Tourism Strategy 2022-25, which will exemplify its “digital, mobile and social first” agenda.

As early examples of how this agenda would look in practice, Kazim cited the DTCM’s development of the Metro Moments and Al Fahidi Architecture Tour apps, which provide guided audio tours supported by GPS technology. In 2018 the DTCM sought to use digital strategies to appeal to the Chinese market, launching a WeChat Mini programme and collaborating with Chinese technology brands Huawei, Tencent and Fliggy on the production of interactive content that is related to Dubai. In addition to new digital strategies, the DTCM continues to be active in promotional activities via its 20 offices worldwide.


As Expo 2020 approaches, Dubai’s tourism sector looks well positioned to harness the marquee international event’s potential as a showcase and turn it into new source markets and further momentum heading into 2021 and beyond. Investment figures remain high, reflecting private sector confidence in the long-term profitability of the tourism industry. The government’s announcement of a 2022-25 strategy, and its increased focus on sustainable, digitally native and experiential tourism indicates it is positioning itself for sustained growth. Even with the addition of new hotel and airport capacity, 2020 and 2021 are likely to see increased margins for hoteliers and strong passenger throughput at both DXB and DWC. While it is possible that even the most savvy actors in the promotion and management of the sector are exposed to regional and global economic tides, Dubai may yet realise its ambitions of becoming the most visited city in the world in the years immediately following the Expo.