At the recently concluded 13th annual Arabian Travel Market (ATM) in Dubai, delegates from local, regional and international travel and hospitality sector reaffirmed their faith in the sound policies adopted by the region's tourism industry one that has set an example for the world in developing the sector despite the region being embroiled in controversy.

Spearheaded by Dubai, the Middle East figures among the fastest growing regions in terms of tourism. Developing the sector is being seen worldwide as a pragmatic move by countries that are currently flush with petrodollars and thus are not desperate to look for other avenues of revenues. However, stepping on the gas to make their economies largely independent of oil revenues, the Middle East in particular the GCC states are judiciously diverting their budget surpluses to the sunrise sectors of travel and tourism in order to ensure a sustained bright future for their countries.

Gulf business spoke to a number of key local, regional and international experts to find out their views on the current situation and profile the latest developments.

The 13th annual Arabian Travel Market (ATM) in Dubai demonstrated the increased confidence in the market of prominent exhibitors. Registering 1,750 exhibitors from 59 countries, the event recorded a year on year growth in occupied floor space of more than 39 per cent. Abu Dhabi Tourism, the largest stand operator this year, had increased its total floor area from last year by 72 per cent to 1,034 square metres and also news the Greek National Tourism Organisation had reserved an increased stand size 143 per cent larger than 2005.

Since 1994, the exhibition has witnessed annual growth of 10 per cent to reflect the expansion of the local tourism industry and also its increasing importance amongst outbound markets worldwide, related business generated in the region last year topping $1 billion (Dhs3.67 billion).

The years ATM boasted new entrants from Japan, Poland, Ireland and Ethiopia. Explaining the importance of ATM's increased popularity, organisers Reed Travel Exhibitions chairman Tom Nutley said: Our statistics show that nearly 83 per cent of delegates are of management status and above, which gives credence to ATM and its ability to attract influential buyers who have significant spending power.

This years ATM comes at a time when Dubai's booming hospitality industry is reporting record levels of growth with guest numbers hitting 6.2 million and revenues reaching Dhs8.8 billion, said Khalifa Ali Buamaim, overseas promotions manager for Dubai's Department of Tourism and Commerce Marketing. Such a performance confirms that Dubai is an ideal year-round destination and the large participation of the public and private sector organisations at the event reflects this.

Event patron His Highness Sheikh Mohammed bin Rashid Al Maktoum, vice-president and prime minister of the UAE and ruler of Dubai, officially opened the ATM on May 2 with a tour of the premises alongside RTE chairman Tom Nutley and a VIP entourage which included Lebanese tourism minister Joseph Sarkis, Egyptian tourism minister Zohair Karrana, Oman tourism minister Dr Rajiha bint Abdul Emir bin Ali and the chairman of Saudi Arabia's Supreme Commission for Tourism, His Highness Prince Sutlan bin Salman.

Turning to his entourage, Sheikh Mohammed said simply at the time: Our visions continue to expand. Nutley, who holds similar confidence in the prospects of the Middle East tourism industry later added:With the Middle East airlines opening up new routes and destinations, additional countries within and outside the region are looking to leverage their tourism potential throughout the Middle East, and the future looks good.

Explaining the airlines involvement in the ATM, Emirates airline senior vice-president for commercial operations, Hamad Obaidalla said: Emirates is proud to contribute to Dubai's strengthening reputation as a global travel and tourism centre, which has grown to become one of the travel industrys benchmark events.

The first three days of the ATM attracted over 12,00 industry professionals, a record for the event. Those in attendance included trade industry delegates from 99 countries, many of them not previously represented, including 200 representatives from the Americas an increase of 200 per cent year on year. Explaining the latters significance, RTE group exhibition director Chris Chackal said: The Americas have been a region we have found hard to penetrate in both exhibitor and investor terms, but with the opening of new routes from the Middle East to various parts of the US, we can see the market developing.

Giving some indication that the world tourism industry is on the rebound following blows brought about by the US September 11 bombings in 2001 and the Asian tsunami in 2004, a UNWTO report has described the growth of the Middle East Travel and Tourism economy currently ranked 9th worldwide and 8th in relative contribution to regional economies as moderate, with average recorded growth rates of 7 per cent following a strong performance in recent years. 

According to the World Travel and Tourism and Council (WTTC) however, the future of the Middle East T&T is bright, with economy contributions forecasted to rise from 9.6 per cent ($102.2 billion) this year to 10.1 per cent ($189.5 billion) by 2016, representing a GDP contribution growth from 2.6 to 3.1 per cent set to create 6,141,000 jobs in the same period. 

Major news announced at the ATM included French hotel group Accors plans to increase is total portfolio in the GCC, Levant and Yemen from 18 to 58 properties by 2009, in a move set to create 16,500 extra hotel rooms. Also announced was Abu Dhabi-based ALDAR Properties plans to build 32 new hotels in the emirate, the US Marriott pledged to boost the 6,557 rooms it currently operates throughout the Middle East by 250 per cent, and Banyan Tree Hotels & Resorts Angsan Resorts & Spas pledged to build a $110 million five-star resort and spa in Abu Dhabi to be developed by Abu Dhabi's Tourism Development and Industry.

