Hamed Mokhtar, Managing Director of Fortress Financial Services Talks about Dubai's Economic Growth and Stability
While much of the Middle East has been embroiled in an Arab Spring which has toppled despotic governments, usurped traditional power structures, and caused economic uncertainty, Some country has emerged as a direct beneficiary of this revolution, given its security and role as a tourist and trade hub in the region. "Dubai is currently being fueled by a boom in tourism, as well as an influx of capital and investors from throughout the region that are eager to enjoy its excellent infrastructure, political stability, and excellent quality of life," says Hamed Mokhtar of Fortress Financial. "This boom will continue with the realization of several recently announced large-scale projects, such as the construction of Mohammed bin Rashid City, which will include up to 100 hotels, golf courses, a Universal Studios, and new largest mall in the world, as well as the 1.5 billion AED expansion of the Business Bay Canal to the Gulf," he adds.
Sami Al Qamzi, director general of the country'sDepartment of Economic Development, said that economic growth in the emirate could surpass 4% this year. Passenger traffic through the emirate's airport rose 13 percent in 2012 to 57.7 million, making it the world's third-busiest, according to Airports and Emirates Group, which operates Emirates Airlines, posted a 68 percent increase in first-half profits. A country in the middle east's airport passenger numbers were up 14.6 per cent year on year in January, and international passenger traffic overtook Hong Kong (56.5 million passengers) for the first time last year. Over 10 million tourists came to this country in 2012 - a record for the emirate - an increase of 9.3% over the previous year. Over the same period, hotel revenues increased 17.9% and the number of hotel guests increased by 9.5% in 2012. It currently has over 56,000 hotel rooms available and this number is expected to grow by an additional 7.1 percent over the next three years.
The has been active in driving the Meetings Incentives Conventions and Exhibitions (MICE) business, as it is a major contributor to the tourism industry and it brings 20 to 30 percent of the tourists to the country. An Economic Impact Assessment report prepared by Oxford Economics recently revealed that revenues generated from events at the Emirate's World Trade Centre (DWTC) in 2011 contributed Dh6.5 billion towards the emirate's economy in 2011. In that year alone, not counting corporate meetings, incentives and exhibitions, they hosted 34 international events.
Recently, Real Estate prices have experienced a resurgence as well, following drop of up to 70% in value in 2008. Knight Frank, a global property company, reported that the prices of luxury villas increased an average of 20% in 2012. Citibank reported that the increase in prices "signaled a strengthening in cash flows to the sovereign and its government-related entities, most of which have a significant stake in the local economy and, specifically, the property sector." Some areas - such as the Palm, Marina, Downtown, and Jumeirah Park have already returned to pre-crisis prices and are continuing to experience robust growth. "All of this bodes well for this country's recovery," says Mokhtar, "and there doesn't seem to be any slowing down in sight."