UAE Country ProfilePresentation

By: Semi Nabalarua Watisoko Nuenue Tirikula

Inbound and Outbound Tourism in the UAE and its effect on the economy

Introduction• The United Arab Emirates, one of the world's fastest growing

tourist destinations, has all the right ingredients for an unforgettable holiday, sun, sand, sea, sports, unbeatable shopping, top-class hotels and restaurants, an intriguing traditional culture, and a safe and welcoming environment.

• According to the World Bank, It has a population of 9.4million, with expats making up 84% of it’s population

• Their top exports are oil and natural gas which accounts for over 40% of the country’s total GDP. However, in recent years, UAE is no longer solely reliant on the top two exports for revenue, they have now shifted there investments towards tourism, trade, real estate and construction, are also large contributors to the country’s GDP.

• With only a short span of 43 years, after the discovery of oil by the late Sheikh Zayed bin Sultan Al Nahyan, UAE has made itself one of the most lucrative central business district in the world.

• With its continuous growth in business, building infrastructures and other entertainment and leisure facilities, UAE is already becoming a destination with a much lusted for experience by tourist and business travelers

• With a vast majority of tourist travelling to the UAE every year, Dubai, along with other Emirates, are expanding their airports and even building a new airport.

• The recently opened Al Maktoum Airport (DWC), in Dubai can service up to 200million passengers and 16million tons of cargo annually

Bio Data

Social Profile:

• The UAE consists of 7 emirates, Dubai, Sharjah, Umm al Quwain, Ras Al Khaimah, Fujairah, Ajman and the capital Abu Dhabi

• Surface area (sq. km) in the United Arab Emirates was last measured at 83,600 in 2014, according to the World Bank

• UAE has a population of 9.4 million 84% of which is made of expats

and 1.6 million are Emirati citizens

Economic Profile:

• Also, an attractive feature about the UAE is their economic growth, one which attracts a lot of business travelers, diplomats as well as investors

• The economy’s top exports are oil and natural gas accumulating almost 40% of the UAE’s total GDP

• Yet, in order to diversify the economy and reduce the dependence on oil revenues, UAE has been making huge investments in the tourism, financial and construction sectors. Thus attracting foreign money to flow into the UAE economy

Source: www.tradingeconomics.com / National Bureau of statistics, UAE

• United Arab Emirates is one of the most developed countries in the Arab Gulf and has one of world´s highest GDP per capita

• UAE is also the 15th largest in military expenditure in the world, according to the Stockholm International Peace Research Institute. With their budget just over $14 billion.

• It's also on pace to become the world's third-largest defense importer in 2015.

Abu Dhabi Crown Prince Sheikh Mohammed Bin Zayed Al Nahyan (C) watches the closing ceremony during joint military maneuvers between the UAE and the French army in the desert of Abu Dhabi on May 2, 2012

French-made Mirage 2000 and U.S.-made F-16 fighter jets of the United Arab Emirates forces take part in joint military maneuvers' with the French army in the desert of Abu Dhabi May 2, 2012.

Smoke is seen after United Arab Emirates F-16 fighter jets fired missiles during joint military maneuvers with the French army in the desert of Abu Dhabi May 2, 2012.

Members of the United Arab Emirates' armed forces participate in the opening ceremony of the International Defense Exhibition and Conference (IDEX) on Feb. 17, 2013.

U.A.E StrategiesDuring my research I have found that the UAE government has diversified her investments development goals towards;

• Tourism• Financial Institution and• Civil Aviation Industry

These three development goal strategies help the United Arab Emirates to build a more resilient economy, as they all come together to serve common goals for the UAE government economic development.

Tourism Industry;

• Tourist arrivals in the UAE are forecast to grow at a compound annual growth rate of 7.6% between 2012 and 2022, with hotel supply also expected to increase from the current 96,992 hotel rooms in Dubai and Abu Dhabi, to a total of 125,383 hotel rooms in 2016.

• According to a report released by the World Travel and Tourism Council, the UAE accounts for 41% of total investment in the travel and tourism sector in the Middle East.

Inbound

• The report also predicted that the volume of investments in the tourism sector in the UAE would grow by 7% yearly.

• Dubai and Abu Dhabi are considered to be the hubs of tourism in the UAE,

• With such attracting and famous structures such as the; Sheikh Zayed Mosque in Abu Dhabi, Ferrari World that houses Formula Rossa, the fastest roller coaster in the world located in Yas Island and even the Burj Khalifa, the tallest building in the world in Dubai.

Sheikh Zayed Mosque, Abu Dhabi

• Moreover, the development of large-scale projects, such as a D600 billion theme park called Dubai Adventure Studio and the Dubai Art Museum, will ensure that leisure tourism continues to increase.

• Business and conference travel also represents another key growth area.