Zahhar Travel and Tourism of Damascus, Syria, secured 150 meetings with inbound and outbound tour operators and wholesalers during the first two days of the event, which it has participated in for the past six years. Zahhar's director Radwan Alwan acknowledges the result is good news after recent years, which has seen business drop off a little.Alwan added: The industry has definitely come back to its peak to levels not achieved since three years ago.

Another prominent exhibitor at the ATM was Japan, which reported a phenomenal response in its debut year.
 
Yosuke Okazaki, director of planning and projects, Japan Cooperation Centre for the Middle East, said: Due to the response, we will definitely return next year and will in fact increase our stand space to a pavilion to accommodate Japanese tour operators and hotels now interested.

Another first time exhibitor, African Sunset, who represented South Africas luxury blue train, was also pleased with its return on investment. We feel we reached our target audience at the ATM and that we've now serious business leads to follow up, said African Sunsets Germany area manager Helmut Mochel.

For Dubai Alpha Tours representative Imad Iridi, the ATM enabled his company to establish a vital link with a US supplier and fulfil his aim to tap new market opportunities following his participation. The huge European and CIS presence at the event increases business opportunities for us and enabled us to successfully network. I have just agreed to introduce to the local market horseback riding tours in conjunction with a firm from Texas, which gives an indication as to why we continue to participate, Iridi said.

According to the WTTC, which recently launched its new Middle East chapter, the regions T&T industry is expected to generate $147.6 billion of economic activity this year, a figure set to reach $279.4 billion by 2006. Total demand is expected to grow by 4 per cent in 2006 and 4.4 per cent per annum in real terms between 2007 and 2016, representing 2.3 per cent of the worlds market share.

Predicts Chackal: All the industry surveys and forecasts are predicting great things for the industry within the Middle East. And with the regions populations soaring, the outbound market should fare equally well.

The hospitality industry is not affected  by terrorist attacks or epidemics
Ed Fuller, president and managing director, Marriot Lodging 

How has the hospitality sector in the Middle East region fared in the past five years?
Globally for us, the Middle East region is the best market. We have year on year doubled our sales and there seems to be no signs of slowing down.

Are we heading towards an oversupply of hotel rooms?
I don't think so. We are nowhere near full-capacity and demand continues to be strong. As long as there is demand, we will have to keep building, as space at present is very limited.

As shown by Egypt, tourism is a very sensitive sector. What's you insurance against things such as bird flu or terrorist attacks?
The hospitality industry is not affected by terrorist attacks or epidemics. In fact if you observe closely, the one industry that does well in a time of crisis is the hotel industry. In my 30 years with the group, we have never lost a property to a conflict or attack and we are in almost every part of the world from Panama to China. As long as people are travelling and there is business to be done, we will always be there to provide the service.

What is your expansion plan for the near future?
We plan to increase the number of hotels under our management to 22 in the region. In five years time, you will see a 280 per cent increase in the number of rooms we have  on offer.

What geographical regions and industry sectors are you most bullish about and why?
Right now the focus seems to be on luxury, but we will see a growing demand for mid- range rooms soon. At Marriot we are building our Courtyard brand in the region to cater to this demand.

We want Dubailand to be this fun place for everybody
Salem bin Dasmal, CEO of Dubailand.
The sheer size and scale of Dubailand aptly personifies the ambitions of Dubai  to be the largest, highest and, indeed, the best in whatever it does. Salem bin Dasmal, the CEO of Dubailand, explains the dynamics of the larger-than-life project during a no-holds-barred conversation with Gulf Business at the sidelines of ATM 2006.

How is the Dubailand project shaping up?
As far as infrastructure is concerned, Dubailand is advancing at a rapid pace. Great things have happened under the leadership of HH Sheikh Mohammed bin Rashid Al Maktoum, vice-president and prime minister of the UAE and ruler of Dubai. We have received extraordinary support from all authorities and agencies concerned.

The RTA (Roads and Transport Authority) under the stewardship of HE Mattar Al Tayer has been extremely helpful. Collaboration with the authorities has helped in fast-tacking developments in Dubailand. We have received a great response from the Dubai Electricity and Water Authority and an undying support from Dubai Municipality under Eng. Hussain Nasser Lootah, its acting director-general.

I wouldn't be wrong in saying that the driver of Dubailands success has been our collaboration with the various departments and agencies. Three of our projects Polo and Equestrian, Dubai Heritage Vision and Dubai Outlet Mall are set to open later this year.

How much investment has been secured for the projects in Dubailand?
Dubailand is a modular project, with around 50 mega projects under seven broad categories theme, leisure and water parks; downtown, retail and entertainment; health and well-being; science and planetariums; sports and outdoor world; eco-tourism world; and art and culture.

