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Tourism and Air travel Industry in the UAE

In the next statement we highlight the market of the UAE and analyze its way to obtain capital. We look at the various resources of income for the Emirates and what role does indeed Tourism and Airlines industry play in the oil-dominated UAE market. We also discuss the UAE market prior to the financial crisis and exactly how it doing in the international market again, concentrating on the Tourism and Airlines industry in UAE. We then discuss the aftereffects of the financial meltdown on the complete UAE economy and how it affected the Tourism and Airlines industry that happen to be slowly turning out to be major revenue generating market sectors for the UAE. As all the industries in any economy are interlinked, so can be the Travel and leisure and Airlines establishments with all the other major industries of the UAE market and so not only the direct influence of the financial crisis, but also the cumulative impact needs to be regarded as. These two establishments thus are afflicted by the effects of turmoil on other industries of UAE and also of the whole globe and specific countries as the customers of the two sectors are usually from abroad. Considering the brighter area, we review the opportunity of the Tourism and Airlines sectors in UAE as the financial crisis phases passes out and what new leads do these market sectors have in the post crisis time. Finally we conclude the survey by giving the recommendations for even more growth of the two industries predicated on the examination conducted. Source of information is provided in the end.


United Arab Emirates (UAE) was set up by joining the tiny kingdoms of the Middle East. Thriving of its essential oil based economy; it has also emerged as one of the fastest growing and most desirable tourist vacation spot. United Arab Emirates (UAE) is one of the quickest growing economies of the world with GDP development of over 9. 4%. The market is dependant on varied aspects like energy usage per capita, GDP per capita, etc. The GDP of UAE relating to 2008 gross annual statement is 270 billion US us dollars which is 3rd highest in Midsection East and positioned 38th around world.

UAE's Market:

Before addressing the financial meltdown it is important to know the framework of the Dubai's market which is one of the very most unique and unusual on the planet. It is split into free zones set up by the federal government of Dubai. The zones are industry specific with Jebel Ali free zone being the most effective growing in the entire world. The zones give you a group of products and services such as: ready to use offices, Business centers, factories, Warehouses, infrastructure ready plots etc. Jebel Ali free area commonly known as JAFZA is an integral part of Dubai based; a state owned free zone. It is one of the world's biggest creators of Economic Areas, Logistics and Research and development powered Industrial Parks. The main free zones of UAE are Jebel Ali free zone, Dubai Internet City, Dubai Mass media City, and Dubai Maritime City which derive from the industries they can be related with.

People have incorrect misconception about UAE's current economic climate; they believe that it's mainly motivated by coal and oil. Cleary from the information we can easily see that the essential oil sector consists of significantly less than 6% market of Dubai that was generally dependent on olive oil as a main source of earnings before. Although it is true that Dubai's market was at first build on the income produced by its reserves of olive oil and natural gas but with time the engine oil reserves have reduced significantly and also to keep up with the income, it includes concentrated on the tourism industry to generate good revenues. Other Emirates are doing the same and since essential oil and natural gas reserves are limited, UAE designs to harness the strength in its travel and leisure industry.

All the Emirates realize the future scope of travel and leisure industry and also have also committed to their tourism industry and the airlines industry so as to generate foreign cash in UAE. Dubai which is the most well-known Emirate, has managed to convert into a gigantic and amazing metropolis offering luxury and modernity from a mere desert in few generations. Another large contributing sector of Dubai's economy is the true estate which forms 22. 6% of the economy of Dubai. The fantastic success of this industry is owed to the focus on tourism. Though this sector keeps growing in the complete UAE, it still needs to capture up in other Emirates around it is at Dubai. The air travel industry, which is vital considering the overall economy which invests in tourism for its bright future leads.

National Airlines of the UAE are:

Emirates Airlines: completely possessed by the Dubai federal government.

Etihad Airways: National Airline of UAE set up in July 2003.

The major airfields in UAE are Abu Dhabi, Al Ain, Dubai, Sharjah, Ras Al Khaimah and Fujairah.


