Economic diversification has been a primary goal for Ras Al Khaimah’s leadership, and success thus far has mostly meant leveraging the emirate’s varied natural resources to nurture industry and manufacturing. Industrial activity accounts for roughly a third of the emirate’s GDP and constitutes a key element of its diversification programme. At the same time, RAK aims to follow a 20/20 rule – no one economic sector should account for more than 20% of GDP or 20% of the fiscal surplus – thus the emirate is now looking to capitalise on potential elsewhere.
Diverse Offerings
RAK’s climate and geography are natural resources that represent a powerful and attractive combination for tourism. The emirate has 64 km of coastline ready for resort development and a warm sunny climate to match. The 2000-metre-high Hajar mountain range’s excellent climbing routes are also a potential draw, as is the area’s architectural and cultural heritage. RAK is also the UAE’s gateway to the spectacular Musandam area, an exclave of Oman to the north comprising the tip of the Arabian Peninsula as it stretches out into the Strait of Hormuz. Traditional dhow boats run a profitable business taking tourists throughout the coastal mountains jutting out off the mainland, with dolphin tours and snorkelling among the highlights.
Particularly given the backdrop of political unrest and instability in the Middle East and North Africa region, the UAE’s appeal as a holiday destination has strengthened. Previously, this typically meant an urban vacation, most likely in Dubai, however RAK’s new focus on ecotourism is expected to attract travellers keen to explore the emirate’s natural beauty.
Indeed, the nature-first approach adopted by RAK is an appealing and complementary alternative to more traditional city tours, and early measurements by the government indicate that potential is high for ecotourism (see Tourism chapter). The travel and tourism sector, including both holiday and urban business travel, accounted for at least 2% of GDP as of early 2013, according to figures from the RAK Tourism Development Authority (RAK TDA). That figure could balloon to 9% within four to six years, authorities project.
In addition, RAK has positioned itself as an affordable luxury destination and is in the process of building more hotels and resorts, as well as supporting infrastructure and offerings such as malls, entertainment complexes, and an expanded food and beverages sector. To this end, it is also overseeing an expansion of the rejuvenated flagship carrier RAK Airways and an overhaul of RAK International Airport.
New Institutions
The RAK TDA was established in May 2011 as the umbrella body in charge of implementing the government’s vision for tourism. Under it are several organisations including the RAK Hospitality Group, the management company for government-owned assets such as hotels and entertainment facilities. It is also responsible for developing new hospitality, and food and beverage brands, as well as other new entrants to broaden the market.
The key is to balance international best practices with local sensibilities.
The agency has also taken on the responsibility of facilitating private sector enterprise via an electronic licensing and permitting system, and helped to create an attractive and transparent investment climate. Information gathering and processing capacity in RAK is growing from a small base, but the agency’s statistics and data on local tourism are considered among the most reliable on offer from any state agency, according to government officials.
By Numbers
Figures from the RAK TDA show that hotel visitors totalled 835,200 in 2011, up from roughly 600,000 in 2010 and surpassing the year’s goal of 800,000. Total hotel revenue on the year rose 37.6% to Dh400m ($108.9m), while in 2012 this figure increased to Dh595m ($161.95m), according to the RAK TDA. Alongside the long-term target for tourism to account for 9% of GDP before the end of the decade, there is a shorter-term goal of reaching 1.2m tourists in 2013 after surpassing the 1mvisitor mark in 2012.
Increasing Arrivals
Tourist arrivals to RAK currently come from two main sources: European vacationers and local visitors. These are two separate markets, and plans to grow both of them are developing independently of each other. German tourists, who numbered 460,000 in 2012, according to RAK TDA numbers, mainly arrive via charter flights operated by RAK Airways. Russian arrivals were the next largest group at 125,000, and have been such enthusiastic shoppers in RAK’s malls that promotional signs in shop windows often are printed in Russian, as well as in Arabic and English.
British tourists, at 61,000 arrivals in 2012, and Swedes (60,000) made up the next largest groups of European arrivals that year. According to the RAK TDA, overall visitor numbers to the emirate throughout 2012 stood at just over 1.1m, exceeding the target of 1m visitors for that year.
Local tourist numbers are expected to rise in line with the growing list of scheduled regional flights on RAK Airways. For now, however, the GCC market is mostly composed of Emiratis and expatriates living in the UAE who travel to RAK on weekends. RAK Airways flights to destinations in Qatar, Saudi Arabia and elsewhere are expected to boost the number of weekend visitors, and the airline plans to offer promotions tailored to these markets.
Hotels
The hotel expansion under way in RAK promises to help target tourists at a variety of pricepoints, but thus far the most attention has been lavished on the top-end offerings: 2013, for example, saw the opening of the Waldorf Astoria and the Rixos Bab Al Bahr, high-end brands that promise to enhance RAK’s international reputation.
The emirate’s southern area is developing as a particular focal point. South of the traditional city core, the Al Hamra district looks set to become a future tourism-oriented zone. It is here that the Waldorf Astoria and the Al Hamra Fort Hotel & Beach Resort are located, as well as the Banyan Tree RAK Beach resort. Al Hamra is also home to a marina, golf club, mall and other high-end amenities that will complete the offering for tourists. Banyan Tree has also opened an inland property, offering a desert setting at the Banyan Tree Al Wadi resort.
RAK is developing Marjan Island, a series of four man-made islands. Included in the plans are the Rixos offering, as well as mixed-use commercial and retail developments. A second offshore project, Saraya Islands, is also planned, and this will include an additional four new islands. The authorities also have plans for the redevelopment of the Qawasim Corniche area, a stretch of road overlooking the lagoon. The emirate envisions a number of restaurants, a waterfront promenade and a traditional souk-like shopping area for the district. Developing food and beverage offerings is considered a crucial part of the strategy. The director of RAK TDA, Khalid Motik, said revenue from food and beverage outlets in Al Hamra Golf Club totalled Dh4.87m ($1.33m) and Dh3.17m ($863,000) at Al Hamra Marina in 2012.
Flying High
At RAK International Airport renovations are under way to accommodate the anticipated surge in tourist traffic. RAK is just a 45-minute drive from Dubai International Airport, which means that roughly two-thirds of the world’s population lies within an eight-hour plane ride. But capturing all of the potential revenue from tourism in RAK means getting tourists to fly into the emirate itself, as opposed to the major airport lying to the south. RAK Airways will expand its schedule in support of the new developments, and airport executives were expecting to finalise a master plan for the upgrades in 2013. Airport officials told OBG that they believed the runway, apron and adjacent buildings can be reconfigured to boost maximum capacity to 1.5m passengers per year, up from about 800,000. Arrivals, departures and transit passengers reached 406,651 in 2012, according to airport statistics, up 24.2% from 328,348 in 2011. A master plan may also include further upgrades, including perhaps a new terminal.
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