Tourism in the UAE was at an all time high in 2022. Last year Dubai received 14.36 million international overnight visitors, a growth of 97% from the 7.28 million in 2021, according to the latest data from Dubai’s Department of Economy and Tourism (DET). Dubai exceeded the expectations on both global and regional barometers of recovery. Tourist arrivals in 2022 reached 86% of pre-pandemic numbers.
His Excellency, Helal Saeed Almarri, Director General of Dubai’s Department of Economy and Tourism, said: “Aligned with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to make Dubai the world’s most visited and re-visited destination, the performance of our industry in 2022 shows the extraordinary progress made by the city over the past two years.” He adds, “The robust performance is a testament to Dubai’s growing role at the vanguard of global tourism recovery. The positive momentum also shows that tourism remains a significant contributor to the city’s economic growth and sustainable development, further driving the goal of the Dubai Economic Agenda D33 to reinforce Dubai’s status as one of the world's top three cities for tourism and business.”
The impressive performance of Dubai’s tourism in 2022 highlights the key growth indicators in traditional tourism markets and emerging markets. This, in turn, provides relevant information on investment opportunities in the country’s tourism industry.
Tourism boosting growth in Dubai’s residential market
The growth of Dubai’s tourism industry has impacted the real estate industry. As more of the world's wealthy are choosing the UAE as their destination for both vacation and business, it is not surprising that the demand for high end properties has likewise increased.
Dubai is currently home to more than 67,000 millionaires. The number is expected to grow by 52% in the next ten years as more the ultra-rich move into the region. With this movement comes the demand for residences for purchase or for rental.
Knight Frank projects a 5-7% in Dubai’s mainstream residential market for 2023, a similar growth track that was seen in 2022. Faisal Durrani, head of Middle East Research, said, “For prime Dubai, prices are likely to end the year around 50% higher than 2021. Supply is the other critical factor in our 2023 outlook, with just eight villas in Dubai’s prime precincts expected to be delivered by 2025. Developers have not responded to the buoyancy in demand as we have seen in past cycles. With supply remaining limited and demand for luxury waterfront continuing to strengthen, our 2023 prime residential forecast of 13.5% is supported by a clear demand-supply imbalance as well as a positive economic backdrop. Indeed, the UAE is expected to have one of the world’s fastest growing economies in the world in 2022. A return to steady and sustainable growth will instill confidence in homeowners and investors alike.”
Prime residential prices in Dubai especially for locations such as the Palm Jumeirah, Emirates Hills and Jumeirah Bay Island are predicted to have strong growth in prices globally.
According to a new research also by Knight Frank, demand for branded residences is surging. These are luxury homes that combine the benefits of new developments with an upscale hotel or resort. Six Senses in Dubai, for instance, has launched its first UAE hotel and branded residences. On the Western Crescent of Palm Jumeirah island are 162 residences that stretch along a private beach.
Dubai as strategic capital for HNWIs in digital and financial space
When the subject of purchases and travel comes up, fintech is never far behind. Why? Because the purchasing habits of customers almost always involve digital payments. Worldwide transactional value of digital payments in 2022 reached $8,488 billion, according to a report. In the UAE, digital transactions were valued at $26.28 billion last year. This trend is set to continue, with the number of users in this segment projected to reach 7.90 million by 2027.
It is not just in digital payments where tourism and fintech meet. Practically everything to do with tourism these days involves the use of gadgets, apps and software - from booking airline tickets, to hotels or AirBnb, to taxis, just to name a few. The digital space is crucial in making vacations and travelling happen.
The business opportunities for HNWIs in the digital space are limitless. According to Fintech News Middle East, the UAE is home to the largest fintech ecosystem in the Middle East and North Africa (MENA) region. Solid government support has enabled the growth of this sector by encouraging innovation and digital adoption in the financial services industry.
This is based on a study by Magnitt that showed that in the first half of 2022, fintech was the leading industry by total funding and transactions closed. “Fintech’s predominance in the UAE startup scene is further evidenced by the large rounds of funding closed by companies in the sector. In H1 2022, two of the top five largest startup fundraisings were secured by fintech startups: Tabby, a buy now, pay later (BNPL) startup that closed a US$54 million Series B in March; and Wahed, a wealthtech startup that secured US$50 million in a Series B in June,” according to the study.
The UAE’s attractive business framework drives growth in the country
Over the years, the UAE’s attractiveness for investment has increased steadily and significantly. A great part of this success is the government’s commitment to its inclusive strategies towards achieving a digital and knowledge-based economy.
The UAE has successfully positioned itself as a regional hub for global companies. The country’s advanced infrastructure, cutting-edge communications, and government support make it a fitting environment for international companies to manage their regional offices from the UAE. The country has long constituted an ideal window from which global corporations can oversee their business activities, according to the Ministry of Economy.
The country has also attracted scores of start-ups from all over the world. The government fully encourages innovative entrepreneurs and offers business accelerators, financing services, and sponsorship programmes to entrepreneurs from around the world.
It also brings together businesses and entrepreneurs from the region and worldwide through renowned industry-specific expos, conferences and summits. Several international events are hosted in Dubai and key cities throughout the year, opening enormous opportunities to share knowledge and establish vital networks to investors and entrepreneurs.
To know more about properties in the UAE, contact one of our experts at [email protected].
