Can Dubai accommodate 15m tourists by 2015?

Posted on 02 May 2008 with no comments from readers

Skeptics have long found themselves challenged by the ambitions of Dubai which often later dumbfounded critics. Will it be the same story for tourism? But then Dubai is already a bigger tourism destination than the Land of the Pharaohs, and the hotels of the future are coming out of the ground.

 

Next week Dubai will host two of the biggest events of the regional tourism sector: the Arabian Hotel Investment Conference and the Arabian Travel Market. The AHIC is a huge trade show for the sector while the ATM is a conference for hotel investors and operators.

 

The AHIC is bigger and better than ever this year, and shows no sign of becoming less popular despite the high attendance fees. For in the current climate owning a hotel in the Middle East has become a license to print money with occupancy levels at the highest in the world and revenue per room up by more than 15 per cent yet again in the past year.

 

This happy economic circumstance has produced a virtuous circle with rising profits funding the construction of ever more exciting lavish hotels and stimulating further demand.

 

Two upcoming entrants to the market are good examples. The Westin Hotel will open its doors to guests from the ATM for its first evening on May 5^th. On view will be the fabulous new public spaces designed by the Italian firm

Studitalia Décor showing great Italian flair with a play on colours, textures, lighting and display art.

 

Then in September the 2000-room Atlantis Palm from Sun International and Nakheel will dazzle the city with its amazing water park attractions, set to include a pod of imported bottlenose dolphins. Both hotels are reported to be already booked out. But is that so surprising? Italian super-cool design on the Jumeirah Beach and a world-class mega hotel on the Palm, these are not everyday hotel offerings.

 

There will be no compromise on quality here to meet tighter budgets in a competitive market. Rather Dubai is realizing that it has to go the extra mile to stay on top of its own success.

 

In August the first of the Emirates A380s will land in Dubai and quickly enter active service on either the New York or London routes. But this is a vital part of an integrated tourism strategy. The 467 seats on the 58 super jumbo A380 aircraft on order will be essential if Dubai is to handle 15 million tourists per annum by 2015.

 

More hotels will be needed too, and there is a pipeline of hotel developments designed to more than double the current room count by that date, including the biggest hotel in the world, the Asia-Asia in Dubailand.

 

Build and the tourists will come. Hoteliers presently moan that they do not have enough rooms to accommodate all the people that would like to stay in Dubai. And each of the major chains has massive expansion plans in place with their owners only too happy to invest in another money spinner.

 

The destination is also investing to provide more for tourists to do. There will be three times as much floorspace in shopping malls by 2010. The three palm island projects are due to add many more facilities for tourists.

 

Then, of course, there is Dubailand. Phase one of this theme park, almost as large as the existing metropolitan Dubai will open in December 2010. That will include the world’s largest shopping mall, Sports City, Motor City, the global village and Universal Studios.

 

Dubai will never come close to Egypt for history but it will be able to keep pace with fun destinations like Australia’s Gold Coast for family entertainment and an aquatic lifestyle. But what could go wrong and upset this vision of Arabian paradise?

 

If you catch tired hotel operators coping with 100 per cent occupancy, they will sometimes whistfully recall the quieter times after the start of the Second Gulf War. That was over five years ago, and the hotels have been busy ever since. But war or terrorism are the twin evils that tourists quickly run to avoid.

 

A more subtle danger is the onset of a global recession, something the IMF now puts at a 25 per cent chance for 2009. People are always very reluctant to cancel their holidays, but executives losing their jobs as a result of the ongoing financial crisis really have no choice. There is a tendency to cut back and retrench when times get tough and save money.

However, a global recession would likely be characterized by an even lower US dollar, and that would make Dubai holidays even better value for the main source of clients in Europe. Indeed, the Dubai travel and tourism sector has probably not seen the end of the good times just yet, and 15 million tourists in 2015 looks a practical target.