The investments by UAE, GCC and international investors in the existing 26 projects have already touched Dhs35 billion ($9.5 billion). [This obviously excludes Bawadi, the recently announced Dhs100 billion ($27.25 billion) hospitality and tourism development project, which will see the construction of the worlds largest hotel.] A majority of the investment roughly 70 per cent is from the UAE and the rest is mainly from investors in the GCC region.­

These investments are adequate for the projects currently underway and will see us through until 2009, when many of these projects would already be up and running. Further investments expected to be made by regional and international investors in new projects are estimated between Dhs27 billion and Dhs30 billion ($7.36 billion and $8.17 billion).

Dubai expects 15 million tourists by 2012. Where are these numbers going to come from?
Within the region which is our short-term target Saudi Arabia is our biggest market in the GCC. Then were looking at a growing number of tourists from Iraq, the Indian Subcontinent, Levant and North Africa. In the medium-term, growth in tourist numbers will be boosted by inflows from Europe, in particular Eastern Europe, and the Far East, including a huge number of tourists from China and Japan. In the long term, were looking at North America as a market from where large numbers of tourists will be arriving.

Now if you realize, this growth is aligned with Emirates airlines routes, which has consolidated its regional routes and is now focused on the European and North American routes. So, it's all based on extremely well planned details. It's part of the destination marketing campaign by the DTCM (Department of Tourism and Commerce Marketing), Dubai.

Dubai is no longer a single destination, but a multitude of destinations. It's continuously growing. There are already more than six million tourists visiting Dubai every year. Apart from organic growth, Dubailand will be a magnet for attracting at least an additional three million tourists a year when it is ready. Dubailand will be the next Dubai destination.

Is it mostly targeted at the high-end leisure tourist?
Not at all. Well have something for everybody for individuals, for families, for couples... We want this to be a destination for attractive, affordable fun. There will be great value for what you spend. And an element of fun for everybody from theme parks for budget travellers to spas for the well-heeled.

Dubailand will have 12 entertainment theme parks, including one of the largest water parks in the world the Aqua Dunya, which will have the worlds largest docked ship hotel in the form of the Desert Pearl. The theme parks will also include the Restless Planet, a dinosaur theme park being developed in co-operation with the Natural History Museum in the UK.

Then there will be a complete Sports City featuring large state of the art stadiums; the Great Dubai Wheel; the Islamic Culture and Science World; the Mall of Arabia, set to become one of the largest shopping centres in the world, and other attractions that cater to the entire family.

What is the image that you want people to have when they think of Dubailand?
Dubailand is an experience. It will mean different things to different sets of people people with a different sets of expectations and experiences. But we want people to think fun when they think of Dubailand. We realise that we can't be everything to everybody, but we want to be this fun place for most people. 

The GCC has reached a maturity level that demands more economy hotels
Jean-Luc Motot, CEO, Accor Middle East and Africa and Accor Global. 

How has the hospitality sector in the Middle East region fared in the past five years?
As in every emerging market, the first hotel developments of a country normally are within the luxurious range. The more mature the market, the greater the need of segmentation and mid-range hotels. The GCC, particularly Saudi Arabia and the UAE, have now reached a maturity level that demands more economy-range hotels, which are mainly frequented by business travels.

Are we heading towards an oversupply of rooms?
Dubai might face an oversupply of hotel rooms at some stage, but the market is yet to grow further due to developments such as the expansion of the airport, which will eventually lead to 15 million visitors per year.

The hotel market moves in cycles; at some times, operators do very well, some times are tougher. In a situation of an oversupply, it is essential to deliver clever developments that are competitive in price and services.

As shown by Egypt, tourism is a very sensitive sector. What's your insurance against things such as bird flu or terrorist attacks?
The [regional] tourism industry is growing at a rate of 7 per cent annually; therefore, it is the fastest growing worldwide. This trend is going to continue despite threats like terrorism and natural disasters. To grant maximum security for our guests and staff, we try to implement the latest technological features and constantly update our employees on safety issues, but in todays world, one can never exclude a terrorist attack completely.

What are your plans for the future?
We are the international market leader in the mid-scale hotel sector. We have signed up for 15 new projects in the UAE and we are heavily investing in Saudi Arabia. We are the biggest operator in Mecca; the number of tourists in Saudi Arabia is foreseen to grow rapidly to reach 10 million visitors per year. Some 1.5 billion people are looking towards Mecca every day, and wish to visit the city at least once in their life-time. The Saudi market, consisting of religious and business travellers, is still underdeveloped and we are keen to foster our position there.

What geographical regions and industry sectors (budget/mid-range/luxury) are you most bullish about and why?
We are keen to be proactive in the Arab world; being French, we have traditional relations with the Middle East and North Africa. Our growth in the next few years will mainly be  in the emerging markets, which also include China, the former Soviet Union and India. The GCC however, is a key region for our expansion plans where we will continue to develop the mid-range and economy sectors.