• Also, the significance of the UAE’s tourism sector in the region is reflected in the number of passengers visiting Dubai, which receives the largest number of visitors of any Arab destination

Formula Rossa, In Ferrari World, Yas Island. It is currently the fastest Roller Coaster in the world. With a top speed of 240km/h (150mph)

The Burj Khalifa in Dubai. It has 163 Floors, with a height of 830m to the tip.

• The 3 places mentioned above are just a fraction of the many other beautiful, historical, cultural and stunning, infrastructures, site seeing, entertainment and leisure facilities made available to the tourists, citizens and residents of the UAE

• The UAE are also diversifying its tourism strategy towards medical care, With well equipped hospitals and clinics and highly qualified doctors, nurses and surgeons at hand, the demand for health within the UAE has been ever increasing, both at home and, from abroad

• Education has also played a major role in the economy, with the increase in highly recognized and well equipped universities, schools, and academies. The academic demand in the UAE is becoming an evermore increasing service.

KHALEEJ TIMES- 25 March 2015 -

• The Asia Pacific is set to increase there arrivals from 2.9 million in 2014 to four million in 2018.

• This reflects the growing wealth of Asia, coupled with increased business travel and significant numbers of expatriate workers coming to the UAE from nations such as India and Pakistan

• The tourism authorities in Dubai are said to be already considering ways to boost the number of inbound tourists from China, India and African nations.

• This involves examining what holidaymakers from these destinations require and tailoring Dubai’s tourism offering accordingly through the development of new hotels and attractions

The new Dh700m specialist woman and children’s hospital in Abu Dhabi scheduled to open soon

Construction of the Kings’ school Al Barsha, English Curriculum.

Outbound

• Travel trade respondents reported strong growth in leisure travel bookings (up 14 percent) as well as business travel bookings (up 12 percent) in 2013 compared to the previous year.

• Due to the rise in income, following the downturn of the economic crisis in 2011, most UAE residents have been spending more on trips abroad.

• The majority of people that leave the country on holiday a between the ages of 18 – 27 (single) during peak season.

• According to the Barometer findings, the winning of the Expo 2020 bid by Dubai has further boosted business and consumer confidence, and the majority of the travel trade projected continued growth in outbound travel from the UAE in 2014.

• Six in ten travel trade respondents in the Barometer survey projected an increase in bookings in first quarter 2014 compared to the same period in 2013, while over eight out of ten respondents projected higher bookings in second quarter 2014 compared to the same period in the previous year.

• The UAE is the 21st largest travel market in the world in terms of outbound travel expenditure, with total spend of US$15.1 billion on outbound travel in 2012, as per UN World Tourism Organization (UNWTO) statistics

20 Most visited places in the World by UAE residents

1.Cairo 2.Amman3.Beirut4.London5.Istanbul 6.Bangkok 7.Doha8.Manila9.New York10.Toronto11.Manama12.Muscat13.Jeddah14.Colombo15.Paris 16.Male17.Riyadh18.Mumbai19.Kuwait City20.Washington DC

• Expedia.com said Cairo came out on top of the list which has been based on bookings performed on Expedia sites such as hotwire.com, trivago and Expedia itself, beating Amman in Jordan and Beirut in Lebanon into second and third place.

• Cairo also saw the biggest increase in bookings in 2014 compared to the previous year, ahead of Saudi capital Riyadh, Expedia said in a statement.

• Based on bookings and year-on-year comparisons, Expedia predicts that Cairo, Beirut and Amman will also be the top outbound travel destinations for 2015.

• New York and London are expected to each move up in the ranking to fourth and fifth places, respectively.

Analysis of Inbound and Outbound Tourism

The decision of diversifying economic activities towards tourism has proven to be a well invested profitable business. With growing demands of luxury vacations and more leisure activities, what better place to provide such an extravagant and unforgettable adventure than the U.A.E. Therefore, consumer demands for travel will and always be an ever increasing one.The UAE tourism industry will continue to expand in 2015, with 7.6 per cent year-on-year growth in tourist arrivals and 9.3 per cent increase in tourism receipts, according to a report by Business Monitor International (BMI).

Financial Industry:

• The UAE's attractiveness as a country to invest in is improving despite the Middle East region seeing a drop in foreign direct investment (FDI)

• The UAE moved up one place to claim 14th position in the latest AT Kearney Global Foreign Direct Investment Confidence Index (FDICI).

In a report submitted by Mr. Anshu Vats, partner at AT Kearney Middle East, he stated and I quote:

"With strengths in logistics, tourism, and hospitality, the UAE remains the pocket of strength for regional investments in the Middle East. FDI could increase in coming years as the UAE eases foreign ownership laws,"

• The report highlighted the UAE's "well-developed infrastructure, strategic location, and tax-free base" as reasons for increased international investment.

• According to Sovereign Wealth Fund Institute, an increasing number of sovereign wealth funds and other large public institutional investors have boosted their activity in direct investments, participating in acquisitions globally.

