EAHQ Issue 2, April 2015

EAHQ April 2015 | Edition 02

In this Edition WELCOME FROM GER ALD LAWLESS UAE HOTELS AR E GOING GR EEN IN FOCUS: THE GROW TH OF CHINESE INTER NATIONAL AR R I VALS IN DUBAI ECONOMIC OUTLOOK Q1 2015

Welcome Message from Gerald Lawless Welcome to the second edition of the Emirates Academy Hospitality Quarterly, a publication which is aimed at bringing together both academic and industry data in order to provide a brief snapshot of the latest trends affecting the tourism and hospitality industry in Dubai.

On the back of strong growth in 2014 and a successful EXPO bid the Dubai hotel industry continues to diversify creating a much more competitive and dynamic environment that provides new challenges and opportunities for the industry.

This can include opening Dubai to a range of new niche markets as well as dealing with new legislation and creating more sustainable approaches to managing the destination.

UAE Hotels are Going Green Consumer trends are showing a demand for sustainable management within a hotel’s construction and operation. Tech savvy travelers use social media sites like TripAdviser to check the environmental performance of a hotel they are considering staying at.

To meet this demand, some hotels utilize independent environmental certifications to validate their sustainable management initiatives. One of the premier worldwide certifications used today is The Green Globe Certification.

Developed specifically for the travel and tourism industry, it assists organizations with improving their economic, social and environmental sustainability measures across more than 380 indicators.

The UAE also boasts the first water park and hotel school in the world, Jumeirah Group’s Wild Wadi and The Emirates Academy of Hospitality Management to be certified.

In 2013 the Emirates Green Building Council launched an environmental initiative aiming to raise awareness of environmentally friendly construction and encourages using green technologies. Since then governmental mandates have been enacted enforcing new developments to be compliant to various standards including the Estidama Pearl Rating System in Abu Dhabi and the LEED certification in Dubai.

The wave of UAE hotels becoming certified under recognized environmental standards is also in line with the government agenda running up to EXPO2020 which encourages sustainable management of properties.

The shift seen in the industry to operate within a sustainable manner not only appeals to consumer demands but with saving energy and producing less waste, hotels can deliver significant improvements in their bottom line profit.

The region and especially the UAE, has seen a rise in properties obtaining the Green Globe Certification. Out of the 56 certified businesses in the region, nearly 60% are within the UAE.

Angela Anthonisz, Editor Conrad Sokolnicki, Research Associate

MAK ING SENSE OF THE HEALTH AND WELLNESS TOUR IST MEGA PROJECT IN THE UAE R ESEARCH AT EAHM - THE IMPACT OF DUBAI’S CUR R ENT ACCESSIBILIT Y EN VIRONMENT ON A DISABLED TOUR IST’S INTENTION TO TR AVEL TO DUBAI AUGMENTED R EALIT Y HELPS TO ENHANCE THE TOUR ISM E XPER IENCE

April 2015 | Edition 02

IN FOCUS: The Growth of Chinese International Arrivals in Dubai With the number of Chinese tourists visiting Dubai in 2014 increasing by 25% to 275, 675 (DTCM) many hotels in the city are looking at ways to attract this expanding market, particularly when it comes to the high spending, high end luxury traveler who is likely to be attracted by the city’s reputation for shopping and 5 star hotels.

A recent report by Oxford Economics has identified that China is becoming the largest source market for international travel worldwide. Already the global leader in tourism departures, it is estimated that China overtook the US as the largest source of international travel spending in 2014. Chinese travelers made over 67.5 million trips last year and this number is expected to increase to nearly 97 million by 2023.

This tourist, according to the Hurun Report has voted Dubai in at number three, behind Australia and France as a Luxury Destination and a ‘must see destination’ to visit in the next three years.

The second grouping is the rapidly expanding, middle income segment that is increasingly travelling abroad for

both leisure and business, but are the more careful spenders.

In remaining attractive to this segment the diversification of the hotel industry and the subsequent pressure to reduce room rates may have a positive impact on Dubai’s appeal with an average stay of 3.3 nights while Sharjah records an average of 6.3 nights( a reflection of the lower hotel prices).

