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The United Arab Emirates, UAE, is a desert federation of seven autonomous states. The UAE is located on the southeastern portion of the Arab Peninsula, just south of the Persian Gulf. The country borders to Saudi Arabia, Oman, and the Gulf of Oman. Since the mid-20th century, the United Arab Emirates has managed to transform from a subsistence economy that is dependent on pearl harvesting, fishing, and farming to a developed and complex one, thereby facilitating improvement in the standard of living. Revenue from the sale of petroleum has been utilized in boosting the growth of other non-oil trading practices, such as tourism, manufacturing, medical tourism, and commerce (Carter, et al 2006). These practices have been significant sources of employment for the locals and foreigners alike.
Impact of Tourism on GDP
The United Arab Emirates has managed to diversify her economy in a remarkable way. The economy has been able to attract a large portion of skilled and unskilled labor force from foreign countries. The main economic activities in the UAE include tourism, mining, manufacturing, energy, agriculture, transportation, foreign trade, as well as currency and banking services. The UAE is rich in natural gas and oil. In fact, according to some estimates, the country`s oil and gas may last for over 100 and 200 years respectively. The revenue, that has been resulting from the two resources, is a significant boost to other sectors of economy, a situation which has made diversification possible (Sharpley, 2009). The United Arab Emirates has become a household name in the world of tourism. The huge number of foreign workers popularizes the UAE as a tourist destination upon their return to their home countries. As such, the country receives visitors from all parts of the world, and this has enabled the formerly conservative Arab nation to become a cosmopolitan herb.
The UAE has a rapidly growing tourism industry. This industry has been a major provider of employment opportunities to the locals and foreigners alike. The diverse workforce in the UAE’s tourism sector promotes innovation and entrepreneurship. In addition to the tourism industry, the country has an active commercial sector, where trading, and other businesses practices operate privately. In recent years, social and community services, like government employment and teaching, have formed a significant source of employment. These improvements have made the UAE a wealthy country, thereby availing resources for the construction of modern transport, communication, and educational infrastructures.
The United Arab Emirates has developed an efficient transport system (Sharpley, 2009). According to the official statistics, the country has a total of 676 miles of modern highways that connect the seven Emirates to Saudi Arabia and Oman. The country has six international airports, with the Dubai International Airport being the largest amongst them. Additionally, the government has constructed numerous ports, with Mina’ Jabal ‘Ali in Dubai being the largest in the country. In fact, they are the largest artificial ports globally. In Dubai, automobiles play a significant role in transportation (Carter, et al 2006). These infrastructural projects have made the UAE to be a competitive tourism market with their elimination of the challenges, which is faced by the leisure travelers in other locations of the world.
The Influence of Tourism on the Trade Balance
The United Arab Emirates tourism sector has recorded massive growth over the past 40 years. This has resulted from the government’s planned diversification of the economy. As explained earlier, the government has improved the infrastructure of the country in an endeavor to support the rapid growth in the tourism sector. The remarkable transportation and financial systems have enabled the country to become a prime tourist destination. In fact, Dubai, the nation’s capital and the largest city, is the tourism capital of the Middle East. In recent years, tourism has been a significant contributor to the economy of the United Arab Emirates. The contribution to the economy has increased from a mere one percent to over 10.4 percent in forty years (Lis, 2010). This is remarkable, especially since the nation is situated in the conservative Arabian Peninsula, where local societies remain skeptical of the western influence.
Available statistics indicates that over 50 million foreign tourists have visited the Dubai Shopping Festival, since its founding about 14 years ago. According to the official records, these tourists have spent over Dh88billion, a figure that has been a significant boost to the tourism sector. The annual increase in arrivals by between 10 and 12 percent has rejuvenated the airports as well as the financial and banking industries. By 2011, the number of arrivals through the Dubai International Airport exceeded fifty million. Arrivals through the Abu Dhabi International Airport reached 10 million by the same year (New Straits Times, 2011).
Following the increase in the number of tourists, investors in hotels in resorts industry have invested on improved capacities. In December 2011, the Hilton Hotels and Resorts began strategizing on opening the Hilton Jumeirah Hotel Apartment in Dubai. Once complete, the facility will be the third of its Hilton properties in the city. The facility will be located along the Jumeirah Beach, thereby enabling it to link with the Hilton Dubai Jumeirah Resort through a footbridge that will, therefore, enable the properties to share a wide range of service. Such facilities will require an enormous work force, a situation which will attract highly skilled workforce from all over the world (New Straits Times, 2011).
