Dubai’s tourism sector grew by 20% within the second quarter
Vacationers in Dubai Mall. The town goals to draw 40 million resort company by 2031. – KT file
A notable growth in Dubai and Saudi Arabia’s tourism-related sectors is boosting resilience within the Center East’s non-energy sector, regardless of a normal slowdown brought on by the power sector’s lower in oil manufacturing, economists and analysts say .
Dubai’s tourism sector noticed fast development within the second quarter, up 20 p.c from the primary quarter of 2023, with a report 8.6 million vacationers. The town goals to draw 40 million resort company by 2031. In 2022, Dubai obtained 14.36 million worldwide guests, in comparison with 7.28 million within the earlier yr, representing distinctive development that permits it to exceed international and regional tourism restoration ranges.
Saudi Arabia can also be witnessing substantial development within the sector, with a notable improve of 225 p.c because the first quarter of 2022, in keeping with the most recent Financial Perception report for the Center East, commissioned by ICAEW and compiled by Oxford Economics.
“Progress within the area’s non-energy sector is displaying vital resilience, primarily fueled by tourism-related sectors, with knowledge displaying double-digit development in transportation, warehousing, lodging and meals providers,” stated Scott Livermore , financial advisor to ICAEW. and chief economist and managing director at Oxford Economics.
By the tip of 2023, Dubai’s hospitality sector can have roughly 154,000 rooms in use, representing a big improve of 6.4 p.c from 2022, in keeping with a Knight Frank report. With an present provide of 207,200 resort rooms, the UAE has a further 24,500 rooms in numerous levels of improvement, additional strengthening its international management within the hospitality sector, the consultancy stated in a report.
STR knowledge exhibits that the Dubai market as an entire recorded a 0.8 p.c improve in RevPAR in comparison with July 2022, pushed by an occupancy fee of 6.8 p.c, however additional development was held again by a 5.6 p.c decline in ADR.
The ICAEW report exhibits that the area’s financial efficiency weakened within the second quarter because of the power sector’s lower in oil manufacturing. The tempo of GDP development within the Center East has subsequently been lowered by 0.4 share factors and is anticipated to sluggish to simply 1.7 p.c this yr. The revised financial outlook displays the Center East’s weakened efficiency within the second quarter, as a consequence of lowered oil manufacturing within the GCC international locations. Projections for development within the GCC this yr have been scaled again by 0.5 share factors to 1.4 p.c.
“Nonetheless, there are encouraging indicators within the non-oil sector and home demand. Corporations report development of their buyer base and employment. Nonetheless, this constructive efficiency might face challenges because of the looming influence of excessive rates of interest on consumption and personal funding,” the report stated.
“Regardless of the slowdown, optimism prevails as non-oil actions within the area stay sturdy,” Livermore stated.
Wanting forward, the deliberate inclusion of the UAE and Saudi Arabia into the Brics group subsequent yr is anticipated to create new alternatives for elevated commerce and funding. This improvement can even assist scale back their dependence on the US greenback, providing a constructive outlook for the long run, stated Hanadi Khalife, Head of Center East, ICAEW. “This quarter was difficult for the area and marked weaker development than initially forecast,” she added.
Livermore stated latest power cuts have had a pronounced influence on the financial outlook for this quarter. “In consequence, 2023 is forecast to be the GCC’s weakest yr for the power sector since 2017, excluding the distinctive circumstances of 2020. The non-energy sector, then again, continues to thrive; we anticipate 30 million worldwide vacationers to go to Saudi Arabia subsequent yr, whereas Qatar will obtain 3.17 million guests. The surge within the tourism sector continues to strengthen the GCC’s diversification efforts.”