• The figures released by SWF Institute show an increase in the transactions taking place. In 2013, the institute’s database shows that GCC-based sovereign wealth funds made $20.2 billion in direct transactions, an increase from $18.32bn in 2012.

• There has also been a major growth of private sector businesses in the UAE. So banks have taken it upon themselves to create a more friendlier policies towards banking and financial partnership with the private sector

• The government grants these private sector businesses subsidies in order to boost productivity so that the UAE based businesses can gain capital advantage against their competitors by selling their services and or products on a much wider market both at home and abroad

Civil Aviation Industry

Civil aviation has been growing rapidly in the UAE, With several airports all around the seven emirates are being extended and the recently opened airport in Dubai (Al Maktoum Airport). These new developments have been the result of the ever increasing number of INBOUND TOURISM. Airlines such as;

• Emirates• Etihad• Air Arabia• Fly Dubai

are all UAE based airlines, they have also been expanding their operations facilities in order to facilitate the forecasted growth on tourism in the coming years. Since the development of UAE, over 42 years ago, civil aviation has played a primary role in connecting the UAE to the rest of the world and vice versa.

• Civil Aviation has been used in many possible ways to help the UAE develop and increase its economic activity and help boost its wealth.

• Not only has it the civil aviation used there resources for the benefits of airports, they have also contracted hotels, such as the Millennium Hotel in Dubai.

• It is conveniently located near the Dubai International Airport and the city’s major central business and historical districts (Bastakiya and Sheikh Saeed Al Maktoum Heritage House), tourist spots (Gold Souk), shopping centers, and entertainment hub.

• Tourists are mostly attracted by the connivance of where the hotel is located an the attractive services provided by the airline during their duration of stay.

Millennium Hotel in Dubai

• The UAE has taken pride for there achievement by winning the 2020 expo, thus leading the rise of new hotel constructions, foreign investments and the rise in developments of airports

• The Al Maktoum International Airport was opened to facilitate the rise in the number of tourist and big aircrafts such as the A-380, flying in and out of the UAE

• The first runway at Al Maktoum International Airport, set to be the world’s largest, at Jebel Ali in Dubai, has been completed on time in the projected 600 days. This is an aviation record for the fastest A-380 enabled 4.5 kilometre.

• Taking such huge passenger flows, baggage handling, car parks, check in counters, security checks, facility management, amenities, flight paths, ground handling, taxiing flows, roads and infrastructure and air traffic control into consideration, has been the first priority in planning the airport. Making it convenient for departing and arriving passengers

• The Al Maktoum International Airport can service up to 200million passengers and 16million tons of cargo per annum

• Dubai — The UAE aviation sector will continue to sustain upward trends in terms of opening of more routes and increase in frequencies with the induction of more than 50 planes this year, according to industry sources.

• Emirates and Fly Dubai – both Dubai based airlines - will lead the table with the possible deliveries of 33 aircraft worth around $10.5 billion at list prices.

• Sharjah-based Air Arabia is looking for six Airbus A320 aircraft worth around $563 million at list prices this year.

• Etihad Airways, which expects 204 aircraft by the end of 2025, is also likely to induct a minimum double-digit number in its fleet this year.

• Emirates airline received 27 deliveries worth around $10 billion at list prices. The airline balanced the aircraft induction into its growing fleet by adding 13 Airbus A380s, 12 Boeing 777-300ERs and two 777 Freighters. Emirates’ total fleet size stands firm at 232 aircraft at present.

SummaryOver the years, U.A.E has proven to be one of the most industrious nation in the world. With only a short span of 42 years, its government has developed, and beyond all odds, shaped its country to be well on its way to becoming the world’s number one hub for business trading as well as a famous tourist hotspot.In recent years U.A.E has become well known for its leisure and luxurious life style, thus attracting more and more people in each year who also wants in on a piece. Even though luxury might play a center stage at promoting the U.A.E for its glamorous place that it truly is, they also give more importance towards civil aviation, the one physical factor that connects the rest of the world to the U.A.E.Civil aviation in the U.A.E has become increasingly essential. Its growth have proven to be a driving force for the greater good of the economy and its people. With the persistent growth of the country, civil aviation is beginning to meet a rise in demand for its services and

Conclusion

In view of my research, I conclude that UAE is the HUB of:

• Tourism• Trade• Investment• Education• Medical Services• Industries (Manufacture Re-export)

The diversification of the UAE economy will surely see an exponential growth in years ahead as compared to other countries in the Gulf or greater

Recommendations

• Travelers nowadays often like to carry a lot of stuff with them when they travel, which usually means that their baggage will be over the weight limit, so a good package deal with for example, 30kg each luggage instead of only 20, would draw in a lot of customers to your agency

• Another is a ‘transit hotel booking’ passengers are always looking for a good rest after a long haul flight, so the easy transition from the arrival gate to the hotel without worrying about luggage is a definite plus

• Sight seeing package for transiting passengers is also a factor that can boost foreign money to flow into the economy.