Tourism lies at the centre of Abu Dhabi’s strategy of diversification away from hydrocarbons and the UAE capital has embarked on a massive expansion of attractions designed to lure visitors.
The neighbouring emirate of Dubai has a more established tourist infrastructure but Abu Dhabi is very purposefully seeking to distinguish itself as an upmarket destination for the 21st century.
As part of a multi-faceted strategy, the national airline Etihad Airways, hotels and cultural institutions are expanding, and new outposts of the Louvre and Guggenheim museums have been agreed.
Most of the new construction is taking place on some of the untouched islands that make up the capital. While development is mostly welcomed by locals, challenges include tailoring progress to fit in with conservative sensibilities as well as overcoming staff shortages that afflict the whole economy amid recent record rates of growth.
There is optimism the government will meet its ambitious targets.
“When Abu Dhabi first started to talk seriously about developing its tourism industry, there was a lot of scepticism about the plan,” says Simon Williams, chief economist for Gulf markets at HSBC.
“We’ve seen them draw and express a pretty convincing strategy, which doesn’t compete with Dubai. The combination of cultural attractions in Abu Dhabi with the established tourist industry in Dubai is a good long-term strategy. Abu Dhabi can be a sole destination as well.”
Other attractions under development include the Qasr al-Sarab retreat in the Liwa desert, a boutique Desert Islands Resort on Sir Bani Yas island, the Saadiyat beach golf course and the world’s first Ferrari theme park.
Foreign visitors are also being encouraged to see the imposing Sheikh Zayed mosque. Built in white marble, gold and semi-precious stones with 57 domes, the recently-opened mosque is one of the biggest in the world and can accommodate 40,000 worshippers.
There are also plans to register the region’s ancient pursuit of falconry at the United Nations Educational, Scientific and Cultural Organisation (Unesco) so that it is recognised as a key part of the emirate’s cultural heritage.
Etihad Airways, which was launched in 2003, has rapidly established its presence. Last year saw a 64 per cent rise in passenger numbers over the previous year, to 4.6m. Routes and aircraft numbers are set to expand further.
There were 1.45m hotel guests in Abu Dhabi last year, and projections for the number of guests by the end of 2012 were recently raised to 2.7m, up 12.5 per cent from original targets set in 2004, says the Abu Dhabi Tourism Authority (ADTA).
The target calls for 25,000 hotel rooms, 4,000 more than originally forecast and a doubling of hotel stock, the authority says.
“The plan is closely aligned to, and totally reflects, the Abu Dhabi government’s intention of maintaining and enhancing its confident and secure society in an open, global and sustainable economy and one which is diversified away from hydrocarbon dependency,” says Tahnoun al-Nahyan, ADTA chairman.
“However, along with this comes a responsibility to ensure that we develop a tourism strategy that respects our culture, values and heritage and supports other government initiatives, including the attraction of inward investment.”
His comments came amid growing concern about a possible dilution of national identity, one response to which was a recent crackdown on foreigners deemed to be dressed in an “immodest” manner. Mall officials will explain discreetly to tourists if they are dressed in a fashion liable to offend Muslim sensibilities after notices explaining dress codes at the entrance to shopping centres were regularly flouted.
A more immediate threat to the expansion of tourism is the acute shortage of staff faced by hotel and leisure facilities. Hotel staff are almost entirely expatriate, coming mostly from Asian countries such as the Philippines, Thailand and India. Wage competition from Dubai, India and other growing economies is tightening the shortage.
To encourage recruitment and retention, some hotel chains might offer language training as part of a drive to get staff from markets such as Latin America and the Baltics.
Wages are almost certainly set to increase. A maid typically earns 750 dirhams ($200) a month and a waiter gets about 1,200 dirhams.
ADTA has set a goal of employing more than 1,000 Emiratis in the hospitality sector over the next five years by investing in training and working with the private sector.
“The shortages and bottlenecks are not restricted to Abu Dhabi but exist across the whole region,” says Mr Williams. “There is growing competition for all key inputs including steel, cement and water.”
Hotels dependent on maintaining five-star quality and service are particularly worried about staff. But companies appear undeterred. For example, the global chain Best Western plans to open 25 hotels in the Middle East over the next five years.
“The strong economic growth in the Middle East, coupled with the huge potential for expansion in the tourism industry over the next few years, will create a strong demand for hotel rooms throughout the Gulf,” says Glenn de Souza, vice-president for international operations, Asia.
Analysts agree the boom is set to continue, even with supply constraints.
