A country's economy must be diversified regularly, and new avenues for growing income must be explored. As a result, the country's Gross Domestic Product (GDP) would rise. Keeping this in mind, the government of the United Arab Emirates has taken steps to improve the state of the country's hospitality industry. This move would significantly reduce the country's reliance on the oil and gas sector while also providing the country with a new source of revenue.
The economy of the United Arab Emirates was based mostly on the oil and hydrocarbon sector. Still, due to the various efforts of the government, there has been a remarkable growth in the hospitality industry in the United Arab Emirates. The growth of the hospitality industry has been aided by the expansion of the travel and tourism industry.
The Global Hospitality Scenario
The hospitality industry has seen a major expansion around the world. The hospitality industry's activities include travel and tourism, as well as the hotel and lodging industries. The world has shrunk as a result of technological advancements and the growing influence of the internet.
The ease with which visitors can travel from place to place, the ease with which they can book tickets for trips and the growing impact of globalization have all contributed to an increase in the number of tourists who visit new places. There has also been a continuous decrease in travel costs and a gradual increase in air travel, increasing the number of people traveling abroad for business or pleasure.
The hospitality and travel and tourism industries are now widely regarded as the primary sectors for job creation and economic growth around the world. Many countries such as Brazil, India, South America, United Arab Emirates, and many more have eased the process of setting up a business in the country which has opened a gateway for both the travel and tourism industry as well as the hotel industry.
HOSPITALITY INDUSTRY IN GCC
The GCC hospitality industry has seen an increase in numbers as a result of the recent drop in oil prices and other geopolitical issues. Increased government spending, increased tourist attractions, and various government initiatives have all contributed to attracting millions of international visitors from all over the world.
The growth of the hotel segment in the GCC countries has been fuelled by the World Expo 2020 in Dubai and the FIFA World Cup 2022 in Qatar. There has also been an increase in the number of tourism destinations and lodging options in the GCC. To meet tourism demand, the number of hotel rooms in the Gulf Cooperation Council (GCC) has increased. Many more projects worth more than $200 billion are in the works, which will help meet the expected demand.
The MICE market (meetings, events, and incentive travel) is expected to expand in the GCC countries. This means that, in addition to spending on shopping and entertainment, the GCC country's economy will benefit from increased spending on business-related activities.
Future demand for better and more hotels has sparked a race for expansion in the luxury and mid-market hotel segments. The GCC governments' active participation in the construction of airports, hotels, and related infrastructure will aid in increasing passenger handling capacity. There are several other programs, such as Visa on Arrival and No-Cost Travel. Visa will play a critical role in ensuring that travelers have a seamless experience. The end customer will benefit from the changes and innovations in the hospitality and tourism industries because he will be able to make better and more informed travel decisions and have a better quality of experience.
The Current State of the Hospitality Industry in the United Arab Emirates
The government has looked into different sources of income to diversify the country's economy. Previously, the United Arab Emirates was regarded as a major oil producer. Nonetheless, thanks to the UAE government's numerous initiatives, the country now attracts a large number of tourists from all over the world. The hospitality industry is also expected to contribute more than 314 billion dirhams to the UAE's GDP by 2027.
The country's hospitality sector, along with the tourism industry, has developed itself as the sector that employs the most people. Increased work not only benefits the economy of the United Arab Emirates but also aids in the inflow of new funds.
The United Arab Emirates tourism industry is now centered in Dubai, and the country continues to develop new tourism projects. Tourists are flocking to the emirate in increasing numbers, with more than 20 million expected to visit by 2020.
The hospitality industry in Abu Dhabi, Sharjah, and other emirates has also grown significantly. Over 3 million tourists had visited Abu Dhabi as of October 2018. There are 166 hotels in the district, and more than 36 hotels are expected to open by 2020. The Ras Al Khaimah Tourism Development Authority (RAKTDA), RAK's tourism development agency, has set a goal of attracting at least three million visitors annually from around the world by 2025.
Reasons for the growth of the Hospitality sector
The hospitality industry in the United Arab Emirates is growing due to several factors. The following are the main reasons:
ACCESSIBILITY: One of the main reasons for the expanding hospitality industry in the United Arab Emirates is the country's strategic location. The United Arab Emirates is conveniently situated at the crossroads of Europe, Africa, and Asia. Only a four-hour flight separates the country from a third of the world's population. Many international and domestic airlines, including Etihad and Emirates, operate in the country. Dubai is also home to the world's busiest airport, Al Maktoum International Airport.
This country has become a primary logistical location because it is readily accessible from three continents. People can easily transport goods or raw materials from all over the world, making the United Arab Emirates an ideal location for doing business.
Increasing Disposable Income: All piece of information is now available to everyone in a matter of minutes, making the world a smaller place. This freedom of information, combined with the people's growing disposable income, has increased the number of visitors visiting the nation.
These visitors can come to the UAE to start a business, for religious and cultural reasons, recreation, or medical reasons. Every ambition can be realized in the United Arab Emirates.
