Oil Economy to Tourism Economy, UAE

Economic development targeted at one sector of a country’s economy is a risky play; so as investments into the weak sector of an existing economy. For all developed and super economic countries, there is a multi-focused sector that generates revenue; and for all top billionaires, there is a variety of investments in different sectors. The United Arab Emirates is known to be an oil-fuelled economy, however, there are other sectors that are boosting the economic performance of UAE – Travel, Hospitality, and Tourism. UAE keeps pushing for new developments that strengthen their tourism sector to positively impact the emirates Gross Domestic Production. Investors must target these sectors of the UAE.

Operating under a free market system – free trade policy attracting no personal and corporate taxes, all emirates under the UAE seems to be attracting more of the world’s largest investors. A statement by The United Kingdom (UK) Tourism Industry, for instance, illustrates the keen position of the UK tourism sector to expand towards the UAE and as well to ensure trade partnerships with the rapid booming tourism sector of the UAE. According to the UKTI in the UAE, they are committed to helping companies in Britain increase their competitiveness through overseas trade in the UAE. “We also offer professional, authoritative and personalized assistance to help companies in the United Arab Emirates locate and expand in the UK. The United Arab Emirates is one of the world’s fastest-growing destinations for business and leisure visitors. This is hardly surprising since geographically, economically and culturally, it is in a unique strategic position between East and West”.

At the beginning of the century, UAE’s economy has significantly been dependent on other sectors rather than oil. Since early 2000, UAE keeps on developing more tourism projects. One that attracted lots of attention was the World’s tallest hotel and the Palm Islands. These projects continuously connote the world’s wealthy to boast of the visit and time spent in such tremendous places. The UAE through these projects has established theoretical simulations into real life – large scale structures. A few months ago, news declared that UAE will put $234 billion on the future tourism projects which may lead to 85% of tourism investment in the region by 2018. More tourists actually mean increasing airline & airports, and hospitality sector as well. With an annual investment growth of about seven percent, UAE is responsible for about 41 percent of cumulative investments targeted towards Travel and Tourism in the Middle East. These investments are yielding results and investors are surely wearing big smiles! In 2012, a total of about 10 million visitors were hosted in UAE with the Dubai International Airport receiving 52.3 million travelers in the first 11 months of 2012.

Megastructures, technological advances, beautiful sunny weather, pretty sand beaches, and beautiful malls are doing the trick for the tourism industry in UAE. However, the repeated visits of tourists to UAE is not the mega structures but the continuous investments towards the tourism sector. By 2020, tourist attraction to UAE is likely to triple – considering the underway projects going on in the country; First usable 3D printed building, World’s Largest Solar Plant, Department of Economic Development’s new requirement to redesign grocery stores, and a lot more. Another reason for the increasing number of visitors and the motivation for investors to target UAE is accessibility to the Emirates. Although not easier, the travel hub for trade, businesses, and tour is scaling up its national airlines to enable direct transport of their million visitors and currently supporting visa-on-arrival for over 30 nationalities. The tourism market in UAE expands beyond hospitality and sightseeing but a reflection of a strengthening economic sector. If the oil gets finished for an oil-fuelled economy, the travel and tourism sector is likely to be a backbone to hold the UAE firm. By 2030, it will be no surprise if tourism contributes to over 70% of UAE’s economy.