After a difficult year for tourism in 2009, particularly in terms of foreign visitor arrivals, the recovery in the sector in the latter part of the year has continued into 2010. In Abu Dhabi in the first four months of 2010, there was a 16% year-on-year (y-o-y) increase in tourist numbers to over 620,000 (including strong domestic tourism). In Sharjah, 402,000 tourists stayed in the emirate’s hotels and apartments in Q110, a rebound of just over 9% y-o-y. In Dubai, although final data on arrivals for 2009 is still pending, there is some evidence that last year’s downturn may have bottomed out in the early months of 2010.
Despite incomplete 2009 hospitality sector data, press releases indicate a tentative recovery in occupancy rates and revenue per available room at some of Dubai’s hotels in Q110. After a rebound in Q409, data from Abu Dhabi for January-April 2010 show over 1.68mn guest nights, up by a healthy 10% y-o-y. In April, tourist numbers rose by 12% y-o-y, with arrivals from two key source markets, the UK and Saudi Arabia, up by 23% and 24% y-o-y respectively. In Sharjah, data for Q110 show that the total number of occupied room nights in hotel establishments rose to 414,700, an increase of nearly 8% y-o-y. The overall occupancy rate was 70%, a slight increase from Q109.
Our growth estimate for arrivals in 2009 remains unchanged at -4% y-o-y, or 9.11mn visitors, although we await more recent data on arrivals to Dubai for H209. A relatively strong recovery in arrivals growth is anticipated in 2010, with growth also picking up slightly in 2011 and 2012. These forecasts are based on economic recovery in major source markets, with the eurozone tentatively emerging from recession in 2010 and growth there edging up to 1.8% in 2011, while for the Middle East we forecast a relatively strong rebound in economic growth from 2010.
The Dubai-based Emirates Group recorded net profit of AED4.2bn (US$1.1bn) in the financial year ending March 2010, up by a significant 248% y-o-y. Passenger numbers increased by over 20% compared with a year earlier.
The flag carrier of Abu Dhabi, Etihad Airways, recorded a sharp slowdown in passenger traffic growth in 2009 to just 5% y-o-y (far short of its target) to 6.3mn passengers. The traffic figures for Q110 show that passenger numbers increased by 11% y-o-y during the quarter.
In Q110, Air Arabia, based in Sharjah, served 1.03mn passengers, an increase of 9.2% y-o-y. Air Arabia and the Tantash Group, based in the Jordanian capital Amman, announced a joint venture agreement in June 2010 to launch the first low-cost carrier based in Jordan.
Airport Passenger Traffic
At Abu Dhabi International Airport, after very strong growth in passenger traffic in 2007 and 2008, there was a moderation in growth in 2009, with numbers up by 7.5% y-o-y. In Q110, however, there was a rebound, with passenger numbers rising by nearly 14% y-o-y. Despite the tourism downturn last year, Dubai International Airport recorded growth in passenger traffic of just over 9% y-o-y, similar to 2008, with a total of 40.9mn passengers after growth recovered in the latter part of the year. Figures for the first four months of 2010 show stronger growth of almost 19% y-o-y.