Dubai, which is the most popular emirate of UAE, is now one of the latest places for shopping, trading and travel and tourism industry. The factors which effect tourism for just about any country are the following: Infrastructure, Safety and security, Cultural and natural resources, Health and hygiene; Air, ground and sea transfer, tourism policy and regulations, Information and Communication. Profits of around AED98. 6 billion in the fiscal season of 2006 are projected to reach AED170. 7 billion by the entire year 2016 thus playing a crucial role throughout the market. World Tourism and Travel Council (WTTC), a regulatory and research body for world travel and leisure ranked UAE 18th (world ratings) considering international tourism. The importance of tourism is plainly observable in UAE's GDP show which is 19%, 5% greater than the UK and 7% than the united states. Over time the federal government of UAE has concentrated largely on travel and leisure they have spent large capitals to be able to market their tourism in the process they have got built sky scrapers, clean and well knit network of streets. The government has centered on providing world class facilities, along the way creating architectural designs and properties which attracts holidaymakers from all around the world. As the real house industry is strongly related to the tourism industry it has developed as a major industry in United Arab Emirates and contributes greatly to its current economic climate. From the facts mentioned above it can be ascertained that there has been a switch in UAE's current economic climate from being only dependent on engine oil to development of other areas utilizing the huge amounts of money from the petrol to development of other areas like tourism. The advantages such as strong economical expansion and the centralized location coupled with a very vibrant leadership have backed the investments created by the UAE in the Travel and leisure Industry. Aviation industry in the Middle East makes up about around 20% of their GDP. Tourism industry thus performs a significant role in the UAE current economic climate as Air travel industry, which assists as a complimentary industry to it has such a huge share in its GDP. The capacity that the Air travel Industry of UAE offers when compared with its counter-parts is a lot higher hence income generated is also high as far as the comparison percentage is concerned. A fleet greater than 500 aircrafts and around 250 more are about to be added. The consolidation of the Flight Industry in the centre East must go quite a distance and its show in the country's market is for certain to rise.

Major Airlines in UAE

Etihad Airways:

Etihad Airways is the nationwide airline of the UAE and it is owned by the government of Abu Dhabi which is one of the very most famous Emirates in the UAE after Dubai. Were only available in November, 2003 its first airfare was to Beirut. Since that time Etihad has come quite a distance and set up itself among the most famous luxurious airlines. Etihad is yet to grow its business as it lands only in Abu Dhabi from various countries of the world. Its major destinations are: Beirut (Lebanon), Amman (Jordan), Damascus (Syria) and vacation spots beyond the center East such as Indian sub-continent, USA and UK.

Emirates Airlines:

One of the fastest growing airlines in the world and victor of Global Airline of the World Prize, Emirates Airlines is continuing to grow big and bigger since its create in 1985. It is a part of the Emirates Group which is owned by the Government of Dubai additionally it is a National Air travel of the UAE. Dubai national international airport has dedicated a terminal for Emirates Airlines and its own operations. Emirates Airlines also actively participates in sponsoring various celebrations and sporting events in UAE.


UAE is a great destination to be seen by the vacationers in the past ten years. The Emirates has been working very difficult to become the centre of international finance and trading. . Higher level sports, resorts and luxury hotels has built its modern before times image. The major sites appealing are Palm Islands, World Islands, Burj Al Arab hotel (the first seven star hotel to be build), Burj Dubai etc. Dubai is now one of the hottest spots for shopping, trading and travel and travel and leisure industry. UAE's federal government realizes the near future scope of travel and leisure industry and has also committed to the same so as to generate foreign profit UAE just like Dubai. The health of the aviation sector in addition has been encouraging. In last ten years the utilization of flights has increased at the pace of 7% per year. Exploring for both business and leisure activities have grown drastically around the world. Middle East Airline Industry is known of its hospitality and leisure air travel and therefore has had the opportunity to attract tourists as well as shareholders from across the globe. The travelling credited to business purposes has also increased due to globalization (i. e. international development in terms of demand, supply, production and customers). The rapid growth of international direct investment plans and world trade also offers contributed to upsurge in going. UAE has many free trading ports and hence travelling credited to business and trade has seen exponential rise. Serving as a trade middle for the world, UAE loves its economy's expansion by giving such helps to the key industries. For example: air travel revenue produced from connection between the several trade zones ant the source and the marketplace. UAE thus relished the booming improvement made on the huge income made by the essential oil and associated sectors and injected its revenues in the Tourism and Real Estate sectors, witnessing it as a major source of income in the foreseeable future and the final results were as per plans before financial crisis hit UAE.


The rapid development of the UAE was due to the concentration of the federal government on tourism thus promoting the real estate sector by making use of revenues coming from export of olive oil and gas. With the major real house company of Dubai Emaar properties becoming bankrupt in america and vaDubai proposal to delay the repayment of most its debt's for an interval of six months on November 26, 2009 the financial meltdown in Dubai was revealed in front of the planet which used in the whole UAE and other Emirates. The debts were as large as $59 billion causing a stop to the investment pattern of Dubai for six months. UAE was capitalizing on Dubai's growth but the financial crisis emerged as a impact to the UAE. The Dubai's real estate business and tourism was based on huge loans which they likely to pay through the earnings they earn from them but with downturn hitting the industry terribly their programs failed. In the early amount of global financial system UAE's financial structure, dynamic structure and tourism companies and relished free of tax incentives appeared to be a great benefit for this and many people even expected it to stay free from any sort of recession. A significant factor that created this illusion in the thoughts of folks was the continuance of investment activities and construction at a feverish tempo even when there is too little capital in every other parts of the world. Dubai which is governed by Sheikh Mohammed Bin Rashid Al Maktoum borrowed approx 80 billion US Dollars in a period of 4 years of construction for booming the building market of economy of regional travel and leisure as their main concentrate was on travel and leisure as they expect that it would lead to a concrete income source for them even though their petrol reserves get exhausted. Emirates suffered a huge loss in the world's steepest property slump as a result of global downturn. The home prices fell by 50 percent from other value in 2008 leaving Dubai in a situation where they were unable to generate adequate money in order to repay the obligations that they had taken in order to market the travel and leisure industry. This was surely to follow in the other Emirates if the UAE.


