Dubai a Close Competitor to Dubai's Tourism

Dubai A close competitor to Dubai's tourism industry is that of neighboring Abu Dhabi. The two are the largest and wealthiest cities in the United Arab Emirates (UAE). However, they are parts of separate emirates, so they each have their own governments. As a consequence, they are natural competitors. The two actually compete using their own state-supported airlines, Emirates in Dubai and Etihad in Abu Dhabi. These carriers compete in the Europe-Asia market using their respective homes as hubs.

This draws traffic via each different airline, and both are critical to the tourism strategies of their respective emirates (ETurboNews, 2011). While Dubai's tourism industry is based on luxury -- high end hotels, resorts and shopping -- the tourism industry of Abu Dhabi is different. Abu Dhabi competes vigorously for tourism dollars, but its tourism industry is more diversified than that of Dubai. The city of Abu Dhabi has a similar market to Dubai, focused on luxury and shopping, but without nearly the same high-end flash.

However, Abu Dhabi has a larger territory and inland areas such as the oasis city of al-Ain have appeal to tourists. Abu Dhabi's tourism industry is supported by extensive public funding. Unlike Dubai, Abu Dhabi has significant oil wealth and this provides the capital that the emirate needs to build out its tourism infrastructure, including Etihad and various marketing programs. Abu Dhabi hopes to attract two million tourists by the end of 2011 and attract five million tourists within ten years (Oakley, 2011).

One of the major differences between the tourism strategy for Abu Dhabi and for Dubai is that the former emirate is not dependent on tourism. Of the two, it is Abu Dhabi that has significant oil wealth and as a result of that the emirate has a strong balance sheet. The earnings from the inchoate tourism industry are meaningless to Abu Dhabi's budget, although the emirate hopes that this will change. For Dubai, tourism is much more important. In 2007, Dubai received over seven million visitors, much more than Abu Dhabi.

Hotel had occupancy rates of 84%, a very high rate, and tourism is a major part of the public budget. Tourism is thought to contribute 20% directly and 30% indirectly to the GDP of Dubai, and is therefore critical to that emirate, compared with Abu Dhabi (Heyer, 2008). Dubai controls its tourism industry through strong state control of the companies and agencies involved. Government agencies such as the Department of Tourism and Commerce Marketing take an active role in shaping the development of tourism.

Many developments are part of a larger strategy governed by agencies like this. As a result, tourism efforts are generally coordinated efforts from multiple government agencies. For example one recent announcement showed that tourism and mixed-use projects were being undertaken by Wasi Asset Management Group, which is a subsidiary of the state-run Dubai Real Estate Corporation. Private.