Dubai’s tourism industry, a key driver of non-oil sector growth, got a shot in the arm in the first quarter of the year as overnight visits jumped 11 per cent year-on-year, adding further evidence of improvement in economic activity for both the emirate and wider nation. In the first three months of the year, Dubai hosted 4.57 million tourists compared to 4.1 million a year earlier. The growth was more than double the rate registered in the same period last year. Visitors from India, Saudi Arabia and the UK accounted for a third of the total number during the period, with India becoming the first country to record almost 580,000 visitors in any quarter, according to Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism). “The first quarter of 2017 has set us off on a very strong trajectory for the year and we are pleased to see our strategic investments and policy reforms yielding such definitive impact,” said Helal Almarri, the director general of Dubai Tourism. “As Dubai continues to evolve and expand the breadth and depth of its tourism proposition, we expect to amplify the appeal of our city as the top consideration for not only first-time but also repeat business and leisure travellers.” Russia and China were top growth markets for the period, recording 106 per cent and 64 per cent increases in visitor numbers, helped by recent moves to allow citizens of both countries to obtain visas on arrival. Monica Malik, chief economist at Abu Dhabi Commercial Bank, said that factors that were supportive of a rise in tourism in the first quarter included a moderation in the strength of the US dollar from the end of last year. The dollar index is about 4 per cent off its five-year high reached in December, Bloomberg data show. The growth in tourism numbers is a welcome boost for Dubai and the UAE as a whole because of a slowdown in economic activity because of the crash in commodity prices and the impact of the strength of the US dollar on the affordability of the Emirates for visitors from Europe. Since the end of 2014, the UAE economy has suffered from an oil price free fall, prompting cuts in public spending and softening consumer demand. The price of oil has dropped by as much as 70 per cent since June 2014, but has since partially recovered from record lows reached in January 2016 thanks in part to an Opec and non-Opec agreement last year to limit crude production. “The 11 per cent increase in tourism figures in Q1 reported by Dubai Tourism is consistent with the message contained in our Emirates NBD Dubai Economy Tracker that shows the tourism sector enjoyed strong demand growth and output in the first quarter,” said Tim Fox, head of research and chief economist at Emirates NBD. “As the report suggests, easier visa rules for Chinese and Russian visitors to the UAE have probably helped boost demand in this sector, which is expected to be one of the key drivers of Dubai’s overall growth this year.” The Purchasing Managers’ Index, a monthly gauge of the health of Dubai’s non-oil economy, rose to 56.6 in March from 56.2 in February. A score above 50 indicates economic expansion. The wholesale and retail, travel and tourism and construction industries led the advance to cap the index’s strongest quarter since the first quarter of 2015. Emirates NBD expects the rate of economic growth in the country to improve to 3.4 per cent this year off the back of higher oil prices and improved sentiment, in stark contrast to the IMF’s latest forecasts of a slowdown. The bank’s outlook for next year is closer to the IMF’s own forecast for real GDP growth for 2018 in the UAE, at 4.4 per cent, but it is way off the IMF’s view for 2017. For this year the IMF has cut its estimate to just 1.5 per cent from a 2.5 per cent forecast in October. The IMF estimates that the UAE economy grew at a rate of 2.7 per cent last year. mkassem@thenational.ae Follow The National's Business section on <a href="https://twitter.com/Ind_Insights">Twitter</a>