Middle East seems to have its hospitality recipe right
Simon Lewis, manager, eVentures, Emirates Group.

How has the hospitality sector in the Middle East region fared in the past five years?
Given its growth in recent years it clearly has the right recipe. The standard of quality and services is very competitive with other parts of the world. Dubai is built on enthusiasm and a positive entrepreneurial spirit.

The city has a unique acceptance for multiculturalism and religions, which also attracts tourism. 

Are we heading towards an oversupply of rooms?
Dubai is unlikely to face an oversupply since statistics predict between 12 and 15 million visitors per year by 2012.

What are your plans for the future?
Emirates is expanding rapidly, Dubai is a central travelling hub for both business and leisure tourists. Dubai has the natural resource of being at the centre of the world, located 14 hours from both Australia and the US.

If you really analysed the risks of doing or opening anything, youd never do anything
Yo! Sushi chairman and founder, Simon Woodroffe, unveiled at the ATM a prototype of Yotel, a three-star hybrid hotel line combining aircraft business class cabins with Japanese capsule hotels. 

Is there are gap in the Middle East market for a concept like Yotel?
No idea. Don't know anything about hotels. Fortunately, I have partners who do. Last year, I was voted one of the Sunday Times Top 10 hoteliers, and I phoned them up and said: what are you doing? I don't know anything about hotels and I haven't even got one open, and they said yeah, but you will do. So the truth is, I don't really know.

My view of Dubai is that it's absolutely in line with what I like doing, which is to do things on a grand scale. I've never been someone to look for a gap in the market. I've always created new markets. I mean, if I'd done market research and said do you want to sleep in a 10-metre room with no natural light? no one would've been interested.

So we created one and then everyone walked in and said: oh thats cool we'd like to stay here. So thats my attitude. I think if you do something new, theres always room for it in the market.

When was the Yotel concept first realized?
I remember it well. Soon after I opened Yo! Sushi, I was getting lots of column inches, and then people said: youre going to be the new Richard Branson, so I thought I'd better think of something, so I looked at hotels and I could never figure out how to do what I call the holy grail of retail, which is to give poor people what rich people have what they read about in Hello! magazine that is, luxury at low cost.

I knew there had to be a quantum leap and I could never find it for the hotel industry. People didn't want to stay in Japanese capsule hotels, but luckily enough, soon after the flatbed came out on British Airways, I got an upgrade to first class, and was lying there, and I woke up, and I thought thats what I want to do.

I wanted to take the language or business of first class travel, find the designers who did the cabin, and create a room that makes you feel like youre on a luxury yacht. And thats what I did, and we put the windows facing onto the corridors, so that instead of being a lonely place, it became the street. That was the missing link that made the whole thing work.

Are we heading for an oversupply of hotel rooms?
I think in the most oversupplied market in the world, if you came in with a completely original product, you could still win. I don't know the answer to that question, but my instinct, is that Dubai is on such a roll right now that theres quite a long way to go before you get an oversupply.  Because weve got such a completely different product, I've yet to see where this would work in Dubai. Obviously, it would work in the airport, but otherwise I don't know... weve never really looked at it or planned it for Dubai, but my partners are here, so here I am.

Why have you chosen to get involved in the Arabian Travel Market?
In terms of the hotel industry, Dubai is a major market, so stuff that happens here ripples throughout the world. Were players and were here to do just that. If youre a tennis player, you wouldn't want to miss Wimbledon.  

Tourism is a pretty sensitive sector. Whats your insurance against things such as bird flu or terrorism?
I think there are threats associated with anything that you do, in any part of the world. If you thought about that sort of stuff all the time... I mean, it comes into your decision-making, but I don't see Dubai as a volatile area. I would say there are far more unstable places in the world.

If you really analysed the risks of doing or opening anything, youd never do anything, which is why very often big companies don't. Paralysis by analysis I say. I am an entrepreneur, which means I get up and do things.

What are your plans for the future?
The top of my list says that if you want to make God laugh, show him a business plan, but I know two things: one is that weve got a really great product that were about to launch at Heathrow and Gatwick in November; two is that weve a very substantial investment from IFA hotels and resorts and they are keener than mustard for us to expand very quickly around the world.

I've never had that before from an investor they actually want to grow even faster than we do. I see no reason why we couldn't have 50 hotels in the next five to seven years very easily. A lot of it depends on the rate at which we find sites and at the moment, it's looking very good.

Is wearing five hats a challenge?
The secret I've learned is that I don't run any of them. I've got a brand name and I'm good at the creative side of businesses, getting them started and marketing them, but in a sense, I provide a service to others. I don't sit at the top of a big pyramid and it lets me stay focused.

Dubai has become a multi-destination
Saeed Al Mulla, chairman, Al Mulla Hotels Group/Ramada. 

How has the hospitality sector in the Middle East region fared in the past five years?
The travel industry is the fastest growing industry worldwide. Dubai is now a multi-destination that comprises leisure and corporate travellers.

Are we heading towards an oversupply of rooms?
There are no signs of a threat of an oversupply here.

