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Tue 24 Feb 2009 04:00 AM

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Travel bug

Following the success of Dubai Airport's third terminal, a review of Middle East tourism reveals good news for the region's aviation sector.

Following the success of Dubai Airport's third terminal, a review of Middle East tourism reveals good news for the region's aviation sector.

"It is a key link in the chain," states Rob O'Hanlon, tourism, hotel and leisure partner for Deloitte Middle East.

"Every time there is a change in the world - and I reflect back on things like 9/11 and the economic change that we have seen of late - we are always surprised at the resilience of hospitality, tourism and leisure and therefore the factors that feed that chain, including the aviation infrastructure."

In terms of what is working well in the Middle East we are seeing more coordination between the government and private sector in making critical infrastructure investment.

O'Hanlon refers to the figures that have been revealed in Deloitte's latest report, Hospitality Vision - the Middle East Performance Review.

A record number of tourists - almost 900 million - crossed international borders last year, with the Middle East region putting in a particularly strong performance.

Around five million more people visited the Middle East in 2007 than the year before, equivalent to a 13% increase, higher than any other region in the world - and the aviation industry is playing a huge part in the success story.

"In terms of what is working well in the Middle East, we are seeing more coordination between the government and private sector in making critical infrastructure investment," O'Hanlon explains.

"There is huge spending around airports and general infrastructure coming from the government and we are seeing spending from the private sector around components such as hotels, low cost carriers and most importantly around attractions. At the end of the day you have to continue to develop the wow factor and you have to remind people that you have something to offer."

Studies do reveal, however, that it is not always good news. Despite Dubai Airports tackling its capacity problems head on, some parts of the region are struggling to keep up with demand. "We recently completed an analysis of Oman and the tourism market," O'Hanlon says.

"This caused us to remember that there will always be imbalances between demand and supply and this can be around airport capacity. The key question is, are we seeing government and the private sector working together to address this?"

Oman Airports has begun the first phase of expansion and modernisation at Muscat International Airport, which will boost capacity to 12 million passengers per year, but this phase is not expected to be complete until 2011 and in the meantime Oman is becoming an ever more popular tourist destination.

"We are seeing the fundamentals being put in place in terms of the region having a vision and now the infrastructure needs to be put in place to service that vision," O'Hanlon explains.

"In Oman, on a smaller scale than that of Dubai of course, airport expansion is taking place and the national carrier has moved onto long-haul services. They understand the attraction to passengers of being able to fly direct to their destination and there is investment in road infrastructure. When you break it down region by region and by sector you can see the building blocks being put in place."The Middle East's success is strongly reflected in the opening of Dubai Terminal 3 and the airport company's ongoing projects. O'Hanlon sees them as crucial to the region's tourism boom.

"The expansion of Dubai airport is very important in terms of facilitating the next stage of growth and it is very encouraging to see the new airport in Jebel Ali firmly on the drawing board and moving forward. This can only be described as vision."

It is not just bricks and mortar that is contributing to the development in the region. Deloitte cites training and staff skills as another area that can set the Middle East apart from other travel destinations.

Our experiences are influenced by the individuals we meet whilst travelling around the airport. This is where the region has a fantastic opportunity to differentiate itself.

"We have all experienced Dubai airport and on reflection our experiences will be influenced by the individuals we dealt with whilst travelling around the airport," O'Hanlon explains.

"This continues to be an area where the Middle East has a fantastic opportunity to differentiate itself from the rest of the world."

High fuel prices and reports of airlines cutting international flights and capacity numbers will not, O'Hanlon believes, impact negatively in the long-term, on tourism figures.

"The Middle East has a resilience which identifies it from the rest of the world, both in tourism and business travel. The Middle East is creating fantastic attractions and infrastructure. There is still a long way to go to get these bedded down, but we have a huge developing economy and spending power, and it is inevitable that we will see more travel coming out of places such as India. The Middle East has easy access for India, and the capacity to deal with numbers, so it is a no-brainer."

Regional aviation decision-makers are also taking a long-term view beyond the current economic changes and, unlike other airlines, are not cutting back on aircraft orders. O'Hanlon sees budget airlines, in particular, playing a critical role in the industry.

"They [low-cost carriers] allow a large percentage of the population to travel and any airport knows that having low-cost carriers increases passenger numbers passing through. The number of low-cost carriers is increasing. Air Arabia is a prime example; the service is simple but not low quality and they are widening their net and attraction to individuals."

As Middle East airports continue to invest in expansion, O'Hanlon believes that it demonstrates an understanding of where the potential new markets are.

"We get our feedback from CEOs of companies who operate throughout the sector. They live and breathe the realities and we continue to be surprised by the resilience of travel."

New event

Dubai's Department of Tourism and Commerce Marketing (DTCM) has unveiled plans to stage the region's first destination marketing summit.

The Middle East Tourism Marketing Summit 2009 (METMS: 2009) will be a one-and-a-half day event, staged in April or May this year, organised by Dubai-based tourism communications agency Fusion Marketing Management and supported by US-based international advertising and marketing firm, MMG Worldwide.

The event is intended to shape the direction of the region's travel, tourism and leisure industry by providing a platform for debate between the industry's biggest players on how best to market its assets to the world.

METMS: 2009 will be an invitation-only event that aims to attract around 100 top-level executives from a wide range of categories including destinations, airlines, hotels and travel suppliers as well as leisure and retail managers.

The target audience will be the region's CEOs, COOs, VPs and directors of marketing and finance including government developers, airline and transport officials and travel industry management.

A programme of events is yet to be revealed, but is expected to include debates, presentations from keynote speakers and workshops. Fusion Marketing is currently asking industry executives to lodge their interest in attending the event.

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