Despite the expected gradual slowing of economic growth in China from the breakneck pace exhibited over the past decade, the Chinese economy will remain a leading emerging market with considerable impacts on international tourism.

The Chinese market is largely split into two segments – Firstly, the high end luxury traveler with a high travel spend who visits Dubai for the luxury hotels and shopping but stays in a different hotel each night in order to maximize the experience at the destination.

Economic Outlook Q1 2015 Despite a generally positive outlook across the MENA region, STR figures for the first quarter of 2015 show that despite this being the peak season for the UAE there has been something of a slow start to the year with occupancy levels in the UAE falling by 1.7% on the same period last year and RevPAR and ADR both down by 3.7% and 2.0% respectively.

March continues to show a slight fall in occupancy, RevPAR and ADR across the UAE and in Dubai particularly with a 2% fall in occupancy over the quarter.

Abu Dhabi, on the other hand has a 1 % increase in occupancy and strong growth in ADR and RevPAR of approximately 10% on last year.

Dubai currently has the largest number of rooms under construction in the MENA region.. Dubai will see an additional 4,700 rooms in 2015, followed by a more significant jump in 2016 and 2017. While increasing numbers of international arrivals will go some way towards absorbing the increase in supply the most profitable sector is likely to be in the budget travel hotel as the region sees increasing numbers of more cost conscious travelers arriving from Africa and Asia.

This is likely to be a reflection of the lower room rates in the city and the increasing popularity of Abu Dhabi as a tourist destination.

Angela Anthonisz, Editor Conrad Sokolnicki, Research Associate

April 2015 | Edition 02

Making Sense of the Health and Wellness Tourist When we talk about Dubai as a destination, or think about the tourist motivations we are more likely to think about sun, sea, sand and shopping rather than concepts of health and medical tourism.

However the medical tourism initiative launched in 2012 has prompted a number of government entities to consider developing this particular niche as part of the Dubai brand portfolio.

The key will be in clarifying what exactly we mean by the terms ‘health and wellness’ and ‘medical’ or ‘complimentary medicine’. Are we talking about people who just want to relax and unwind in one of Dubai’s many hotel spas? Is it people who want to make themselves feel good or perhaps lose a bit of weight? Many holidays cover these aspects of tourism demand so exactly what should Dubai focus on?

Wellness tourism is increasing by approximately 12% per year and represents a $494 billion dollar industry (Global Spa and Wellness Economy Monitor). Wellness tourists are not people who are unwell.

They are healthy individuals who tend to fall into three main categories – beauty spa visitors, lifestyle resort visitors and spiritual retreat visitors. Motivations are associated with developing a positive state of well-being which is an outcome of practicing a wellness lifestyle. This can be achieved through engaging in a range of behaviours such as healthy eating and/or through developing positive emotions associated with personal growth and fulfillment. This particular sector of the tourism industry is highly lucrative but also highly competitive and can be clearly seen in the growth of healthy options on menus and in specialist spa treatments and yoga retreats.

Medical tourism has become particularly popular in terms of both medical procedures and complementary alternative medicines like osteopathy, homeopathy, acupuncture, traditional Chinese medicine, and so on. For Dubai this niche has become more clearly defined with the city attracting 135,000 medical tourists in 2014, a significant jump from only 15,000 in 2013, and there are further plans to increase this to 500,000 in the near future. Dubai was recently voted in the top 20 for medical health destinations in Arab Health and Dubai Healthcare City last year received 1.2 million visitors for medical treatments.

Mega Projects in the UAE With EXPO2020 approaching, developers of mega projects in the UAE are aiming to deliver their projects well ahead of the iconic event. Here is an update on some of the mega projects in the UAE. •

The AED7.4 billion Dubai Water Canal is moving forward.

Phase 1 and 2 involve building bridges at Sheikh Zayed, Al Wasl, and Jumeirah Roads and Phase 3 sees building the canal that will link the Dubai Creek back to the Gulf. The development will boast retail space, hotels, restaurants, and 80,000 m2 of public space.