As shown by Egypt, tourism is a very sensitive sector. Whats your insurance against things such as bird flu or terrorist attacks?
Tourism in Egypt is different to the local one; they are primarily focusing on leisure. Terrorist attacks affect this kind of tourism more.

What are your plans for the future?
Regarding our expansion strategy, we will develop both high-end and mid-range hotels in the region.

Modular growth is our insurance agains oversupply
Michael Proffitt, CEO, Logistics City, Dubai World Central.

How has the hospitality sector in the Middle East region fared in the past five years?
The growth of the tourism industry has been tremendous within the past years, and is to continue in future years. Sheikh Mohammed has set an aggressive target of 15 million visitors by 2010.

Are we heading towards an oversupply of rooms?
A potential oversupply will not affect us, since Dubai World City is an evolutionary project which will grow according to demand. It, therefore, comes down in phases. It is a corporate venture that works without government funding.

As shown by Egypt, tourism is a very sensitive sector. Whats your insurance against things such as bird flu or terrorist attacks?
We will grant very tight security at the airport and we constantly train ourselves on the latest developments and keep track of what other main airports are doing.

What are your plans for the future?
The Dubai World Central International Airport will encompass between 120 million and 150 million passengers a year. Dubai Airports capacity stood at 25 million passengers in 2005. The project, which will stretch around 140 square kilometres, will feature residential, commercial, leisure, hotel and labour camp developments aimed at the people working at the airport.

The three labor villages will be within the compound to minimise travel time. All parts of the project will be interrelated. The runway is already under construction; the first cargo flight will take off next year and in Q1 2008, passenger flights will start.

GCC is fast becoming an important growth market for Germany
Ms Heike Murad, manager, GCC states, German National Tourist Board.
The growth rate of travellers coming from the GCC to Germany reached 26.7 per cent last year, the highest among all nations. Currently 1.2 per cent of all visitors come from the GCC, but this number is [set] to grow fast. Traditionally, Arab guests used to travel mostly to the US and UK; this is changing now and they are increasingly interested in Central Europe and Germany.

Their favorite destination is Munich in Bayern, a German province close to Switzerland and Austria that is famous for its beautiful greenery. The biggest market is Saudi Arabia with 50 per cent of all travellers coming from the Kingdom. The UAE and Kuwait account for 21 per cent each. Germany, which hosts the football World Cup this summer, is expecting an increase of one million guests and an extra 50 million overnight stays due to the event.

Huge demand negates the threat of an oversupply
Antonie Yazbek, president, REFAD Hotels and Resorts.  

How has the hospitality sector in the Middle East region fared in the past five years?
The hospitality industry in the Arab world is an $800 billion industry, half of which is in Dubai at the moment.

There is a strong demand and we are witnessing lots of new developments in hotels and tourism infrastructure on account of that.

Are we heading towards an oversupply of hotel rooms?
Not in the near future. As I said, there is a strong demand and Dubai, for example, is emerging as a major hub for the industry.

As shown by Egypt, tourism is a very sensitive sector. Whats you insurance against things such as bird flu or terrorist attacks?
Tourism is not as sensitive a sector as some people believe it to be. We believe that the Middle East region is secure, and as an industry, tourism has evolved over the years and has learned to cope with minor setbacks, if there are any.

What are your expansion plans for the near future?
We have just announced our new project in Dubai; we are also developing The World island just off the coast of Dubai. Additionally, there are other projects planned in other GCC states and Europe.

What geographical regions and sectors are you most bullish about and why?
At the moment our efforts are in the luxury segment, thats where the growth is at the moment and where we believe we have a strength. As the mid-segment develops, we want to be there as well, we currently are observing its evolution.

Being environmentally sensitive has its own advantages
Lee L. Tabler, CEO, Tourism Development and Investment Company,

Abu Dhabi.Are we heading towards an oversupply of rooms?
Our aim is to support the [Abu Dhabi] crown prince to achieve his goal of increasing the number of hotel rooms in the capital. The current occupancy rate of rooms in Abu Dhabi is at 96 per cent, and we have limited rooms available. Over the next five years, there will be an additional availability of 17,000 rooms.

What are your plans for the future?
Abu Dhabi does not want to compete with Dubai, but complement the countrys tourist activities. Lower densities combined with environmental friendliness are the key factors of our approach.

We will also provide cultural tourism, since Abu Dhabi hosts 5,000 year old archaeological sites, 200 natural islands and ancient desert reservoirs which will be preserved.

Abu Dhabi is also expanding and modernising its airport. In the short run, the city will focus on leisure tourism, but eventually business travellers will catch up. Today, the oil and gas industry is predominant, but the services industry is foreseen to incline fast.

