Arabian Business Podcast: What next for the Gulf's tourism industry?

As the Arabian Travel Market wrapped up for another year, we asked three experts where the industry is heading, and whether the region can deliver on its ambitious growth targets
By Jeremy Lawrence
Fri 04 May 2018 12:21 AM

As the Arabian Travel Market wrapped up for another year, we asked three experts where the industry is heading, and whether the region can deliver on its ambitious growth targets. 

The panel:

  • Aaron McGrath, General manager, Six Senses Zighy Bay
  • Mohamed Saeed, General manager, Middle East Market, Royal Caribbean Arabia, Celebrity Cruises and Azamara Cruises
  • Ahmed Soliman, CEO of Travel Connections Arabia

(l-r): Aaron McGrath, Mohamed Saeed and Ahmed Soliman

After ATM, what are your thoughts on the sector?

Ahmed Soliman: We’ve noticed a number of key changes with the way Dubai is marketing itself to attract visitors. There was the recent blockchain announcement to promote cashless transactions and make it easier for people to book holidays. [The Dubai Department of Tourism and Commerce Marketing (DTCM) last month launched Tourism 2.0, a blockchain-enabled marketplace that connects potential buyers directly to hotels and tour operators.] The DTCM also wants to cater to the more budget conscious traveller, be it Zabeel House by Jumeirah or Emaar’s Rove Hotels, which both provide a great experience but within a budget. And it has also run social media campaigns that show how visitors can experience Dubai within a budget.

Mohamed Saeed: We’re very confident about what we saw; we definitely see growth up to 2020. And given the world is going to be here for the 10 months during Expo 2020 that will definitely also help. We also believe that people are going to be almost living here for that period, as well as families, friends and curious travellers. So we’re definitely going to see a boost of population coming into the UAE and we hope that will sustain the numbers for many years after as well. Overall, Dubai is ready – as seen by the rapid growth that is happening now.

Mohamed, how many tourists are cruises now bringing in to the UAE?

MS: There are around five cruise lines operating in the region and the UAE has the GGC’s only home port destinations for cruise ships, Port Khalifa in Abu Dhabi and Port Rashid here in Dubai. The closest alternative is Aqaba in Jordan and that is just for refuelling. The UAE started that momentum much earlier than anybody else and has reached almost a million passengers – 750,000 to Dubai and almost 250,000 in Abu Dhabi. That number keeps growing as bigger ships dock here that can carry 2,500 passengers.

Saudi Arabia’s Vision 2030 includes big plans for its non-religious tourism. Is that something that you are seriously looking at already?

MS: The idea is to create the Red Sea as a destination. It’s a hidden gem and no cruises anchor in that region, as the ships currently cut through from the Suez Canal to stop in the Arabian Gulf. So the Red Sea is definitely of interest to Saudi Arabia, Egypt and Jordan. And in fact, Saudi Arabia and Jordan signed up a fund of almost $2bn last month to work on the infrastructure there. It’s a long way off because the infrastructure requirements of building the ports then moving on to immigration, security, logistics and then creating the destination are massive.

Aaron, there has been a squeeze on rates in the luxury sector. Have you felt this at Zighy Bay?

Aaron McGrath: The luxury travel market in Dubai has had some challenges both with occupancy and also with rates. Luckily for Six Senses Zighy Bay that has not been the case. In the last 12 months we’ve seen a growth in both occupancy and also in our room rates. And that’s a result of having an incredibly unique, experiential-based product offering. Our property lends itself very well to a very Omani experience and we’ve been able to demonstrate that there is a strong demand for this type of product.

Are there enough hotels in Dubai that provide a unique experience?

AM: A lot of city hotels are starting to find it difficult to differentiate themselves. That’s made worse by the growth of easy-to-access rate aggregating programs that give the customer a smorgasbord of hotels to choose from, and it becomes difficult to distinguish between them on anything other than rate.

The overall challenge now is regional competition. Vision 2030  hopes to promote Saudis travelling within their own nation”

How do you see the marketing activities of the industry evolving?

AS: It depends on the demographic they’re targeting. Social media and influencers are obviously important for targeting the more dynamic, younger travellers and positioning your product. From a property perspective, it really depends on the brand. But for the younger generation technology is going to be the real focus in targeting that kind of traveller.

Are these social media campaigns actually working?

AS: The introduction of the Rove brand in Dubai has done really well. It was a niche that needed to be tackled and I think the way that they marketed the property was not traditional; it was all online campaign management and a lot of marketing activations. They used of partnerships and positioned the product alongside likeminded brands, push-promoting the product and promoting themselves as a lower cost alternative but with a key service element.

Sustainability and health-based tourism were talked about a lot this year at ATM. But does this interest go beyond buzzwords?

AM: Both of those segments are incredibly important areas of hospitality evolution. Health tourism is an area that a lot of businesses are looking to develop. We have been heavily involved in health tourism for a couple of decades and we keep developing our wellness offerings. For example, we’ve just introduced a new sleep programme that integrates with our other programmes to give guests a more holistic approach to wellbeing. In today’s incredibly fast-paced technology environment, the opportunity for guests to disconnect from the pressures of everyday life is increasingly sought after.

Dubai had 15.8 million visitors last year and is targeting 20 million tourists by 2020. Are we on track to get to that figure?

AS: The city is moving in the right direction. Dubai is growing at a rapid pace with destinations such as La Mer, Bluewaters, the theme parks and many other destinations, along with different dining experiences and lower cost accommodation. All this makes it more and more likely that guests will return. So it’s not about attracting 20 million new arrivals by 2020; you could easily get there if the 15.8 million visitors just come again. So where Dubai has excelled is by becoming an attraction that can be visited on multiple occasions in one single year. And from a hotel perspective, the cost of acquisition of a new guest is much larger than the cost of retention.

It’s not about attracting 20 million new arrivals by 2020; you could easily get there if the 15.8 million visitors just come again”

Is there anything that needs to be done to take tourism to the next level?

MS: The government has been excellent in helping the cruise industry. We have our own special multiple exit and re-entry cruise visa for the UAE and almost no restrictions on nationalities. The government has really taken the responsibility for security and screening global inbound passengers. We have been prioritised which has been a great blessing for our industry.

AS: The overall challenge now is regional competition. Egypt has become more stable. It has a lot of attractions and is very cost effective. Turkey also welcomes Middle Easterners with open arms. The more stable Lebanon becomes, the more competition it offers. And then you have Saudi’s Vision 2030 which hopes to promote Saudis travelling within their own nation. So we’re talking about 1.6 million people who at present visit Dubai.

Are there any untapped markets waiting to be exploited?

AS: Dubai has become very welcoming and has promoted itself across the world. If you say “Dubai” most people will say, “Wow, I can’t wait to visit”. In terms of newer markets, just consider how the malls here all celebrate Chinese New Year and other key events in their calendar. All this helps create the right ambience.

Aaron, do you think there is enough business to sustain the luxury end of the market?

AM: I think there’s certainly going to be business going around given the aggressive growth targets. The key here is going to be able to separate yourself from the competition, and that’s going to be where the battles are won and lost on the luxury occupancy and rates front. Innovation is the key to staying ahead of the curve, and being able to read what the market is looking for. If you’re trying to catch up then you’ve already been left behind.

To hear the podcast of this interview visit: soundcloud/arabianbusiness

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Last Updated: Sun 06 May 2018 05:03 PM GST

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