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Tourism sector contributes AED161 billion to UAE GDP

 

Al Mazaya: Tourism outvalues other sectors in terms of investments

 

Hotel real estate investments proved feasible despite market headwinds

 

Chinese set to account for 25% of international tourism by 2030

Current developments and decisions addressing the tourism industry indicate that the sector will draw the largest share of investments and generate more economic values to the UAE economy more than any other income streams.

UAE government’s efforts and those of the private sector are currently combined to come up with strategies aimed at maximising the value of returns and contributions to this sector and to enhance its competitiveness on account of its significant growth rates and the long-term investments it is attracting.

According to Al Mazaya Holding’s weekly real estate report, current industry reviews are focused on developing the sector’s capabilities, paying special emphasis on innovation and digital transformation of the sector’s activities. This will contribute to driving revenues and enhancing investment opportunities for SMEs to grow.

The re-evaluation of fees and taxes imposed on the tourism sector is meant  to support competitiveness and raise the operating values of the sector, said the report, noting that the tourism sector is one of the pillars of the UAE’s modern economy, contributing to its GDP by more than AED161 billion, while more efforts are underway to augment this value up to AED234 billion by the year 2027.

The tourism sector, regionally and globally, has become an increasingly stable investment area as it’s drawing consistent economic and financial returns for all major economic sectors. The successive successes made on the tourism sector contributed to encouraging investors to expand their activities in the region, which has had a significant impact on stimulating the economic sectors that are directly and indirectly related to the industry, especially the real estate, commercial and service sectors.

In the meantime, the industrial sector has become a major supporter and beneficiary of economic activities. Previous experience and crises have shown that the tourism sector is a major enabler for overcoming crises. Real estate projects related to the tourism sector are on the rise despite the challenges and obstacles faced by other economic sectors, said the report.

Industry data indicate that fair occupancy levels have been maintained this year, remaining at an average of over 85%. Beach hotels contribute to improving overall performance indicators for the hospitality sector in Dubai. Price declines contributed to boosting occupancy rates for the hotel sector. Marketing efforts and promotional campaigns have led to positive results and contributed to attracting more visitors from all countries of the world.

The GCC states are expected to witness a significant increase in the number of Chinese tourists to 29 million in 2022, as the economic relations between the GCC and China are growing, with the Chinese economy expected to secure high growth rate that will reflect positively the per capita income.

Al Mazaya pointed to the myriad opportunities that the growth in relations with  China is set to generate. Chinese are set to account for 25% of world tourism by 2030. The diversification and development of the tourism sector in the region will attract millions of Chinese tourists, which will turn the GCC states to be the top tourism market for Chinese travelers, with the UAE market witnessing an annual growth rate of 13% in the number of Chinese tourists and China becoming the UAE’s fifth largest source of overseas travel.

The report highlighted the positive impact of the recently announced acquisition deal in Dubai as an indication of the myriad investment opportunities available in the real estate sector in the emirate. The report said the total value of selling the five hotels is expected to reach AED2.198 billion with the financial impact of the deal anticipated to materialise in the first quarter of 2019.

The tourism sector significantly contributes to the current high rating of the UAE economy, now regarded as the region’s best thanks to the well-throughout-out planning, development strategies being charted to diversify income streams and secure sustainable growth on key sectors, particularly trade and tourism.