What geographical regions and industry sectors (budget/mid-range/luxury) are you most bullish about and why?
In our tourism developments, we are targeting family guests (three to four-star) and the luxurious five-star market, which will feature exclusive desert and mountain spa resorts. In Abu Dhabi, all developments need to undergo an environmental impact study. Resorts must be designed to have a minimal negative impact on the ecosystem, while marine and bird life must be protected. Sheikh Zayed was very environmentally sensitive and so is the crown prince. European tourists prefer ecologically-friendly resorts; Abu Dhabi has initially targeted UK and German visitors. 

Theres space for more in the skies
Andrew Cowen, CEO, SAMA Airlines.

Do you think there is space in the regional aviation industry for a new player?
Yes, definitely. We wouldn't be here otherwise. If you look at a market like the UK, there is a population of 65 million and more than 220 million people fly through it each year. We are nowhere near those figures now in the region. Saudi Arabia has a population of 26 million and only 16 million passengers currently. Theres vast potential in the region waiting to be tapped.

How are you going to compete with Saudia?
SAMA is a budget airline; we plan to concentrate our services within the Kingdom before flying to routes abroad. Our rates will be cheaper and we will offer better connectivity than what Saudia is currently offering. Typically, our rates will be between the $90-$95 range.

When do you start service and how many planes do you have?
We plan to be operational by September of this year. We will start with five to seven planes and will expand our fleet to 30 by 2010.

By when do you plan to fly internationally?
I would tentatively put it around 2008. We will start with the neighbouring GCC states, like Egypt.

Who are the main investors of SAMA?
Investment Enterprises of HRH Prince Bandar bin Khalid Al Faisal and 29 other investors. 

Being politically neutral has driven the UAE's economic growth
Saeed Al Mulla, commercial director, Sorouh.

Are we heading for an oversupply of hotel rooms?
At least in the short term, we know there is a shortage of supply in both hotel rooms and smaller residential units. We have noticed a growing demand in tourism in this region and this has been driven by the security of the UAE and the high amount of liquidity present in the market due to high oil prices.

All you need to do is provide the infrastructure for this industry because the potential is there. An enormous effort also needs to be put into promoting this region as a tourist hub. To a certain extent, we have succeeded.

How has the hospitality sector in the Middle East region fared in the past five years?
I believe it has exceeded expectations. The  shortage in the hotel facilities demonstrates this. Usually, developers such as us plan ahead of time anticipate demand based on certain factors and our estimates were lower than the actual, so yes, it has succeeded.

As shown by Egypt, tourism is a very sensitive sector. What is your insurance against things such as bird flu or terrorism? 
The precautionary measures that the UAE government has taken and their efforts to promote this region as a safe haven for investors has protected the tourism industry. I believe the ruler is wise enough not to get involved in the political conflicts in the surrounding regions.

The UAE has always been politically neutral and that is the main force that you see behind the economic growth in the country. At the end of the day, conflict gets no one anywhere.

What are your plans for the future?
We have launched a mega project in Abu Dhabi a 14 million square foot self-sustained community and city called Shams. This is our flagship project, but we do not aim to stop there. The real estate market in Abu Dhabi holds great potential. This is why we are focusing on the short term here, as opposed to other areas.

We have a number of mega developments planned, such as Lu Lu Island, a 50 million square foot development near the Abu Dhabi corniche with a leisure and entertainment focus. In the meantime, our hands are full, but we are considering other projects and will announce them in due course.

Which industry sector(s) are you most bullish about?
I tend to believe that there is a shortage of low to medium income accommodation available. Most developers have focused on the luxury market, but I think this is going to change, if it hasn't already, because the market is demanding it.

I think you'll see a shift amongst developers, who will start building affordable properties and hotels. We can not just depend on high income people to sustain this country. We are seriously looking into this.

Competition is becoming very tough as more developers come into the market; so one has to distinguish oneself by offering solutions that have not been offered thus far.

Egypt is a safe country for tourism
HE Zoheir Garranah, minister of tourism, Egypt.

Politics in the region seem to be holding tourism in Egypt to ransom. How are you coping?
Egypt has a lot to offer tourists. We are a safe country, the aim of terrorists is to destabilise the tourism industry. You can see that these acts have failed to affect our tourist inflows and we are going ahead with many more projects to reach our maximum potential.

Historically, tourism in Egypt has concentrated along the Nile and the Pyramids. Recently, we have started to see a change to the Red Sea coast what is the logic behind this move?
Much of our tourism is still centred on the Nile and the Pyramids. We have started to tap into the huge potential along the Red Sea coast as a diversification, to increase the number of destinations and activities on offer to visiting tourists. We are seeing a lot of foreign investments in this area and it's developing rapidly. For most of us, the first thing that comes to mind when we think of Egypt is the Nile and the Pyramids; we want to broaden that to include the Red Sea coast.

How do you think the rapid tourism growth in Dubai, Oman and Bahrain will have an impact on Egypt?
We see this as a good development, I am pretty sure that this will have a positive impact on the region as a whole. There will be more interest in the region resulting in an increase in tourism numbers, furthering development for the entire area.  

