Dubai’s ambition to emerge as the best tourist city in the region has been quite often overlooked.
Whether wholesale or retail, the expats and tourists used to enjoy Dubai as a destination to shop for the best quality products and collections for the best deals. Visitors from the Middle East, Europe, Iran and Indian Sub-Continent that used to flock Dubai for a shopping spree had gifted the status has a shopping and transit destination.
But since the advent of this millennium, with rising rents and increasing inflation, it seems this has all just been a myth now for the incoming new visitors with expensive products and hardly any options. It is such a shame, even the shopping festivals have gotten boring and expensive. Let us draw what should happen in reality to save the long term economics in Dubai tourism.
Assume the rents of residential, offices, shops and warehouses are cheap and is at an average and affordable rates likely to the year 2000-2003. The government service fees are also charged at an affordable rates and simplified minimalist procedures to keep costs down. Country builds an amazing transportation infrastructure with various transport modes, trains, buses with several parallel roads and freeways. Visit visas are also reversed to previous attractive rates.
With decreased expenses, these savings are passed on to buyers by selling products and services for an affordable prices. The hotel rates are comparable with cities like Kuala Lumpur (5 star rooms for less than AED 700 peak time). Bring dinning and grocery prices down and so are other expenditures. This would make it attractive and give a reason for tourists to visit Dubai - shopping. Everything else will revolve around it. Now, imagine a family that may visit Dubai for 10 days to holiday and do a bulk shopping. Let us imagine where they could spend their money.
Various restaurants will cash them day, lunch and dinner. The hotels they stay will have occupancy. As they roam around the city - taxis, trains, busses, ferries have been used with RTA profiting here as well. They visit glitzy shopping malls to buy brands of the world for an amazing cheap price tag or may walk at old Dubai streets to pick up traditional bargains. Retailers have new profits. While they are shopping, they may have their kids play at the mall’s entertainment centres such as Fun City, Magic Planet, Sega Republic, Restless Planet or Kidzania. They will buy souvenirs or make certain impulsive purchases. Don’t forget the snacks and drinks they will grab at intervals.
The family will visit several attractions such as Lost Chambers at Atlantis the Palm Jumeirah, Dolphin Show at Creekside Park or Dubai Mall Aquarium. Wait, assume they have slashed their prices by half to attract more visitors else the family may opt only for one of it. They may spend an evening at the desert safari. They may spend another evening on activities like skiing, skydiving, water sports and horse riding. Everyone has profited here.
Now let us imagine all Dubailand projects are up and running 100% with affordable ticket prices for unlimited rides for the day. They would probably decide to spend whole day at Dreamworks Theme Park for AED 50 per person for unlimited rides. They may decide to spend another day at SeaWorld Water park for entrance of AED 50 per head. Now apart from this trip, if they return back to the city again, they may visit other several parks. Now these theme parks are cashing on the tourists as well. Attractive prices means, even local residents would go several times in a year.
The art galleries, museums, heritage locations and other attractions will also have more footfalls. With the launch of budget airline ‘FlyDubai’, cheap air fares, cheap hotel rates and cheap theme park entrances with unlimited rides along with visa on arrival and shopping bargains could boost weekend visitors from the GCC region. This will keep the two Dubai airports busy as well.
Imagine several alike families and visitors as such who would be spending money at several locations. Dubai has a favourable weather from October to April to attract enough visitors. But what the city needs to offer is more attractions for less price. Visitors and residents currently shy away from several Dubai attractions due to giant pricing structure. How many visitors currently experience Ski Dubai or Lost Chambers? The current population of UAE is not enough to sustain all the shopping malls, theme parks and other attractions. Definitely there needs to have flock of tourists.
The possibilities by attracting more middle income groups will initiate money flowing in the market at various sectors. Remember, as all these sectors start benefiting, they will pump in money into marketing whereby several media and creative related industries will profit. As more demand increases, this will create more jobs and opportunities in various sectors in the country as a whole. Every industry and sectors are dependent on other sectors.
There are only so many possibilities and opportunities when we start bringing the price down at affordable, competitive and attractive levels. Dubai will profit from revenues and numbers. Countries in the Far East especially Malaysia have been successful by making itself an affordable quality family destination.
This region does not have one and Dubai has every chance to create it. Will the Government built on to this path to success or would it still compare itself to London and New York and continue to fail in long term. Or would we sit and wait for somebody else to do it in the region and realise its too late, so to regret and lose the chance? Let us stop dreaming, stop being greedy, rather start strategizing to bring price levels down to attract more business.
Let us force the rents and services charges down so the savings can be passed on to end buyers. This is a great opportunity to place a permanent law on rent caps to below 5% every 3 years. This will make sure prices are stabilised even during the next upturn if any.