The global financial crisis in UAE during 2008-09 resulted in major downfall of Dubai's market. It led to slow down of the economy of UAE, adding brakes to its speeding overall economy. The economic income generated was not coming as useful as before which greatly hindered UAE's progress and as most of its strategies were predicated on money borrowed by investment companies and there have been no plans to handle any downturns throughout the market it became problematic for them to repay that loan. As the primary goal of UAE's overall economy was the tourism industry a slump in the global market segments was always destined to have an impact on the economy of Dubai. Additionally the UAE current economic climate and its important industries such as Airlines Industry and Tourism Industry, on which UAE hopes to be dependent highly in forseeable future, are governed by the government which does not encourage the international investors and therefore option of lone was a tough task at the time of recession. Emirates (federal government owned group) endured a huge loss in the world's steepest property slump as a result of global tough economy. The house prices lowered by 50 percent from other value in 2008 departing Dubai in times where they were unable to generate adequate profit order to repay the debts that that they had taken in order to promote the real estate and the tourism industry. The international investment of Emaar (real property and Construction Company of Dubai) claimed to be the second largest contractors in USA. They ultimately travelled bankrupt because of the recession and / or filed for chapter 11, that allows reorganization of a company under the laws and regulations of bankruptcy for United States. The personal bankruptcy of Emaar properties was a major shock for folks about the world and even bigger for people in Dubai and of UAE as it acted as a hint of the financial meltdown that had started in UAE which was considered to be one of the flourishing economies of the world. Dubai, Abu Dhabi and other Emirates to check out have built one of the finest infrastructures of the world which is quite natural for buyers to be enticed towards such a location which lead to the initial success of UAE in a period when the globe was facing tough economy and lacking assets but its overdependence on debt caused the financial crisis.


Although UAE suffered with a financial crisis there are still possibilities that it'll get over this problems. Abu Dhabi the administrative centre of the United Arab Emirates which is also the richest country of the United Arab Emirates is the brightest ray of expect UAE and Dubai. Dubai has recently asked Abu Dhabi to bail it from the crisis. The hope even enhances as Abu Dhabi has helped Dubai before when Dubai was in Crisis but the demand is much higher than days gone by. A recent survey by HSBC which says that Abu Dhabi has the cash liquidity to support its companies and lenders is even more positive response as Dubai's perspective. International Air Transport Association (IATA) has forecasted that despite the post financial meltdown period, the international air industry is expected to increase by around 6. 6%. UAE too will love some expansion but like India, Midsection East is also a highly regulated market and administration plays an essential role in main sectors such as aviation. This de-motivates the international investors and hence consolidation is slow. There exist strategies to extend the flight industry and so also the travel and leisure industry. These strategies are given with great support from the individual governments. Dubai has surfaced as a significant tourist area and competes with the best tourist destinations round the globe. This means that as the tourism industry regains its pace immediately after the recession, places like Dubai will benefit the most.


Analyst said that the primary reason behind the financial crisis in Dubai was the mismanagement of the resources. UAE spent all its riches in the true house market in United Status (via their companies such as Emaar) and possessed no plans to cope with any types of shocks faced in their road to success such as tough economy. UAE was too optimistic and thought that it could never be stuck with any sort of recession that was a result of lack of adequate planning bad phases during their trip. Considering just Dubai, the debt were as large as $59 billion leading to an end to the investment pattern of Dubai for 6 months. The Dubai's real estate business was predicated on huge loans which they likely to pay through the revenues they earn from them but with downturn striking the industry terribly their ideas failed. Thus the UAE's financial crisis to a huge degree can be said to be a rsulting consequence real house bubble burst in Dubai. With all the U. A. E central lender showing positive symptoms by confirming that its panel has discussed plans for supporting travel and leisure business by loaning Dubai as well as staying United Arab Emirates has increased the probabilities of recovery for Dubai and the UAE to a great extent. The advantages such as strong economic progress and the centralized location in conjunction with a very vibrant leadership have backed the investments made by the UAE in the Tourism Industry.

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