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Mon 14 Apr 2008 04:00 AM

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Abu Dhabi and the three T's

TRI Hospitality Consulting operations manager John Podaras questions whether Abu Dhabi can sustain its growth by retaining the "creative class" through Talent, Tolerance and Technology.

TRI Hospitality Consulting operations manager John Podaras questions whether Abu Dhabi can sustain its growth by retaining the "creative class" through Talent, Tolerance and Technology.

According to a Fortune report, Abu Dhabi - sitting on one tenth of the world's total oil reserves - is the richest city on the planet. The report goes on to say that each of the city's 420,000 (estimated) citizens are worth about US$17 million each and have investments abroad that are roughly in the region of one trillion dollars.

The ADTA's planned increase in hotel rooms gives a strong indication of the growth being envisaged.

Whether these figures are accurate or not, they represent an impressive war chest and it is interesting to see how this emirate, which was once viewed as very conservative, especially as compared with its flamboyant neighbour, is intending to invest in its own future.

The clearest sign of the emirate's commitment to develop a sustainable growth strategy is the Plan Abu Dhabi 2030, released in September of last year, developed in response to demand for accurate planning amid the extensive development and growing population of the emirate.

The plan is based on development principles that reflect economic and environmental sustainability, and also incorporates plans for improved transportation and communication networks.

A total of $200 billion will be invested in various projects during the next five years with the government contributing up to 40% of the total investment.

Looking back at 2007, Abu Dhabi made major advances focusing on the continued effort to diversify and build a sustainable economy bolstered by foreign direct investment.

The capital's skyline is a testament to the new round of construction and real estate development taking off there. The Abu Dhabi Chamber of Commerce and Industry estimates the total value of these projects that are in the planning stages or already under construction to be around $330 billion, with the current surge in activity expected to continue for the foreseeable future.

The tourism industry is also registering stellar performance as figures released by the Abu Dhabi Tourism Authority (ADTA) for 2007 show an unprecedented increase of 16% in the number of visitors. As anyone looking for a hotel room at peak times will vouch, hotels had a bumper year with revenues for the same year up by 19% over 2006.

The ADTA's planned increase in hotel rooms, from the current 10,000 to 24,400 in 2015 gives a strong indication of the growth being envisaged and underscored by Abu Dhabi's commitment to invest nearly $140 billion in this sector.

Looking at the big picture however, just how are these initiatives going to ensure not only the sustainability of Abu Dhabi but also to secure its place as a global powerhouse?

A recent article in Germany's leading Sunday paper, the Frankfurter Allegmeine Sonnatagszeitung in conjunction with strategic consultants Roland Berger, postulated that the future of entire big cities and regions increasingly depends on their ability to attract the well educated, extremely sophisticated and very mobile members of the 'Creative Class'.

The concept of this group of people is based on the controversial work of US economist and urban planner Dr. Richard Florida who breaks the class into two broad sections:

Creative Professionals: "Knowledge Workers", which is expanded to include lawyers and physicians.

Super-Creative Core: This group is deemed to contain a range of occupations (e.g. architecture, education, computer programming).

A number of specific cities and regions (California's Silicon Valley, Seattle, India's Bangalore and Dublin, for example) have come to be identified with these economic trends and Florida associates these cities with the creative class.

Florida postulates that in order for a city to attract and retain the creative class, it must exhibit the "Three T's": Talent (have a highly skilled/talented population); Tolerance (have a diverse community, which has a "live and let live" attitude); and Technology (have the technological infrastructure necessary to fuel an entrepreneurial culture).

Abu Dhabi needs to be seen in the context of the abundant, though narrow, spectrum of petroleum resources and the nature and culture of the Middle East as a whole.

However the planned development does encompass some of these magnets, which will not only serve as a major attraction for transient visitors to the emirate but also help to build a core of cultural and social substance that will retain and encourage members of the creative class.

The government's focus on education, for example, is exemplified by the announcement of a partnership with New York University (NYU) for the establishment of a satellite campus in the emirate, the second foreign university to do so after the Paris-Sorbonne University Abu Dhabi was established in May 2006.

The move to foster international partnerships and improve the educational landscape of the emirate has been greatly assisted by the formation of the Abu Dhabi Education Council (ADEC), chaired by Sheikh Mohammed bin Zayed Al Nahyan in 2005. A number of other foreign business schools are reported to be seeking to enter the emirate to meet the growing demand for education.

Abu Dhabi has also declared its aim to become the region's cultural capital, looking towards media and entertainment to assist its path towards this goal.

Abu Dhabi hosted the first Middle East International Film Festival in October last year, hoping to become the launching point for an annual conference, the Film Financing Circle (FFC) which will concentrate on fostering the region's nascent film industry.

The Abu Dhabi Media Company's (ADMC) partnership with Warner Bros Entertainment and real estate developer Aldar will culminate in a theme park, hotel and multiplex cimenas as well as a $500 million film production fund and a $500 million videogame fund.

However the biggest statement in this area would have to be the Tourism Development and Investment Company's (TDIC) investment in Saadiyat Island. The TDIC has secured agreements with two of the world's foremost museums, to open a branch of the Louvre and the Guggenheim museum on the island.

Under the agreements, artworks from museums such as the Louvre in Paris, Georges Pompidou Centre, the Musee d'Orsay and Versailles and the Guggenheim will be displayed in the museums in Abu Dhabi. These developments will also include a national museum, a performing arts centre with four theatres and concert hall, a maritime museum and a conference centre.

It is intended that by the time these agreements have served their course, Abu Dhabi will have acquired its own collection to house in the new buildings.

Another example of a global player is the island of Singapore which for many decades was able to exploit its geographic position, becoming a global hub for businesses, services and transportation. Singapore has more recently repositioned itself as a nerve centre and switching node for staging regional and international business operations.

Its competitive assets will be an efficient and versatile information infrastructure and a work force equipped with the skills and expertise to operate, manage and get the most out of the infrastructure. In other words, ticking the boxes next to at least two of the "Three T's".

It looks as if Abu Dhabi is looking to emulate this ethos and follow Singapore in preference to, say, Las Vegas as a model for sustainable growth.

TRI has assisted and advised on hotel management company selections for numerous hotels on behalf of independent hotel owners and institutional owners across the MENA region.

TRI Hospitality Consulting is one of the world's leading management consultancies in the fields of hotels, tourism, leisure and real estate.

For further information: www.trimideast.com or +971 4 345 4241.

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