Abu Dhabi looks to growth markets to fill the Russian tourist gap

Abu Dhabi plans to focus on visitors from India, China, Africa and the Arabian Gulf to compensate for a fall in Russian tourists and to fill thousands of hotel rooms that are expected to enter the market.

About 8,000 new rooms are expected to open in the next five years, according to Sultan Al Dhaheri, the executive director at Tourism and Culture Authority of Abu Dhabi (TCA Abu Dhabi).

This supply before Expo 2020 will drive rates down but with the attractions on Saadiyat and expansion of Etihad Airways, demand will meet up with supply, he said.


“The strong US dollar and economic slowdown globally are affect­ing spending and the length of stay but we are focusing on markets that will grow, which will compensate [for the drop elsewhere],” Mr Al Dhaheri said. “The ratio of the leisure market is growing and we are trying to build a healthy mix of leisure, corporate and [meetings, incentives, conferences and events] segments here.”

For the next two to three years, the Abu Dhabi Convention Bureau will focus on education, health and energy sectors in the events space, said Mubarak Al Shamsi, the director of the bureau. He was talking on the sidelines of IBTM Arabia, a three-day Mice event that started on Tuesday in the capital.

Last year, eight new hotels and hotel apartments opened in the capital, taking the total room count to 29,760, up 4.6 per cent from 2014. New properties include Jannah Burj Al Sarab, Courtyard by Marriott World Trade Center, and Capital Centre Arjaan by Rotana adjacent to the Abu Dhabi National Exhibition Centre (Adnec).

Abu Dhabi also met its target of 4.1 million tourists last year, up 18 per cent on the previous year.

The emirate received the most guests from within the UAE, whose numbers increased by 20 per cent on 2014 to 1.37 million. India was the best performing overseas market last year, with 280,000 visitors, up 21 per cent on 2014. It was followed by the UK, China, the United States and the Philippines.

Low oil prices and a global economic slowdown took a toll on the numbers from Russia. Guests from the country were down 17 per cent last year compared to 2014, touching 25,118. The number of guests from Ukraine, however, increased by 25 per cent, according to Edward Grigoriev, TCA Abu Dhabi’s country manager for Russia and CIS.

“We are focusing on CIS countries and high-end travellers from Russia and the region,” Mr Al Daheri said.

Compared to Egypt, Abu Dhabi is still an expensive market. Where all-inclusive rooms can cost $50 a night for Russian travellers including airfare, a three-star hotel in Abu Dhabi costs $85 a night without airfare.

For this year, the Russian market is expected to grow by 10 per cent to 30,000 tourists, Mr Grigoriev said.

There is a gap, however, in the number of flights between Abu Dhabi and the region.

Last September Etihad cancelled flights to Yerevan, the capital of Armenia, and scrapped plans to operate flights to Baku in Azerbaijan and Tbilisi, Georgia.

Etihad operates daily flights to Moscow with 150 seats each way, four times a week to Almaty and twice a week to Astana in Kazakhstan.

To drive up the length of stay, Abu Dhabi is encouraging tour packages of the city with Western Region and Al Ain.

The average occupancy rate increased marginally by 1 per cent to touch 75.4 per cent. The average length of stay decreased by 0.3 per cent to 2.99 nights from 3.13 nights.

“Our vast geography and diversity is a unique selling point,” Mr Al Daheri said.

The total hotel revenues in Abu Dhabi went up by 5 per cent last year to Dh6.62 billion as room revenues rose by 7 per cent to Dh3.49bn over 2014. This compensated for the fall in food and beverage revenues to Dh2.32bn, a decrease of 1 per cent. The average room rate in Abu Dhabi was Dh430 a night, a drop of 0.6 per cent from 2014.

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