Our business travel & transport section is often overlooked, because of its significance when it comes to budgeting for remuneration offerings. Whilst it’s not surprising that it takes a backseat to housing costs, education costs and health insurance costs, it represents a valuable contribution, particularly for those large employers looking to budget for travel to & from the Emirates.
In this mailer edition, we look a little more closely at the overlooked sector and show how our Cost of Living UAE Report 2017-2018 can make a valuable contribution to your C&B planning for the coming final year.
Tourism Sector Summary & the UAE’s Beloved Airlines
The direct contribution of Travel & Tourism to UAE GDP was AED 68.5 bn (USD 18.7bn), 5.2% of total GDP in 2016. It is forecast to rise by 3.2% in 2017, and then continue to rise by 5.1% per annum, with each successive year, from 2017 – 2027, to a staggering AED 116.1 (USD 31.6bn), which would equate to 5.4% of predicated total GDP in 2027. The numbers are of course forecasts, but the story they tell is clear – UAE’s vision for 2027, features tourism just as prominently as it has done for the past two decades, despite the increased emphasis on automation, software and energy.
When discussing the UAE’s meteoric rise in tourism during the 21st Century, you cannot ignore the contribution made by Emirates Airlines and Etihad Airways, who have continually upped their game, introducing direct routes to new destinations, representing, undoubtedly two of the best global carriers, in almost every possible indicator. The same can be said for other UAE staples, such as the impressive Jumeriah Group and other entities within Dubai Holdings.
Putting the UAE’s tourism sector into perspective, might help by comparing it to Orlando, FL, another fantastic global tourism destination, with a lot to offer punters:
UAE Hotel Sector from 2013 to date
By the end of 2013, the UAE comprised 590 hotel establishments within its seven emirates (excluding rest houses, serviced apartments and branded residences), totaling more than 93,000 rooms. Dubai and Abu Dhabi accounted for 64% and 22% of hotel supply respectively, while the Northern Emirates constituted 14% of the total supply. It is estimated that between 2014 and 2016, an additional 28,000 hotel rooms were added to the market, bringing the total in 2017 to just over 120,000 rooms. Branded hotels continue to dominate the market, as approximately 43% of hotel establishments belong to international operators, such as the Hyatt, Hilton, and all of the brands that sit within the Starwood Group.
Hotel Price Fluctuations & Analysis
Here we’re treating our readers to a sample of the data we report related to hotel costs, in our Cost of Living UAE Report 2017-2018. A clear trend we’ve observed in Q4 2017 is that Low Season hotel prices declined significantly y-o-y from 2016 to 2017, across the three main different categories (3, 4 and 5- star). On the other hand, there is a divergent story for High Season prices – most them increased across the main categories.
The average price change from Q4 2016 to Q4 2017, for hotels within Dubai, Abu Dhabi, Sharjah, RAK and Fujairah is highlighted below:
• 5-star Low Season: -35.7 %
• 5-star High Season: 10.3 %
• 4-star Low Season: -30.8 %
• 4-star High Season: -2.2 %
• 3-star Low Season: -50 %
• 3-star High Season: 1.5 %
Data Source: Cost of Living UAE Report 2017/ 2018 (Travel & Transport Section Page 181)
Data Source: Cost of Living UAE Report 2017/ 2018 (Travel & Transport Section Page 183)
Purchase the Report
Bridge the Data publishes regional cost of living and industry salary reports within the Middle East. With over a decade of data accumulated on the cost of living and salary trends across the MENA region, Bridge the Data helps to close the gap between HR & finance personnel and the limitless data points they need access to, in order to accurately formulate their annual C&B adjustments and allowances.
Bridge the Data has over a decade of data, 30 individual reports on the cost of living and industry salary reports, in 30 cities throughout the MENA region, and has been helping more than 50 Fortune 500 clients make sound compensation and benefits decisions, each financial year.
At Bridge the Data, we seek to quantitatively track the cost of living in several Middle Eastern markets, thereby empowering firms with a clear and level playing field to attract and retain staff, wherever they have labour throughout the MENA region. As a small, but locally based organisation in the UAE, we truly hope you enjoy our report and we welcome any feedback you have.