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Hospitality Sector and Reason for its Growth in the UAE

By Sakshi Srivastava - 15 Jan 2022 Last Updated: 29 Apr 2022
Hospitality Sector and Reason for its Growth in the UAE

The UAE government sparked the development of the hospitality industry a few decades ago by constructing a slew of new and sophisticated hotel complexes. The country now has one of the best hospitality industries in the world.

Every year, more foreign and local hotel chains, resorts, and other establishments that provide higher-quality service are established. This hospitality sector plays a vital influence in deciding on a place for worldwide and regional events such as conferences, workshops, festivals, and so on. The hotel industry in Dubai is one of the fastest-growing in the UAE, accounting for over 4.8 percent of GDP.

The UAE's Current Hospitality Situation

Hotel revenue increased about 73% to Dh 1.8 billion ($490 million) in Q4 2018 from Dh 1.08 billion the previous quarter, indicating that the hospitality sector is still doing well. The number of hotel rooms in Dubai, as well as their occupancy rates, have increased, according to the Dubai Ministry of Tourism and Culture. In comparison to the previous quarter, the length of stay increased from 2.3 to 2.7 nights.

This growth was ascribed to increased investment in the hotel industry and an increase in the number of entrepreneurs and businesspeople entering the market. The celebration of the new year, as well as several national and international events, had a vital part in attracting large numbers of tourists.

Visitors are drawn to Dubai to spend their Dubai holidays because of the establishment of major art museums such as the Dubai Louvre and the Guggenheim Museum, as well as the recent start of Warner Bros. The World of Dubai. The majority of tourists in Dubai, according to a recent survey by the Department of Tourism and Culture, come from India and China.

The UAE's Hospitality Sector is Growing for a Reason

The Middle East, particularly Dubai and Abu Dhabi, is recognised as the GCC's leading metropolis in terms of hospitality development. Tourism and infrastructure, as well as public and private sector jobs and industry, are all rising. Numerous chances exist in the hospitality sector for you to profit from beginning a business in the UAE, including:

An Increase in Tourism

Many natural islands, magnificent beaches, diverse landscapes, and other attractions draw a large number of people. The growth of the tourism industry has also been aided by the increase in the number of foreign hotel and resort chains. Due to technological advancements, Dubai has emerged as a major medical tourism destination.

Multi-Cultural Environment

Individuals from all walks of life coexist together in Dubai. Visitors from all over the world visit, making it an extremely accessible and multicultural city.

A Strategic Location

Dubai, the UAE's capital city, is located on a small island. It is connected to the mainland by three multi-lane highway bridges. It is easily accessible via air, land, and sea. It takes less than 2 hours to drive from East Dubai to West Dubai, which is renowned as the "bridge between the east and the west" due to its strategic location. It is one of the most powerful countries in the UAE and is home to Dubai's Emiri Family and the President of the UAE, as it is the country's capital.

Safety and Security

Dubai is regarded as one of the safest cities in the world, having overcome cities such as Vienna and Tokyo to claim the title of safest city. All visitors must pass through the town's stringent customs procedure. Dubai International Airport has a variety of security checks and inspection mechanisms in place to boost the city's security.

A variety of shopping malls, Festivals, And Activities

Because Dubai has a hot desert climate, much of the time is spent indoors in shops and conference centres. Not only are malls and conventions restricted to shopping, but they also serve a variety of other purposes, such as gathering friends, avoiding the sun, and so on. The many activities attract a lot of interest from worldwide countries, in addition to incorporating the local population.

The Government's Function

The Dubai Tourism Authority has opened offices in the United Kingdom, Germany, and France to promote and publicize the destination and brand, with plans to open more in the following years. The Dubai Industrial Plan 2030 will have a significant impact on Dubai's tourism and hospitality businesses.

The reasons listed above are the main reasons why Dubai is a good tourist destination and a great place to launch a hospitality business. The UAE's emphasis on tourism, as well as the Dubai Industrial Strategy 2030, will have a favorable impact on the economy and increase tourist influx. In Dubai, tourism is the world's largest and fastest-growing economic industry. The Emirate is investing a significant amount of money and resources in this industry to guarantee that Dubai becomes a popular destination for high-end visitors from around the world, as it attempts to diversify its revenue streams away from oil and other petrochemical products.

Growth, Trends, and Forecasts in the Hospitality Industry in the UAE

The United Arab Emirates is a vital country in the Gulf area that has made a significant contribution to the hotel sector. Due to the prolonged closure of international borders due to the COVID-19 epidemic, the number of revenues earned by the industry dropped dramatically. However, the country's advantageous location, rapidly expanding world-class airlines, and enhanced transportation infrastructure have all aided its rapid growth over the research period (except 2020 due to pandemic).

Leisure facilities have been an important part of the United Arab Emirate's economic diversification policy, attracting international hospitality giants such as Marriott International, Hyatt, and Hilton. Meanwhile, the hotel businesses DAMAC, Emaar, and Jumeirah expanded swiftly in the country.

Conclusion

During the 2007-2017 decade, the tourism and hospitality sector had tremendous growth, increasing its direct contribution to the country's gross domestic product by 138 percent while also increasing sectoral employment by 119 percent. If you need help starting a business in Dubai, Dhanguard can assist you by providing business consulting services.

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

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