The United Arab Emirates has steadily gained a reputation as a cultural hotspot. The architectural style of the United Arab Emirates' largest mosque, Sheikh Zayed Grand Mosque in Abu Dhabi, incorporates a variety of Islamic forms and draws a large number of visitors (nearly 6 million) during Ramadan.
The Al Fahidi Fort and the Dubai Museum provide insight into the country's history. Besides, Dubai's old souks and traditional markets provide a glimpse of the enchanted land. The "Museum of the Future" in Dubai was recently completed, and it will aid in the creation of new and innovative designs.
This, combined with the emirates of Ras Al Khaimah and Fujairah's rich cultural history, has made the United Arab Emirates a must-see destination for both worshippers and architectural enthusiasts. The Al Ain Oasis, located 145 kilometres east of Abu Dhabi, is one of the world's oldest inhabited cities and the Middle East's first UNESCO World Heritage Site.
Shopping and sports events: Shopping is a major source of revenue for the UAE. The country has numerous shopping malls, and the Dubai Shopping Festival allows all shoppers to purchase a wide range of goods at very low prices. This event has become the face of Dubai, especially for international shoppers.
The Mall of the Emirates is another important landmark in the country. Majid Al Futtaim designed and owns this mall, which includes an indoor ski resort, a movie theatre, and numerous dining and retail outlets.
The Mubadala World Tennis Championship and the Formula One Etihad Airways Abu Dhabi Grand Prix are among the sporting events held in the city. The Special Olympics were also held in the United Arab Emirates, and the country hosts several other world-renowned sporting events that attract a large number of visitors.
Entertainment and recreation: Tourists can enjoy a variety of recreational activities, such as camel riding, sky diving, and desert expeditions, thanks to the country's geographical location and topography. Sir Bani Yas Island, a wildlife reserve and home to many endangered species, is also located in the United Arab Emirates. The United Arab Emirates also has the longest zip line in the world and offers a world-class golfing experience in the Trump International Golf Club in Dubai.
In addition to adventure and recreation, the United Arab Emirates has many theme parks and resorts. Theme parks in the UAE include Legoland Dubai, Legoland Water Park in Dubai, Motion gate Dubai, IMG Worlds of Adventure, and others.
Health tourism: According to a 2016 industry report, Emirati healthcare will expand at a rate of 7% per year. The UAE was one of the top 20 medical tourism destinations in the world in 2018. Tourists can access 40,000 healthcare professionals and more than 4,000 medical facilities thanks to the country's world-class healthcare services.
In the United Arab Emirates, there is a separate free zone devoted to healthcare. The main goal of Dubai Healthcare City, which opened in 2002, is to provide high-quality medical services to people while also attracting visitors from all over the world.
Government Initiatives
The government of the United Arab Emirates emphasized the value of the hospitality industry in the economy and how it will aid in the country's continued development. The government of the United Arab Emirates has taken individual initiatives for tourism and hospitality, keeping in mind the importance of diversification of the economy. These are the initiatives:
Dubai Tourism Strategy
This was a detailed approach that was initiated by the Emirate of Dubai in the year 2013. The Dubai Tourism Strategy has set a goal of attracting a minimum of 20 million visitors annually. In line with this approach, the government will strive to host and promote a growing number of events, as well as create a plethora of new attractions for visitors from all over the world.
Sharjah Tourism Vision
The Sharjah Commerce and Tourism Development Authority (SCTDA) has created the Sharjah Tourism Vision 2021 in collaboration with the tourism industry. The tourism vision will help attract more than 10 million visitors from all over the world by the end of 2021.
Tourism Strategic Plan for Ajman
The Ajman Strategic Plan for Tourism has as its main goal the growth of tourism in the emirate. This strategic planning will place a greater emphasis on the formation of effective partnerships that will enable the development of new and innovative solutions. The strategic plan will aid in the development of Ajman as a top tourist destination for all types of visitors.
The hospitality industry in the United Arab Emirates is on the verge of exploding, thanks to the government's numerous initiatives to solidify and develop the tourism and hospitality sector. Many new tourist attractions, such as Abu Dhabi's Louvre museum, various theme parks, and resorts, and locations such as the Dubai frame, are attracting visitors from all over the world. Furthermore, the United Arab Emirates' connectivity with the rest of the world, as well as upcoming major global events, act as a catalyst for the growth of the UAE's hospitality industry.
Future of the Hospitality Industry
In the United Arab Emirates, there has been a substantial increase in theme parks, cultural attractions, and medical tourism, resulting in the construction and development of more space to accommodate the increased footfall. The United Arab Emirates has recognized that the growth of the hospitality industry will benefit the country's economy and has implemented some tourism incentives, including raising service standards, renovating old venues, and building new infrastructure.
The increase in tourism has increased the number of people staying in the country, which has helped the hospitality industry expand and evolve. There has been an increase in the number of hotels due to a rise in affordable accommodation and an increase in people's disposable income all over the world. Previously, owners preferred to invest in luxury hotels, but as competition in the hospitality industry has increased, they are now turning to lower-end hotels.
The arrival of a larger number of tourists is good news for the entire country's economy, as more visitors means more money entering the market. This increase in funding would aid in the country's growth and development, as well as the development of services and the improvement of infrastructure to attract more visitors.
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