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Rising at a fast pace the AED11 billion Al Habtoor City, located along Sheikh Zayed Road, will feature more than 1,600 hotel rooms within three Starwood branded hotels, St Regis, W, and Westin. The residential block will incorporate 1,460 luxury apartments, and a tennis academy.

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Recently announced Aladdin City on the Dubai Creek will give the area a revamp with architecture inspired by the tales of Aladdin. The unique project will have three towers with 25 to 34 stories comprised of commercial and hotel space and a total built up area of 110,000 m2. The towers will be connected by bridges designed to represent the forms of exotic marine life.

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Listed as one of the best new attractions of 2015 by The Telegraph, The Dubai Frame continues to rise from the greenery of Zabeel Park. With completion expected for H2 2015, the project comprises a 150-metre-high, 93-metrewide structure resembling a picture frame. Visitors will have a unique view of the Dubai and see landmarks representing both modern and old Dubai.

Despite the growth in both sectors in Dubai, and the Middle East as a whole, there is still some way to go if we are to capitalize on these highly lucrative markets. Part of the challenge will be to develop these markets as separate but also complimentary niches as they are obviously two very different types of tourist, which need to be reached via different communication channels.

Angela Anthonisz, Editor Conrad Sokolnicki, Research Associate

April 2015 | Edition 02

Research at EAHM - The Impact of Dubai’s Current Accessibility Environment on a Disabled Tourist’s Intention to Travel to Dubai Dr. Stephanie Morris, Scolah Kazi and Anne-Louis Hoejing Disabled tourists comprise a valuable segment of the travel market in Dubai and the numbers will continue to increase as the travel population continues to age globally.

While keeping in mind the profitable niche created by disabled tourists, they do, of course, have unique needs and preferences when making travel plans, not just in terms of accommodation, but also accessibility to transport, cultural sites, entertainment venues, and nature preserves.

Despite the impressive number of visitors coming into Dubai and the potential for accommodating a potentially profitable market niche, there is little detailed information available that addresses and/or clarifies the Emirate’s accessibility scheme. This omission raises an additional challenge given Dubai’s successful bid to host Expo 2020.

Winning this bid makes it incumbent for the local hospitality industry and its attendant offshoots to address the unique needs and preferences of many different market segments, including that of people with disabilities.

Moving forward, a number of concerns will need to be addressed by the hotel industry if Dubai is to make the most of this market in the future: 1.

What is the current state of accessibility in Dubai’s hotel industry?

2. What are the most commonly noted travel concerns of disabled tourists?

3. How does the current state of accessibility in Dubai conform to disabled tourists’ travel concerns?

4. What areas of improvement might be addressed to adequately prepare for Expo 2020?

Augmented Reality Helps to Enhance the Tourism Experience Dr. Timothy Jung, Director, Dr. Mandy Leue, Research Associate, Creative Augmented Realities Hub www.creativear.org, Manchester Metropolitan University, UK Augmented reality provides the opportunity to bring peoples’ surroundings to life by enhancing the real environment through visual and auditory overlays in the form of virtual storytelling, interactive navigation or serendipitous information provision without disrupting other tourists’ experience.

Mobile- or wearable-based ‘augmented reality’ is a useful tool to enhance tourism engagement as it allows the production of content into visitors’ immediate surroundings providing a different view of physical objects and attractions.

This has the potential to engage tourists with the local community and economy Angela Anthonisz, Editor Conrad Sokolnicki, Research Associate

in ways that were previously not available. In addition, local tourism businesses and retailers can be linked to tourist attractions and other points of interest during the tourist experience, engaging the visitor at times where relevant connections can be made.

Forecasts project that the augmented reality market to be worth more than 600 million USD by 2016 which can be largely attributed to the high success rate of smartphones and the increased availability of wearable devices.

to enhanced information, navigation, easy to purchase tickets, value co-creation, concierge service, and up-selling.

With this said, the question won’t be if augmented reality will be the next big thing on the technological market to provide new opportunities for tourism engagement, but which destinations and businesses will be the first to realize the opportunities.

Opportunities for the tourism and hotel industry are immense; from the enhancement of the visitor experience through April 2015 | Edition 02