Expo 2020 Dubai is driving growth in the tourism sector. How can your company maximise the opportunities this will provide?
If you’re thinking of expanding your business into the UAE to benefit from the many opportunities Expo 2020 Dubai will bring, you may be interested to know that the tourism and hospitality sectors are set to receive a boost as a result of Expo 2020 Dubai.
In this article, Acorn Strategy discusses the expanding tourism industry in the UAE and how this will be supported by Expo 2020 Dubai. The article highlights how Expo 2020 Dubai will have a positive impact on the UAE tourism market and ultimately on your business in the Middle East.
The Benefits of Tourism to the UAE Economy
This year’s Arabian Travel Market focused on the benefits Expo 2020 Dubai would bring to travel, tourism and MICE companies looking to attract tourists to the region. With 25 million visitors expected to attend Expo 2020 Dubai, 70% of whom are from outside the Middle East, there are opportunities to build revenue streams by offering value-added packages. With world-class architecture, immersive storytelling, live shows and performances and next-generation innovation, Expo 2020 Dubai is anticipated to deliver an exceptional visitor experience.
As Expo 2020 Dubai approaches, the macroeconomic indicators show steady, healthy growth of the UAE economy. The current forecasted GDP growth rate for 2018 is 2%, which is lower than the long-term growth rate for developing economies but is expected to pick up to 3% in the next 4 years due to the impact of growing investment and tourism generated by Expo 2020 Dubai. Currently the UAE ranks 13th globally in terms of attracting foreign direct investment, which is expected to improve as we approach 2020.
The hospitality sector in the UAE is already accommodating a growing inflow of tourists. According to the 2017 annual macroeconomic report by the UAE Ministry of Economy, entertainment, accommodation and real estate activities grew by around 7%, demonstrating that the sector is growing. Therefore, with UAE Ministry of Economy’s stated objectives of economic diversification, it is expected that tourism and leisure businesses will be growing consistently.
Another industry that benefits from the expansion of the tourism industry in the UAE is the healthcare industry. The UAE is the world’s fastest growing medical tourism hub, attracting over $23 billion in expenditure, which is expected to grow by 12.7% every year starting from 2015, increasing by up to $5 billion of expenditure per annum by 2021 , as the industry grows to accommodate an aging population.
“Ranked 1st within the GCC region, UAE’s economy is the 10th freest economy in the world“
An Economic Overview of the UAE
Ranked 1st within the GCC region, the UAE’s economy is the 10th freest economy in the world. It has strong and a well-functioning legal system. It is the most diversified of the oil-based economies within the GCC region, with only 30% of the GDP comprised of oil revenue. This is expected to further decrease that number to 20% by 2021 thanks to a continued drive towards diversification.
There has also been a focus on driving change to employment regulations to ensure that they are flexible enough to attract and retain a highly-skilled workforce. Coupled with new visa regulations, the UAE is well-positioned to attract and retain talented workers.
The UAE’s strong resence in the region presents a great opportunity for new businesses to enter the market, as there is likely to be less competition than in a more fully developed economy.
Expansion of the UAE’s Tourism Sector
The UAE’s tourism sector is expanding by more than 6% a year, so it is fair to expect that the hospitality sector will grow accordingly. The hospitality business categories have grown by 1% overall, while the supply of available rooms has grown by 4%. India, KSA, UK, Russia and China figure as the main source markets for the tourism industry, with the number of Russian tourists growing by over 100% in a year-long timeframe 2017 to 2018 . Overall, Oxford Economics predicts a 59% growth rate of all overnight hotel stays by 2026.
The growing tourism and hospitality industry in the UAE presents great opportunities that can benefit your company, thanks in part to the boost provided by Expo 2020 Dubai.
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For more information on how to successfully expand your business into the UAE, reach out to us! hello@acornstrategy.com