The United Arab Emirates has been holding road shows in an endeavor to promote cities across the country into major tourist destinations. Moreover, the country’s National Council for Tourism and Antiquities, NCTA, has been organizing workshops at key facilities like the Intercontinental Hotel. In addition to the promotion of leisure tourism, these workshops have been an enormous boost in Dubai and other cities, as they seek to become serious business destinations. These efforts were prompted by the fear that the United Arab Emirates was losing its competitiveness as a destination of choice by leisure tourism (Mobile Reference, 2010).
As a result of massive advertising, United Arabs Emirates was able to revive its tourism industry from the effects of the 2008 world economic crisis. By 2010, tourism and travels in the UAE registered a remarkable improvement, a situation which prompted the government and the private sector to revisit infrastructural development. Nevertheless, some hotel facilities incurred heavy losses, a situation which resulted from the price antagonism between the National Tourism Board and the main operators. The National Tourism Board had aimed at making tourism affordable to individuals who had suffered the impacts of the world economic crises (New Straits Times, 2011). However, most of the local and international tourism players recorded profits in 2010 and 2011.
The UAE Monetary Policy and its Impact on Tourism
The UAE has developed a fiscal policy that is aimed at creating confidence in the country’s economy. The policy has facilitated economic diversification, a situation which has resulted into the creation of extra business opportunities for Emirati citizens as well as the international investors. The policy has had positive impacts on the growth and sustainability of the tourism industry. Therefore, in spite of the challenging economic environment, airline operators have remained optimistic that the situation will improve. They have, therefore, been increasing their flight frequency to the UAE, with some adding extra routes. Several communication and advertising agencies have been established, a scenario which has increased job opportunities at a time when most countries are implementing different forms of austerity measures. Unlike many places in the world, the growth of, for instance, low cost airlines have not threatened the growth and expansion of the large and expensive ones. These airlines have continued to hire personnel as they improve their business and first class services. In fact, the demand has been remarkably high recently. In this regard, the UAE has been undertaking several airport improvement projects in all locations across the country. The improvement of these facilities has been prompted by the increasing demand as well as the government strategy to position the UAE as a regional transportation hub (Oxford Business Group, 2008).
Although the United Arab Emirates remained calm in the midst of the Arabs political uprisings, potential tourists remained skeptical. The upheaval was detrimental to the flow of tourists into the affected countries, with some shutting down their tourism industry to close for a year. However, a significant number of tourists chose the United Arab Emirates over several prominent locations in the world. In this case, the United Arab Emirates positioned itself as a major beneficially of the troubles in other Arab nations. Due to its demonstrated political and economic stability, it is hoped that tourist figures to the United Arab Emirates will recover faster than it had been anticipated. Nevertheless, skepticism has persisted especially due to the UAE’s military engagement in the Emirate of Bahrain (Brebbia & Pineda, 2010).
Diversification of Tourism and its Impact on Employment
The United Arab Emirates has been advertising itself as a destination for sport tourism. In the recent years, the country has hosted events, such as the Formula One racing and golf. In fact, sport tourism has exposed the weaknesses of the travel accommodation in Abu Dhabi and other smaller cities. Such weaknesses are indicators that extra need to be done. In this case, an extra number of workers will be required in the construction and a variety of service industries. Additionally, the high demand for spa resorts and tourism in the region will require massive hiring and investment.
The spa industry has gained dominance in the recent past, and the United Arabs Emirates stands out as a major beneficially. Hotels and resorts have been increasing the number of packages on offer. These packages are aimed at increasing the number of times that the tourists visit the spas. In fact, the spa industry has been growing so rapidly for the tourism industry to cope with the needs. This has been due to inadequate human resource in the market. In the last decade, the industry has been faced with challenges of meeting market demands as the number of instructors, experts, and training institutions remained inadequate. Nevertheless, a significant number of training institutions has been set up being sourced from Asian countries like China, Japan, and South Korea. Stakeholders in the industry are coming up with acceptable standards of training that would facilitate effective service delivery, as well as marketing strategies (Brebbia & Pineda, 2010).
The United Arab Emirates, especially the city of Dubai, has become a prime destination for medical tourism. Hospitals in the UAE have been expressing intent to enhance their capacity to provide medical tourism. In fact, some have sourced various international healthcare accreditations form the US, Britain, Canada, and Australia. The city has been attracting wealthy patients from all over the Middle East and beyond. To cater for the increasing demand, the UAE has been constructing new medical facilities, where quality services can be offered at competitive prices. The facilities offer a wide variety of services, ranging from elective procedures to complex and specialized surgeries. For instance, Dubai is becoming increasingly competitive as a destination for cardiac as well as joint replacement and cosmetic surgeries (Boniface & Cooper, 2009).