UAE tourism feels global pinch

Over the years tourism has become a cornerstone of the United Arab Emirates’ (UAE) quest for a more diversified economy, one not just based on the income from the country’s vast oil reserves.

Over the years tourism has become a cornerstone of the United Arab Emirates’ (UAE) quest for a more diversified economy, one not just based on the income from the country’s vast oil reserves.

Billions and billions of dollars have been spent on constructing new hotels and tourist attractions, many of which have pushed the definitions of luxury to new limits. In order to transport the potential tourists to the region new airports have been constructed and new airlines have been set up with government money for this purpose.

One of the these airlines is the Dubai-based Emirates, which has grown extensively since it was established in 1985 and today flies to more than 100 cites worldwide with a fleet that includes two Airbus A380 super jumbos.

So, when the Emirates reports that its profit for the first fiscal year this year has fallen by 88 percent due to soaring oil prices, there is reason to be worried.

Despite depressed oil prices, Emirates is still showing an 11 percent increase in passenger traffic. However, analysts at The Media Line say the real test lies ahead as the current global financial crisis shows no sign of letting up. The question now is whether or not Emirates can keep up the number of passengers.

A fall in passenger traffic for Emirates will eventually be felt by others in the tourism industries who are dependent on the income from the tourists that Emirates brings to the region, ranging from cabdrivers to shopping malls and hotels.

While Dubai has been the front-runner among the seven kingdoms that constitute the UAE, the capital Abu Dhabi has been working hard over the past couple of years to catch up. One of its most notable projects is a branch of the Guggenheim Museum and the Louvre.

Despite these ambitious projects, the local tourism industry has not been able to avoid being hit by the financial crisis and a lower number of tourists from the U.S. and Europe.

A sure sign that economic hardship is at hand is the cancellation of winter holidays.

Therefore, in order to counter the drop in the number of Western tourists, officials in Abu Dhabi are now working hard on a plan to attract Middle Eastern tourists to fill the ever-growing number of hotel rooms in the city.

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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