TOURISM IN ABU DHABI: A DESTINATION FULL OF OPPORTUNITIES
- May 14, 2014
- Posted by: RKonnect
- Category: Hospitality & Tourism
Like Dubai, hospitality is high up on the agenda for Abu Dhabi, the capital and the largest emirate of UAE, as indicated by one of its best performance in 2013; wherein it received a total of 2.8 million guests, with a total 8.8 million night stays, a 26 percent jump from 6.98 million nights stays in 2012. The total revenue received in 2013 was around AED 5.5 (USD 1.5) billion, up by 18 percent from previous year. The overall occupancy was estimated at around 78 percent, whereas Average Room Rate (ARR) was estimated at AED 760 (USD 207) and Revenue per Average Room (RevPAR) was AED 588 (USD 160) respectively.
No Doubt, Abu Dhabi, where energy exports still constitutes 55 percent of the overall GDP, is seeking prudent steps towards a more diversified and well balanced economic set up. Taking a cue from neighboring Dubai, Abu Dhabi is developing its hospitality sector in tandem with retail and construction sector to lessen its dependence on energy exports.
Hence, business tourism in the form of meetings and exhibitions comprises of 60 percent of Abu Dhabi’s tourism exports, pertaining to the strong economic influence, the emirate holds in the region. Once a less than AED 200 (USD 54.5) billion GDP at the beginning of 2000; the Abu Dhabi with a present GDP of AED 950 (USD 259) billion has traversed a remarkable distance. Though energy exports are principal pillar of the economy; the non-oil component driven by construction, tourism, hospitality, manufacturing and technology etc. is estimated at AED 430 (USD 117) billion, witnessing a double digit growth rate.
The leisure tourism landscape is still comparatively subdued. Nevertheless, thanks to powerful liquidity, Abu Dhabi has built up some exciting avenues in the recent past such as the Ferrari Formula One race track, Ferrari Theme Park in Yas Island and the Sheikh Zayed Mosque to name few. While the former also complement sports tourism, the latter is the only mosque in the country, which can be visited by Non-Muslims as well, giving them an opportunity to explore and understand the Islamic culture and heritage. Not to mention the under construction AED 100 (USD 27.2) billion cultural districts in the Sadiyat Island which once complete will be home to three world class museums.
In line with Dubai, Abu Dhabi’s strategy also involves aggressive destination marketing and extension of its existing aviation sector to Konnectvigorously with new and existing places with India being the biggest oversees market followed by United Kingdom and Germany. Both European countries have demonstrated a 25 and 31 percent rise in guest nights respectively compared to 2012.
As a part of its sustainable approach, the emirate is also synergizing its rising retail industry with the burgeoning tourism sector by working on a range of shopping malls such as Sowwah Central, Yas Island Mall and Reef Mall etc. Its retail space, which is registering an 18-20 percent annual growth, capitalizes on lesser annual rental price of AED 257 (USD 70) per Square Feet, compared to AED 400 (USD 109) in neighboring Dubai, integrated with large per capita GDP of AED 400,000 (USD 109,000) and an underutilized market. Developing of a robust retails space should help it raise its stature similar to Dubai, which is known for world class malls such as Mall of Emirates and Dubai Mall among tourist fraternity.
To summarize, Abu Dhabi is targeting 3.1 million tourists in 2014, a figure which has been revised from initially intended 2.8 million as the emirate, pertaining to the good performance previous year. Almost one third of the target has been met so far, thanks to the IPL event, which saw volumes of visitors from India. Similarly due to the ongoing high voltage economic diversification under the Abu Dhabi 2030 plan, more and more investors, businesses, MNCs and entrepreneurs are visiting the Emirate, which is adding up to number of visitors.
In the short run, an above average growth of 8-9 percent for can be expected for the hospitality industry in Abu Dhabi. However, further to which the sector should get a boost and experience a double digit growth in the range of 14-15 percent driven by extension of new urban localities in Sadiyat, Yas, Sowa and Reem Islands along with graduation of high profile tourism, retail and ecotourism projects. Not to mention, the Abu Dhabi 2030 Economic Vision Plan and the proposed AED 25.7 (USD 7) billion tram and metro project which can repeat the magic that it has done with Dubai by boosting intra-city and commuting.
In nutshell our research finding indicates that tourism in Abu Dhabi is all set to demonstrate remarkable growth. Along with hotels and resorts, there should plenty of opportunities for retail and food & beverage business to leverage on the extrapolated high tourism influx.
This research report is compiled by Research Konnection Team; a Dubai based market research and business consulting firm that is focused on capturing latest insights of major events across various sectors and industries in UAE. If you are looking for more research, information and qualitative/quantitative data or want us to prepare feasibility studies, then feel free to contact us on firstname.lastname@example.org.