Getting a visa for most South Asian and East Asian visitors has created a bottleneck in the system. How have you changed this scenario?
This issue has been addressed as we have now changed our visa rules. If you are a tourist from any part of the world coming to Egypt as  part of a tour group, you will be issued a visa on arrival. 

How open is Egypt to FDI in the tourism sector?
We are as open as anyone can imagine. There are no restrictions in theory, technicality or practise. We welcome everybody to come and invest in Egypt.

Dubai will be our new launchpad
Roeland Vos, president, Starwood Hotels and Resorts EMEA. 
With the recent acquisition of the Le Meridien chain, Starwoods portfolio of hotels in the region has grown to 48 from 25. In the UAE alone, the number of Starwood properties jumped from 7 to 19 hotels. Roeland Vos, president for Starwood Hotels and Resorts in Europe, Africa and the Middle East, says that the reorganisation entailed changes in its operational structure by bifurcating its Middle East and Africa operations. With an impressive 21 per cent growth in revenue per available room (revPAR), the Middle East region was the top performing tourist region in the world during 2005 for the second year in a row, said Roeland. He added: Dubai, where the hotel industry is witnessing a phenomenal growth, is our new regional headquarters and the launchpad of our regional expansion.

In Dubai, the latest project announced by the group is the W Hotels Worldwide, a 350-room luxury hotel at Dubai Festival City the brands first Middle East property. In the Middle East, our strategy is based on expanding and diversifying Starwoods regional brand portfolio in key growth locations, and the recent acquisition of the Le Meridien brand worldwide will help in our expansion and diversification strategy, he said.

But he does not agree that the current regional boom spearheaded by Dubai is to end, saying Starwood sees a long-term prospect for the region as a whole and for Dubai in particular. Starwood group has 14 projects, including five in the Middle East and 250 deals in the pipeline to ensure that the brand sustains its growth.

Starwood operations in the Middle East have witnessed a phenomenal growth with a 100 per cent portfolio rise,said Guido De Wilde, Starwoods vice-president and regional director for the Middle East. The regions dynamic development including the unprecedented economic boom and high population growth rates, along with its emergence as a major business and leisure destination make it an attractive growth opportunity for us, he concluded. 

Private jets are the future of business travelling
Caron Gledhill, director of Sales and Marketing, Elitejets.
Figures of the executive flight services say that the private jet industry grew by 75 per cent in 2004/2005.

This trend is expected to continue in 2006/2007. The general economic environment, booming real estate and tourism are the main drivers for this. Being Dubai-based, 70 per cent of our operations are corporate flights. We also assist in the sales of planes, which are growing since private jets are getting more affordable and finance options more advanced. Many big, local companies have their own jets now.

Furthermore, jets are great assets since they do not loose their re-sale value due to their limited manufacture number. Private jets are the future of business travelling, since costs are getting more reasonable and, most of the time, are the same or even less than flying the equal number of passengers on a first class ticket. In the more mature markets in Europe and the US, private jets are now heavily used for corporate events. We did not change our rate despite the soaring oil prices since we operate mainly regionally and hence pay regional oil prices.

Emergence of Dubai is not a threat for Hong Kong
Sue Whitehead, regional director, EMEA, Hong Kong Tourism Board. 

What levels of growth has Hong Kong seen over the past years? What are your targets?
Hong Kong had 23 million visitors in 2005; this year we are expecting 27 million visitors. We are launching a worldwide campaign this year called Discover Hong Kong to attract travellers from around the world.

Is there space in Hong Kong for this pace of growth?
It's a popular misconception that Hong Kong is all about tall buildings and crowded streets; only 30 per cent of the city is like that. Over 70 per cent of it is untapped countryside. Hong Kong consists of over 250 islands. We are nowhere   near our  full potential.

How has the opening up of China affected Hong Kong you used to be the gateway to China, but now Chinese cities themselves are emerging as hubs, overshadowing Hong Kong. How do you intend to compete?
Hong Kong plays a vital role in Chinas growth. We are still the gateway and a lot of business in China is still done in Hong Kong. With the Olympics in 2008, you will notice that Hong Kong has a lot to offer China in terms of flight connections and hospitality. There are a lot of Mainland Chinese visiting Hong Kong as well, particularly families after the recent launch of Disneyland.

Does the emergence of Dubai affect Hong Kong?
Dubai, just like Singapore is a hub. Each has its unique selling points and I believe that this will result in good business for everyone. There will be better flight connections and more choices for consumers. 

Low-cost airlines have stimulated the aviation industry
Adel Ali, CEO,  Air Arabia.

How has the aviation sector in the Middle East region fared in the past five years?
The aviation sector in the Middle East has been boosted due to high investments. It grows at a double-digit rate annually; aircraft orders are bigger than anywhere else in the world. This trend has been going on since the last five years and is to continue for at least three more years.

The launch of new airlines, economic growth and major business developments have been the key drivers of this progress. Air travel has become part of everyday life for people in the Middle East. Airports have also increasingly liberalised their flying rights.

