Ras Al Khaimah reaps benefits as international hotel groups move in
Ras Al Khaimah is reaping the benefits of rising tourist arrivals as international hotel groups make the emirate their latest target for expansion.
Some 577,900 people visited the emirate in the first half, generating about US$84.95 million.
Most of them came from the UAE and Germany followed by Russia, Ukraine and Italy – the top five source markets for the emirate.
At beach hotels and resorts, occupancy rates reached almost 74 per cent and the average daily rate touched $175.71, bringing in total revenues of $69.035m.
In the city, hotel occupancy reached 61 per cent and the average daily rate was $73.67, generating revenue of $15.560m.
In comparison, the average daily room rate across Dubai for July, which is considered a low season, was $196.87, according to HotStats Mena.
The driving force behind RAK’s tourism confidence is affordable luxury, says John Podaras, a Dubai-based independent consultant. With little business travel reaching the emirate, most RAK hotels generate the lion’s share of funds from leisure travellers.
“Five years ago, the corporate sector was the more lucrative one in the UAE, and corporate rates were higher than leisure rates,” he said. “But that changed after the financial crisis as corporates got more price-sensitive.”
He added that the emirate’s proximity to Dubai Airport was one of its main selling points.
“It’s ultimately down to marketing and price positioning,” he said.
The RAK government set up Ras Al Khaimah Tourism Development Authority (Ras Al Khaimah TDA) two years ago as part of its effort to shore up tourism. It had also targeted to invest $500m in tourism development projects through 2013.
“Currently the emirate has nine beach and resort hotels offering a total of 2,239 rooms and six city hotels offering a total of 1,130 rooms,” said Khalid Motik, the RAK TDA director.
But the hotel landscape is set to change as more hotels expect to open their doors next year.
Projects under construction include the $1.8 billion Al Marjan Island, the first man-made island project to be developed within Ras Al Khaimah.
“In the next 10 months [more] new hotels will open on Marjan Island,” Mr Motik said.
These include the 657-key Rixos Bab Al Bahr Resort, which is expected to open in February, the 315-room Marjan Island Resort and Spa, the 265-room Santorini Hotel from The Bin Majid Group, and the 484-key DoubleTree by Hilton Resort, Marjan Island.
The UAE’s first Crowne Plaza Resort with 442 rooms is expected to open in 2015 on the cluster of Al Marjan Islands.
Already open is the 346-room Ras Al Khaimah Waldorf Astoria, which was the Hilton luxury brand’s first in the UAE.
The emirate plans to add 10,000 rooms by 2016.
The tourism sector is also buoyed by its economy, which has a healthy outlook, according to credit rating agency analysts.
In April, Fitch Ratings gave Ras Al Khaimah a stable outlook and highlighted its budget surplus allowing it to undertake new investments without incurring deficits or new debt.
By 2021 RAK expects tourism to generate about 20 per cent of its GDP.
The direct contribution of travel and tourism to the UAE’s overall GDP was Dh89.7bn, or 6.6 per cent of total GDP, last year, according to World Travel and Tourism Organization. The figure is forecast to rise by 4 per cent this year, and touch Dh153.5bn in 2023.
Inbound and domestic leisure travel spending is expected to grow by 5 per cent this year for the UAE to touch Dh 127.7bn, and rise by 4.5 per cent each year to Dh198.4bn in 2023. In comparison, business travel spending is expected to grow by around 3 per cent this year to Dh36.7bn, and rise by 4.3 per cent annually to Dh56.1bn in 2023.
Ras Al Khaimah attracted more than 1.1 million tourists last year generating US$ 159.9m, compared to 835,000 the previous year and generating $108m.