Dubai’s tourism sector gets boost from visas-on-arrival for Chinese

Private sector companies operating in Dubai’s travel and tourism sector posted strong growth in November, supported by an increase in Chinese visitors.

The sector posted the sharpest rise in business conditions last month in the seasonally adjusted Emirates NBD Dubai Economy Tracker Index at 57.5.

Improving conditions also led to jobs growth in the travel and tourism industry, the survey found.

Overall, the index – which measures growth in the private non-oil sector – reached 55.2 in November, indicating the strongest improvement in business conditions since August.

It also found that the wholesale and retail sector posted strong growth at 56.1, although construction companies reported slower growth at 51.8.

Khatija Haque, head of MENA Research at Emirates NBD, said: “The Dubai Economy Tracker signals a faster rate of expansion for non-oil firms in Dubai in November, and this seems to have been led by the travel and tourism sector. The introduction of visas-on-arrival for Chinese nationals (announced in September) may have contributed to the growth in this sector over the last couple of months.”

Read more: UAE to offer visas on arrival to Chinese visitors

The rebound in the headline index was supported by a sharp and accelerated expansion of private sector output in November.

Survey respondents credited this to stronger consumer demand, new product launches and successful price discounting strategies.

However, the construction sector saw output growth slipping to a five-month low amid reports citing subdued investment spending among clients.

Construction companies also reported a drop in staffing levels for the first time since June.

In terms of input costs, price inflation edged up to its strongest for five months, led by a steep rise in construction sector costs – the highest since August 2015.

Despite reports citing higher raw material prices, private sector companies continued to lower their average charges in November. Price discounting has now been recorded for four months running, linked to competitive pressures and efforts to secure new work, the report said.

Looking ahead, private sector companies in Dubai are optimistic about their growth prospects for the year ahead, particularly travel and tourism companies.

A number of firms cited projects related to Expo 2020, alongside hopes of a general upturn in economic conditions across the region.