Dubai looking east for tourism amid global uncertainty

The weather was controversially mixed at the first Trump inauguration in January. But there will likely be no such dispute over whether or not it is raining at the second: the imminent opening of the Trump International Golf Course in sun-drenched Dubai.

The $6 billion golf and residential project is part of the explosive growth that has transformed the emirate from a sleepy port backwater, once best known for the quality of its pearls, into a hub already the fourth most visited city in the world.

After the local tourism authority ambitiously declared it was aiming for the top spot in the coming decade, Dubai is casting its net wider than the usual sources of global affluence, and seeking to bolster already strong visitor numbers from India by boosting demand from China.

China is now the biggest outbound tourism market in the world. And Dubai’s state-owned Emirates Airline, which flies daily to Beijing, Shanghai, Guangzhou and Hong Kong, is due to launch new services in May to two more Chinese transport hubs.

Modern Dubai is inevitably something of an artificial construct. It has 100,000 hotel rooms when it had none in the late 1950s. The 13 million visitors who passed through last year were offered an international, homogenised menu of fine dining, luxury shopping and high-end hotels, alongside the more culturally specific attractions of souks, dhows and camel races.

The whole is an extreme example of how tourism continues to emerge as a key driver of the global economy, ranking alongside oil, food and cars in terms of business volume, according to the UN’s World Tourism Organisation. Other GCC partners of the UAE, including Bahrain, Qatar and even Saudi Arabia, are also pursuing fast-track tourism growth as part of wider development and diversification plans.

But as tourism’s importance grows everywhere, it naturally becomes subject to the same economic and geopolitical influences that determine other sectors of international trade.

Take the affluent Russian women that have long flocked to Al-Maktoum Street to bargain for high quality furs. A fall in oil prices, the impact of Western sanctions and a collapse in the rouble slashed Russian visitor numbers in half by early 2015. Russians fell abruptly from fifth to fifteenth in the league table of foreign visitors to Dubai.

The volumes under discussion mean that shift is not only a blow to the fur-dealers of Al-Maktoum Street but also to struggling Greece, where the Canadian and Scandinavian skins are made into coats and jackets before they are sent for retail.

Meanwhile the wider Middle East has been heavily affected by fears of terrorism and political instability. The region suffered a drop in tourist arrivals last year, largely due to a halving of trips to Egypt, and even while the Gulf has thus far been spared most of that turmoil.

Europe’s growth is still terribly sluggish of course, which is why Dubai and anywhere else driving tourist consumption is pushing hard to expand its reach. India has long dominated the visitor league table, given the emirate’s convenient location between Asia and Europe. But India’s recent crackdown on the black economy could dent incomes and therefore future tourism demand.

So the focus is now above all on China. As part of that strategy, Dubai has announced strategic partnerships with UnionPay International, China’s payment and travel company, and Tuniu, one of its biggest online leisure travel platforms.

Dubai feted the agreement by offering UnionPay cardholders shopping discounts of up to 25 per cent during the 2016 Chinese Spring Festival holiday. Tourism chief Issam Kazim said at the time: “Through our global connectivity as an airline hub and with 12 gateways between China and Dubai, we are well primed to be a compelling preferred destination and transit stopover for Chinese.”

So far, it’s working. Chinese visitor numbers were up 15 per cent last year to about 500,000. Add Dubai to the list of places hoping for robust Chinese economic growth for years to come.