Wealthy travellers from the country see the emirate as an attractive holiday destination but hoteliers lower down the chain are also benefiting. Abu Dhabi is in a prime position to capture a share of the market if it promotes itself well.
Dubai in frame for Indian tourists
India's economic slowdown is not preventing wealthy Indians from splashing out on expensive holidays.
Luxury travel out of India to destinations including Dubai is still on the rise, travel agents say, despite concerns about the country's economy and a weaker rupee, which pushes up the cost of a holiday abroad.
"Luxury travel is all about indulging oneself and the economic slowdown has seen no negative impact," says Madhav Pai, the chief operating officer for outbound leisure travel at Thomas Cook in India. "Luxury travel has instead seen a growth. Travel is now firmly entrenched in the Indian consumer's DNA. Given the profile of the emerging new luxury client, that critical 'brag factor' fuels the demand for travel."
Thomas Cook reports an increase of about 15 to 20 per cent in the number of affluent Indians booking luxury holidays in the past year and, in line with this, there has been a similar increase in luxury holiday bookings to Dubai with most clients opting for private villas or beachfront hotels, Mr Pai says.
"Not only are they willing to spend more but the holiday itself is veering towards evolved travel with a focus on stays based on their sophisticated tastes and interests," he adds.
"Our luxury brand, 'Indulgence', has seen a strong growth from the profile of increasingly well travelled, cosmopolitan Indian elite - covering the upper corporate echelons, royalty, movie moguls and entrepreneurs."
The UAE is also increasingly trying to tap India for tourists from both middle and high-income backgrounds. With a population of more than 1.2 billion and a growing middle class, India has a burgeoning travel market. A total of 702,142 Indian guests stayed in Dubai's hotels last year, meaning it overtook the United Kingdom as a source market, and it was in second place only to Saudi Arabia, according to figures from the Dubai Department of Tourism and Commerce Marketing (DTCM).
This helped Dubai to enjoy increase of 10 per cent in the number of hotel guests overall in the emirate last year over the previous year to reach a total of 9.3 million guests, while the average length of stay rose 12 per cent to 3.6 days, while revenue grew by 20 per cent last year to Dh16 billion (US$4.35bn), according to figures from the tourism department.
"India is increasingly becoming an important feeder market for leisure travel to the UAE, Europe and the rest of Asia," says Gaurav Sinha, the managing director of Insignia, a brand communications firm based in Dubai that specialises in travel.
"At the luxury end, ultra high-net worth travellers from India continue to find Dubai an attractive destination, especially due its shopping malls, tax-free incentives and its connectivity to Europe. Dubai is gaining a reputation for being an attractive wedding destination as it offers everything for the Indian diaspora."
The Indian movie industry has also had a role to play in attracting Indians to Dubai, Mr Sinha notes.
"Bollywood has also enhanced the visibility of the UAE with blockbusters being filmed in Dubai and that association elevates relevance."
Still, it is taking some time to convince Indians the destination is not just for the super-wealthy. "There is a misconception among mid-segment budget travellers that Dubai is expensive but this is being addressed as more attractively priced holiday packages hit the high street," Mr Sinha adds.
Tarique Khatri is the senior vice president of business development for Cleartrip, an online travel company based in India. He agrees the high end travel market in India has been largely immune to fluctuations in the rupee and slowing economic growth.
"The high net-worth segment or the luxury segment has not been impacted," Mr Khatri says.
A surprising number of his company's customers are opting for luxury holidays in the UAE, he adds.
"When it comes to the Emirates as a destination, 35 to 40 per cent of hotels that we are selling from here are four and five-star hotels. One would think that people would prefer to stay around the Bur Dubai area, or the Deira, and pick up two-star and three-star properties. There is a segment for that, which is the mid-level and lower mid-level segment. But when it comes to the high-end segment, they prefer to stay in places like the Grand Hyatt. There's also a lot of demand for the Burj Al Arab."
Even the mid-income Indian travellers are keen to get a taste of luxury in Dubai during their stays, he says.
"Atlantis has now become a part of even the regular tour operators' itinerary," he says. "So you have three nights or four nights in a regular hotel and then you add another night or two in the Atlantis. They aspire to stay in a place like the Atlantis."
Shopping and restaurants are among the main attractions in Dubai for India's luxury travellers.
The Burj Al Arab and Armani hotels are among the most popular for wealthy Indians travelling to Dubai, Mr Pai says.
"Abu Dhabi is largely demanded as a day tour from Dubai as an add-on with a Ferrari World visit," he says. "Abu Dhabi is relatively untapped and could do well. India has an opportune growing luxury segment, and Abu Dhabi, if positioned well, could certainly leverage off this viable market."
In general, Indians are also becoming a lot more adventurous in the destinations they choose when booking a luxury holiday, he explains.
"Our luxury segment has seen an increasing popularity for destinations like South America - Peru, Argentina, Brazil - South Africa, Ireland, Seychelles, Tuscany, south of France, Myanmar, Antarctica, Canada, Israel."
Dubai often serves as a stopping-off point for such holidays, Mr Pai says.
"Dubai due to its proximity is a very attractive en-route stop in an overall luxury holiday."
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