What impact has the rising fuel costs had on the industrys fortunes?
High fuel costs are a challenge for everybody in the transportation industry, including cars, ships and planes.
 
High jet fuel costs are particularly challenging when demand is rising. The issue affects all airlines. Parts of the costs have been passed onto the passenger, but they have also definitely impacted revenues and profits.

It is difficult to predict the future of fuel costs since they are defined by a number of factors. Between the politician and the fuel trader is someone who benefits from this.

How has the introduction of low-cost/budget airlines changed the industry?
The introduction of low-cost airlines has stimulated the industry; it enlarged the size of the market. It is beneficial for the market and the costumers who can travel more frequently now. We are currently the only budget airline in the Middle East, but we are welcoming competition which will enhance the costumers knowledge on the low-cost air travel business.

What are your plans for the future?
Last month, we launched two more destinations to India, we are the first to fly to Kabul [Afghanistan] now and we also started flying to Istanbul [Turkey]. After the summer, we will launch more flights to Asia.

What geographical regions and industry sectors (low-cost/ economy/ business) are you most bullish about and why?
We are looking at all destinations within four hours of travel time from the UAE. Most African destinations unfortunately have very restricted landing rights.

When considering new routes, we look at the figures. They are either new destinations nobody flies to or very busy ones that need more traffic. They are either holiday destinations, UAE expatriates hometowns, or cities important for business travellers. We will stick to our business model, which encompasses low-cost and budget air travel.  

The key is to get the product and price right
Chris Moloney, CEO, InterContinental Hotels Group, Middle East and Africa.

Are we heading towards an oversupply of rooms?
The local market is still underprovided which might tempt many operators to come here and create an oversupply. This happened in Singapore in the 1980s and is a common phenomenon in the hospitality industry. It is therefore essential to offer the right product at the right price and be flexible to meet the local demand.

As shown by Egypt, tourism is a very sensitive sector. Whats your insurance against things such as bird flu or terrorist attacks?
Security is a major concern for us, so we advise our hotel owners on how to constantly update their safety features. In our times, it is a constant threat we have to deal with.

What are your plans for the future?
Regionally, all our brands will increase as a part of our expansion strategy into all emerging markets.

What geographical regions and industry sectors (budget/mid-range/luxury) are you most bullish about and why?
In the GCC, an extremely important region for us, we are targeting the upscale and economy sectors. We are launching the new Express by Holiday Inn mid-sector hotels throughout the Gulf by 2007. 

Dubai is the city of the future, but it lacks a real heart
Roberto Lambicchi, deputy director of tourism, Lombardy. 

Dubai is pushing to establish itself as a major travel destination. Why are you confident of luring tourists from the region to Lombardy?
People who live in Dubai see it as a place of work. So, for a holiday, they must leave the emirate to feel relaxed. The reasons are these: firstly, people are curious, and secondly, we attract those who wish to live a certain standard in the Middle East and expect their holiday destinations to measure up accordingly. We also have an abundance of attractive features from the mountains to the snow, lakes and rivers that you don't have here.

As shown by Egypt, tourism is a very sensitive sector. Whats your insurance against factors such as bird flu or terrorism?
Fortunately, this is to our advantage because unlike the US or Arab states, terrorism isn't a danger in Lombardy. We don't see it as a threat. At the same time, we have a police force that is working very hard behind the scenes. We also have a well-integrated Arab community in our region. In Milan, 10 per cent of the population is Muslim, which gives people from the Middle East an affinity for our country. We are very tolerant of other cultures.

The pizza makers in Milan are Egyptian; the bread makers are largely Moroccans or Arabs. Although terrorism isn't a direct threat, open communication amongst all nationalities is encouraged throughout the region, which goes a long way to diffusing potential problems that might occur. On the whole, fear is not something one experiences when visiting Lombardy, and we feel that this is to our definite advantage.

What are your plans for the future?
Industrial production is dropping, so tourism is needed to fill this gap. The area is increasing its hospitality sector, in terms of services such as catering. We are making a huge effort to pull together public and private resources to increase the quality and the quantity of persons visiting from abroad. As demonstrated by our presence at the Arabian Travel Market 2006, we have entered a new phase and are actively promoting tourism in Italy.

To be considered is the fact that Lombardy, in particular Milan, for many years has been very well known for its industry. We are now working very hard to transform this perception of Lombardy as a very nice place to visit as well.

Which tourism industry sectors are you most bullish about and why?
The answer is quite clear. We are offering quality, high-level tourism. In terms of five-star hotels, we now have 100. This is the kind of tourist were catering for. We are leaving the door open for the others, but this is our main target.

Whats your impression of hospitality in the Middle East? Youre developing too many buildings. Dubai is unique, it's the city of the future, but it's lacking a real heart.
It lacks personality that is created when a person walks the streets freely, such as New York. I hear Ras Al Khaimah is beautiful and it's my hope that the city doesn't fall victim to modernisation entirely, but preserves its traditional history.

© Gulf Business 2006