Dubai rolls out red carpet to new tourist base

Dubai is seeing a bigger tourist inflow from tier 2 and 3 cities from China and the Subcontinent, which, in turn, is fuelling demand for more affordable hotels, according to industry analysts.

According to Richard Stolz, head of corporate development, grmc Advisory Services, Dubai is witnessing more tourist inflow from tier 2 and 3 cities in China, India and other countries and their preference is for mid-tier hotels. Their budgets are not as high as those coming from tier 1 cities and staying in luxury hotels.

Since the number of tourists is on the rise, spending is also expected to remain steady.

Laurent A. Voivenel, SVP, operations and development for Middle East, Africa and India for Swiss-Belhotel International, says India and China are not only very significant source markets for the UAE, especially Dubai - ranking first and fourth respectively, but also the emirate's fastest growing demand-generating nations.

"In H1 2018, we have already seen an increase of nine per cent of visitors from China and three per cent from India to the destination compared to the same period last year. The number of overnight Chinese visitors has increased by 119 per cent since 2014 while an increase of 41.4 per cent was recorded from 2016 to 2017," says Voivenel.

He said visa on arrival for Chinese nationals, increase in air capacity by budget carriers from China and India, increased business opportunities, landmark partnerships and strategic marketing tie-ups and promotional activities by Dubai's Department of Tourism and Commerce Marketing have all resulted in this growth.

By 2021, the average percentage of Indian visitors to the UAE is expected to be 10.8 per cent compared to 9.8 per cent in 2016.

"In both countries, this outbound travel growth is driven by tier 2 and 3 middle-income households and millennial travellers rather than higher-income groups. Both Chinese and Indian tourists prefer group and family travel, especially from second, third and fourth-tier cities and regions," adds Voivenel.

Most tourists are coming from China's tier 2 and 3 cities such as Yinchuan, Zhengzhou, Hangzhou, Chengdu, Nanging, Tianjin, Daqing, Weifang, Changzhou, Zibo, Zhuzhou and others. From India, more tourists are flocking to this region from South, North and Western cities such as Kochi, Ahmedabad, Chandigarh and Mangalore, etc.

The growing middle class and cheaper flight options are transforming the outbound travel landscape for these nations. They prefer more affordable hotels and alternative accommodation with lifestyle experiences as compared to luxury and indulgence. This requires a new approach to hotel concepts, layouts and facilities.

According to STR data, 98 properties with 29,599 rooms are in the pipeline, adding 25,470 keys between 2018 and 2020 in Dubai and Abu Dhabi. This includes properties in the midscale, upper midscale, upscale and luxury segment, which would be most akin to 3, 4 and 5-star properties.

Alex Anstett, marketing content executive, STR, says that for Dubai, mid-tier properties have been coming online in recent years compared to a previous period when the market was more represented by the luxury and upper-tier hotels.

"This change in the market landscape is making it more affordable for travellers on different budgets, but there is a high amount of supply coming across the board. Despite this high rate of supply growth, all Dubai hotel classes have continued to see demand growth, which is likely being driven by the market's continued development of new attractions as well as the more affordable price spectrum," Anstett adds.

Emiel Van Dijk, general manager of Swissotel Al Ghurair, says the tourism sector is expected to generate demand in the run-up to Expo 2020. Dubai needs to add 40,000 hotel rooms to its existing inventory of 107,000 guest rooms and hotel apartments.

"The current situation is dominated by a lot of new hotel construction and supply that will cater to the future demand," says Van Dijk.

He adds that the UAE tourism industry is healthy and vibrant. "It is still evolving, although the hotel industry in Dubai has matured a lot. Some markets, such as Ajman, Fujairah and Umm Al Quwain are developing, while the tourism sector in Abu Dhabi, Dubai, Ras Al Khaimah and Sharjah have matured quite a lot," he adds.

The region's travel segment will benefit from the wider tourism objectives and vision of the government, such as Dubai's Tourism Vision 2020, an ambitious roadmap to double annual visitors from 10 million in 2010 to 20 million in 2020.

Average length of stay rises
Van Dijk believes these initiatives will result in an increase in demand from the family travel sector as new theme parks and family attractions open in the region, in addition to an increase in high-end business and Meetings, Incentives, Conference and Exhibitions (MICE) bookings.

"While the country as a whole has a lot to offer for a tourist for at least a week's stay, it could add a lot more attractions, especially in the mountainous regions as well as sustainable tourism projects and development of more beach properties," he adds.

He points out that the average length of stay has increased in the past few years.

"The fastest growing group are those staying between six to eight nights. Dubai has seen an increase in long stays by 28 per cent than the year before. These findings show significant progress in the UAE's attractiveness as a destination," he concludes.

Khaleej Times Contribution Time: 29-Aug-2018 03:46 (GMT)
Khaleej Times Last Update Time: 29-Aug-2018 03:46 (GMT)