Roger Federer, Macy Gray and Tiger Woods have played starring roles in tempting tourists to Dubai.
Hoteliers and event organisers say high-profile events such as the Duty Free Tennis Championship, the International Jazz Festival, the Desert Classic and the Dubai Shopping Festival have been crucial in bringing in the visitors and generating international exposure for the emirate.
The tennis great Federer has helped pull in the crowds for this week's Duty Free Tennis Championship, while all eyes were on Woods when he took part in the Desert Classic recently. And Gray delighted music fans last week.
"These activities are very important," says Naeem Darkazally, the vice president of sales and revenue at Rotana, which has 13 hotels in Dubai, with 3,321 rooms. "You can't paint the world with one brush.
"You need to hold different cultural events. Not everybody just comes for shopping.
"They also want to do something else as well, and we feel that in the diversity of our sources of business during the shopping festival month. We have seen a positive impact."
Tourism accounts for 19 per cent of Dubai's economy, according to the Department of Tourism and Commerce Marketing. An estimated Dh10 billion (US$2.72bn) was spent at the Dubai Shopping Festival last year.
Sporting events, including horse racing, are also a major draw for tourists as well as creating exposure for Dubai as a premier destination.
"That has happened not only with Dubai World Cup, but with all the major sporting events that have grown and blossomed in Dubai and Abu Dhabi," says Frank Gabriel, the chief executive of the Dubai Racing Club.
The Dubai International Racing Carnival, which started in mid-January at the Meydan Racecourse and runs for 10 weeks, offers more than $37 million in total prize money.
The big event on the horse racing calendar is, of course, the Dubai World Cup, which last year attracted almost 50,000 spectators. Organisers are hoping to host even more spectators this year.
"It's a world event. It's one of the greatest horse races, offering a purse of $26m," Mr Gabriel says. "That in turn brings in people from all over the world."
He points to the Dubai World Cup, in particular, as attracting spectators from North America, Europe and Japan.
"Tourism has grown not just because of the sporting events, but because of the climate and the hospitality," Mr Gabriel says. "It's just one of those tools that increased that awareness and we're fortunate to try to grow that awareness with the Dubai World Cup."
Attractive deals have also boosted tourism to Dubai this year. Before the economic downturn, room rates were averaging $300 a night. Now rooms can easily be found in Bur Dubai or Al Barsha for less than $100 a night. Even luxury properties are much more affordable.
"Dubai is much better value for money than ever before," says Mr Darkazally. "It has seen an increase in occupancies and Dubai has now stabilised as a leisure destination. It does attract all layers of society from average income to families to group business."
Mr Darkazally highlighted the Dubai International Jazz Festival, of which Rotana is a sponsor, as a great event for the emirate.
"The jazz festival has been very successful this year," he says. "All these activities are worldwide and regionally known. The jazz festival, for example, is a unique event.
"I think more than ever, with these activities, with the increase of inventory, the nice weather, there's really nothing missing for anybody who lives in the Middle East to say 'yes, let's go to Dubai … let me take my wife and kids.' It makes a lot of sense to have a week in Dubai. It is good value."
Occupancy has reached 100 per cent at a number of Dubai hotels this month, largely because of special entertainment events, major conferences, and political unrest in parts of the Middle East.
rbundhun@thenational.ae
Analysis
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Cryopreservation: A timeline
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- Full hormone production regained within 4-6 months
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
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AT4 Ultimate, as tested
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