Tourism
has been a key pillar in the UAE’s strategy to reduce its
dependency on oil revenue in recent years.
Due
to investments in architecture and cultural events, tourism now forms
13.5% of the GDP.
The
country’s tourism strategy works in partnership with its plan to
develop cities, primarily Dubai and Abu Dhabi, as major airline hubs.
As the UAE does not have an old history of cultural sights, tourism
has been built around luxury living, shopping, exhibitions, sports
and major architectural projects such as the Jumeirah Palm - an
artificial palm-shaped archipelago.
Major
events drive inbound tourism
In
2012 arrivals to the UAE rose to 11 million which confirms that the
UAE continues to be a popular tourist destination. Growth in tourism
has been fuelled by events such as the Formula 1, the Grand Prix in
Abu Dhabi, the Dubai Shopping Festival and the Dubai World Cup - the
world’s most expensive horse race. Most people come from Europe,
followed by Asia and the Middle East. To boost tourism further the
country plans a number of big architectural projects. These include
the Mohammed Bin Rashid City, which consists of 100 hotels, the
world’s biggest shopping mall and a Universal Studios theme park,
as well as the Jebel Ali complex, which will feature five theme parks
and a replica of the Taj Mahal.
Domestic
tourism on decline
According
to new research from Timetric, domestic tourism fell from 6.7 million
domestic trips in 2008 to 5.5 million in 2012, at a CAGR of -4.8%.
This is due to a number of reasons. First, the UAE is home to a large
expat population and many prefer to travel to their home country when
they are on vacation. Secondly, most UAE citizens travel abroad to
escape the heat during summer, which is also when schools are closed.
Finally travel costs within the UAE are rising, due to high tolls and
lack of budget accommodation.
Outbound
tourism records marginal growth
Outbound
tourism increased at a marginal CAGR of 0.7% from 2008 to 2012. The
main reason is the continued economic uncertainty in Europe. As
people from the UAE tend to spend more money when traveling abroad,
outbound tourism expenditure rose at a CAGR of 2.45%, again making it
much higher than inbound tourism expenditure in 2012.
