The Abu Dhabi Government lowers its tourism growth forecasts in light of the global economic downturn.
Capital lowers tourism forecast
The Abu Dhabi Government has lowered its tourism growth forecast after the global financial crisis, although it still sees the sector as a major driver of the emirate's economy. Sheikh Sultan bin Tahnoon, the chairman of the Abu Dhabi Tourism Authority (ADTA), said the capital's tourism sector would still experience more than 50 per cent growth on current annual visitor levels to reach 2.3 million hotel guests by 2012, down from the authority's previous forecast of 2.7 million visitors. The industry remains a key component in the capital's economic diversification strategy, Sheikh Sultan said. "We have reviewed our forecasts in light of the current economic climate and will continue to do so," he said during his opening speech at the MegaTrends conference in Abu Dhabi. Abu Dhabi played host to about 1.5 million guests last year and Sheikh Sultan said he expected the same number of visitors this year. According to Jones Lang LaSalle Hotels, the average growth rate for visitor numbers to Abu Dhabi between 2004 and 2008 was 15 per cent a year. Sheikh Sultan said the ADTA expected 10 per cent growth in hotel guest arrivals for next year, with growth returning to about 15 per cent in 2011. This month Dayne Lim Kok Chun, the ADTA's director of product development, admitted the capital was receiving fewer tourists from Europe and developed markets. "We are fortunate in that our forecasts were made on a very conservative basis," said Sheikh Sultan. "We do not want to over promise and under deliver." He said although Abu Dhabi was not "immune to the effects of the global downturn, it is fairly well insulated", citing the capital's "strong economic fundamentals and a current shortage of hotel accommodation". Data show that Abu Dhabi was one of the few destinations that managed to achieve positive revenue per available room (REVPAR) growth in the first quarter of this year, largely due to its shortage of rooms. The capital's REVPAR rose from US$265 (Dh973.21) in the first quarter of last year to $290 in the same period this year, according to STR Global. Jalil Mekouar, the executive vice president at Jones Lang LaSalle Hotels, Middle East and North Africa, said it was unsurprising that the ADTA had lowered its forecasts. "Globally, people are travelling less and when they travel, they travel for a shorter period of time and they spend less - that will affect any destination, Abu Dhabi being one of them," Mr Mekouar said. "That's why the ADTA has been prudent enough to acknowledge that, but at least there is growth, because in a number of other countries there is a stagnation, if not a drop." The new forecasts issued by the ADTA were achievable, given the capital's investment in infrastructure and the expansion of its airline, he said. "I think it's fairly acceptable as a growth rate, knowing that the supply of hospitality products is also going to grow fairly aggressively to support this." However, Mr Mekouar added that the pace of development of tourism infrastructure in Abu Dhabi was also likely to slow to some extent. "They don't want to create an oversupply situation whereby the supply would have grown much faster than the demand, knowing that the demand will take a little bit of time to pick up again because of the downward trend globally of travel." The capital is developing projects such as Saadiyat Island, which will house the Louvre and Guggenheim museums, as part of its long-term tourism strategy. Sheikh Sultan said the ADTA's Advantage Abu Dhabi initiative, which aims to boost meetings, incentives, conventions and exhibitions tourism by offering financial and non-financial support to business event organisers, was under way. About 80 per cent of the emirate's hotel guests are business tourists. "We have a number of proposals from the GCC, the UK and the US. Two of them are now going through the qualification process: one focuses on tourism, the other on IT," he said. email@example.com