Hospitality Sector and Reasons for its Growth in the UAE

by Zaara 29, Dec 2021

Hospitality Sector and Reasons for its Growth in the UAE

The government initiated the hospitality industry’s development in the UAE a few decades ago by building many new and sophisticated hotel complexes. Now, the nation can boast of one of the world's most adequate hospitality sectors.

Every year, more and more foreign and local hotel chains, resorts, etc., are built that offer a higher quality of service. In selecting a location for international and regional events such as conferences, workshops, festivals, etc., this hospitality sector plays a significant role. Dubai's hospitality sector is considered one of the fastest-growing industries in the UAE and accounts for almost 4.8 percent of its GDP.

Current Hospitality Scenario in the UAE

The hospitality sector continues to be positive as hotel revenue rose nearly 73 per cent to Dh 1.8 billion ($490 million) in Q4 of 2018 from Dh 1.08 billion during the last quarter. According to the Dubai Ministry of Tourism and Culture, the number of hotel rooms in Dubai, and their occupancy rates have increased. The period of stay again rose from 2.3 nights to 2.7 nights instead of the last quarter.

This rise was attributed to an increase in the hotel industry’s investment and an increase in the number of entrepreneurs and business people entering the market. In attracting visitors in large numbers, celebrating the new year and celebrating the numerous national and international events played a significant role. The opening of prestigious art museums, such as the Dubai Louvre and the Guggenheim Museum, and the recent beginning of Warner Bros. The world of Dubai is also why visitors are drawn to Dubai to spend their Dubai holidays. According to a recent report by the Department of Tourism and Culture, most tourists in Dubai are from India and China.

Reasons for the Growth of the Hospitality Sector in the UAE

In terms of development in the hospitality sector, the Middle East, specifically Dubai and Abu Dhabi, are regarded as the GCC's leading cities. They are growing in terms of tourism and infrastructure and public and private sector jobs and industry. In the hospitality sector, numerous opportunities enable you to profit from starting a business in the UAE, such as:

1. Rise in Tourism

There are many natural islands, beautiful beaches, different landscapes etc. that attract a lot of visitors. The rise in the number of foreign hotel and resort chains has also contributed to the tourism industry’s growth. Dubai has become an important centre for medical tourism due to developments in technology.

2. Multi-Cultural Climate

In Dubai, individuals from all walks of life live together in peace. There are also visitors from around the world who are present, making it a very accessible and multicultural city.

3.Strategic Place

The capital city of the UAE is Dubai, situated on a small island. It is linked via three multi-lane motorway bridges to the mainland. The airways, land and sea make it readily available. Driving from Dubai to Dubai takes less than 2 hours and is known as the bridge between the east and the west because it is situated in a very strategic location. Since it is the country's capital, it is home to Dubai’s Emiri Family and the President of the UAE and is one of the most powerful countries in the UAE.

4. Security

Dubai is considered one of the safest cities globally and has surpassed cities such as Vienna and Tokyo to be voted the safest city globally. The town has a strict customs system that all visitors have to go through. There is a range of security checks and inspection systems at Dubai International Airport to improve the city's security.

5. Different Malls, Festivals and Activities

There is a hot desert climate in Dubai, that's why much of the time is spent in malls and conference centres indoors. Not only are malls and conventions here restricted to shopping and serving every purpose, such as meeting friends, sheltering from the sun, etc. In addition to involving the local community, the different activities draw a lot of interest from international countries.

6.The Government's Role

The Dubai Tourism Authority has opened many foreign offices in the United Kingdom, Germany, and France to promote and market the destination and brand, with plans to open several more in the next few years. The Dubai Industrial Plan 2030 will also significantly impact the city of Dubai's tourism and hospitality industry.

The above reasons are the key reasons that make Dubai a fantastic tourist destination and a haven for starting a hospitality company. The emphasis on tourism and the Dubai Industrial Strategy in 2030 would positively affect the nation's economy and boost tourists’ influx. Tourism is currently the world’s largest and rapidly rising economic sectors in Dubai. The Emirate is investing vast amounts of funds and resources in this sector to ensure that Dubai becomes a desirable place for high-end visitors globally, considering it is slowly trying to move from the revenue generated from selling oil and other petrochemical products.

If you want some assistance in setting up a business in the Dubai area, Commitbiz can help you incorporate the company by offering business consulting services. We also provide numerous other benefits in Dubai and surrounding areas, such as accounting, bookkeeping, audit, intellectual property security and corporate secretarial services. Contact us to know more. We will be happy to help.

FAQs

1. What was the contribution of the hospitality market to the UAE’s GDP in 2018?

It contributed around Dh 150 billion.

2. Where did the Investment Corporation of Dubai invest in USA’s hospitality sector?

 It invested in W Hotel in Washington D.C. and the Mandarin Oriental in New York.

3. What are the business opportunities in the hospitality sector in UAE?

The opportunities are hotel business, travel & tourism business, tour operator, cleaning service, room service outsourcing, etc.

4. Which are the prestigious art museum in Dubai?

They are the Dubai Louvre, Guggenheim Museum, etc.

5. From which countries does Dubai welcomes the most tourists?

The tourists are mostly from India and China.

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