The growth of Dubai’s tourism industry in the past few years has made the emirate a leading leisure destination in the world. Impressive as the growth may be, however, the government is keen on achieving greater heights by planning to play host to 15 million tourists by 2015.
In an interview with Emirates Business, Khalid A bin Sulayem (pictured above), Director General of the Dubai Department of Tourism and Commerce Marketing, spoke about future plans and strategies to deal with competition from other regional destinations.
How did Dubai’s tourist sector perform in 2007?
It was good in general – the number of visitors and hotel customers rose to seven million and the occupancy rate went beyond 90 per cent – the highest in the world. Demand for investment in tourism is still high. The department last year issued licences to 17 hotels and 34 hotel apartment projects. This is a good indicator the sector and its activities are growing and that it is still an attractive sector to invest in.
What about hotel revenues?
Hotel revenues witnessed strong growth, netting Dh11.6 billion in the first 10 months of the year. In 2006 revenues were Dh8.7bn.
What is the significance of tourism in the UAE’s economy?
Tourism is one of the most important economic sectors and contributes greatly to the Gross Domestic Product (GDP). Its direct contribution amounts to 20 per cent of GDP, while the non-direct reaches 30 per cent.
Dubai’s strategic plan calls for a total of 15 million tourists by 2015. How will you achieve this target?
Achieving the target will rely on a number of factors. First is the infrastructure such as roads, airports and ports – and this is available as Dubai is undergoing large-scale development. The second element is that airline routes to Dubai from major global markets are available through Emirates airline and the carrier’s marketing plans and route network are backed strategically. The third element is investment in hotels and resorts. And fourth is marketing, a prerequisite for success of any tourist strategy. This is the role of the department. We have marketing and promotion plans to suit all markets. The department always works to expand existing markets and open new ones through promotion and taking part in international exhibitions and conferences.
What is your marketing mechanism?
First we study markets that offer big opportunities, provided that airline routes are available. After that we contact tourist companies, travel agencies and the media. Later we visit the market to talk to the people concerned. However, this strategy differs from one market to another.
Which are Dubai’s major markets?
Europe is still the largest – especially Britain, Germany, France and Italy. Then comes the Middle East, represented mainly by the Saudi market.
And which are the new markets?
The United States, Brazil and China. We are currently thinking of opening offices in these countries.
How many visitors came from the United States last year?
The total reached 270,000 compared to 250,000 in the previous year, and we expect the number of flights from the United States to rise.
Are Dubai’s infrastructure and hotels capable of coping with 15 million tourists?
Once the ongoing projects currently being built are complete the hotels will be able to accommodate this number. However, any delay in these projects will hit tourism.
What about the number of rooms?
This will increase from today’s total of 50,000 to 124,000 by 2015.
What is the breakdown of the current figure for the number of rooms?
There are 32,000 rooms in hotels and 18,000 in hotel apartment blocks.
Competition is tough in the region. Has Dubai been affected by the emergence of new destinations?
I cannot deny there is competition but this has had a positive effect on Dubai – the emirate still occupies a leading position. Competition has prompted us to improve services.
But tourist agencies the world over see Dubai as a costly destination compared to new alternatives.
It is true that Dubai is now more expensive but this is the result of world factors related to currencies and the international economy. But let us not forget that Dubai also offers high-value services.
Do you intervene in the room pricing mechanism?
We never intervene when there is growth. However, if we see that hotel occupancy is down we intervene by offering programmes and offers.
A number of hotel managers want to see entertainment activities other than the sea and desert safaris, such as theatres and heritage events.
We have museums and most new projects have theatres and folklore shows.
Why is there no direct tourist investment by the government?
The government has invested in tourism through offering land and facilities. We back rather than compete with the private sector.
You recently said you are about to reconsider the current hotel classification law in the country.
Yes, the department is adding the final touches to a draft law.
What will be the difference between the old and new law?
The new one will cover all hotels and resorts and will set new classification criteria aimed at upgrading the level of services and hotels in Dubai. It is due to be issued by Dubai Government soon and will be enforced during the first quarter of 2008.
Dubai has become known for taking its experience to the world thorough ports and free zones. Are you thinking of offering your expertise to other countries?
We are thinking about this seriously, given our experience in running cruise terminals. Recently we have started negotiations to run a terminal in a neighbouring territory. Our aim is to integrate with terminals – marine tourism needs co-operation with others to achieve mutual benefit.
What is your message to investors?
I ask them to offer what makes them distinguished in the region, and I ask them to feel reassured as the sector is growing and the government is backing it up completely.