Dubai to tap new tourism markets in 2018 and launch ‘Dubai Pass’ visitor pack

Dubai is on track to record 20 million tourists by 2020 as it reaps the benefits of a “diversified” approach to engaging new source markets and rolls out new visitor incentives in 2018, a senior government official said on Sunday.

"Part of our strategy was a diversified market approach because we knew there would be changes happening, socioeconomic or geopolitical, that we needed to be aware of," Issam Kazim, the chief executive of Dubai Corporation for Tourism and Commerce Marketing (Dubai Tourism) told The National in an interview in Dubai.

“We started off targeting six or seven traditional markets which helped us get to the 10 million mark [in 2013], but, since then, we’ve broadened out and had campaigns going on in approximately 44 markets last year. So we’ve come a long way."

Dubai Tourism – an agency of the government of Dubai – recorded 15.8 million overnight visitors in 2017, a 6.2 per cent increase from 2016, according to figures released in February. The emirate has also boosted the average length of stay for leisure visitors by 0.3 days to 6.2 days over the course of 2017, Mr Kazim said.

The traditional top three source markets held their positions last year, with India contributing 2.1 million visitors in 2017, followed by Saudi Arabia with1.5 million tourists, and the UK with1.3 million.

However, newer source markets saw the biggest growth in tourists, including China which moved up to fifth position with 764,000 tourists, a 41 per cent year-on-year increase, and Russia in 8th position with a 212 per cent increase in visitors to 530,000.

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Dubai’s top 10 source markets accounted for 59 per cent of total tourist volumes, noted Dubai Tourism’s 2017 Annual Visitors Report, published on Sunday ahead of the first quarter 2018 figures due for release later this week.

Mr Kazim told The National he aims to maintain the flow of visitors from traditional source markets in 2018 while ramping up efforts to lure tourists from Russia, the CIS, Latin America and the Nordics, especially Sweden, which registered strong growth in 2017.

Promotional activity in China will also continue this year, he added, following a “highly successful” marketing campaign in collaboration with Chinese social media influencers in 2017.

Dubai Tourism this week launches the ‘Dubai Pass’ discount pack – aimed at tourists and residents alike and offering cheaper rates on most of the city’s main attractions and venues, Mr Kazim said.

Also in the pipeline this year is the launch of a new campaign to promote Dubai’s Al Marmoum desert region, popular with cyclists, star gazers, nature enthusiasts and hikers. It is also the area where the emirate’s camel races take place.

“Our campaigns are focused on the lesser known areas of Dubai – its hidden gems,” he said. He noted that the majority (73.8 per cent) of tourists in 2017 travelled to Dubai for leisure purposes, while business travellers made up 11.5 per cent of the total.

“There are further opportunities to engage this segment of travellers, by communicating why Dubai is recognised as a knowledge hub, and as a centre for the Mice (meetings, incentives, conferences and exhibitions) industry,” he said.

The expanded code-share partnership announced last year between Dubai-based airlines Emirates and flydubai is an opportunity for Dubai Tourism to push “transit tourism”, according to Mr Kazim. The government announced proposals last week to grant special visas to transit passengers to leave Dubai airports and explore the city during their stopover. “We are working with Emirates to find ways of encouraging passengers to step outside and just try it out,” he said.

Stabilising oil prices is a positive growth driver for the tourism sector, increasing demand for luxury accommodation in the emirate. However, the prevailing demand in 2018 will be for three- and four-star hotels as visitors seek more affordable options, he added.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Dubai to tap new tourism markets in 2018 and launch ‘Dubai Pass’ visitor pack

Tourism agency plans outreach to the Nordics and CIS, plus string of visitor incentives

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