Abu Dhabi buzzing with business
Supported by the splendor of Arabia’s captivating culture and a robust economy firmly rooted in hydrocarbon industry, Abu Dhabi is galvanizing its effort to be recognized as a global city and a leading trading hub of the region.
The Emirate of Abu Dhabi is the largest among the seven emirates constituting the United Arab Emirates federation and it is the capital of UAE. It occupies about 87 percent of the country’s total area and has a coastline extending more than 700 kilometeres. Abu Dhabi, which is the fifth largest exporter of oil in the world, is making every attempt to see its oil sector play the role of a stimulator to other economic sectors in order to achieve a sustainable and inclusive development in all areas. As a result of the Abu Dhabi Government’s intensified efforts to diversify the economy, with tourism being identified as another vital sector for economic growth, the Emirate is witnessing an unprecedented boom in the number of hotels, amusement and theme parks, shopping malls, luxurious residential complexes, waterfront communities, sports and other recreational facilities, and art galleries and museums which all cater to a growing number of domestic and international holiday makers. The tourism sector accounts for 2.1 percent of Abu Dhabi’s GDP, and 6.4 percent of the non-oil sector in 2009. The Emirate is planning to invest a whopping $230billion in various tourism projects over the next five years. The Emirate is expected to attract three million tourists by 2015. The Abu Dhabi Economic Vision 2030 outlines the economic diversification plans of Abu Dhabi government. It reflects the desire of the government to envisage the development process of the emirate over the next two decades with a clear and long-term road map and general policy framework for economic development. The vision involves a greater collaboration between the public and private sectors in implementing the policies and plans of the government. Abu Dhabi is taking a number of serious steps to diversify its economy away from overdependence on hydrocarbon industries. It sees the implementation of a well-defined economic diversification policy with clear goals and appropriate mechanisms as the first step to build a self sufficient economy that can offset the impacts of fluctuations in the oil prices, share markets and real estate sector. Abu Dhabi Airports Company (ADAC), a public joint-stock company wholly owned by the Abu Dhabi Government, runs Abu Dhabi International Airport (AUH). AUH is positioning itself as another fast growing hub for passenger and cargo traffic in the Middle East. Within the next few years, over 30 million passengers are expected to use AUH as their origin, destination or transit point for international and domestic flights. The Midfield Terminal Complex (MTC), Abu Dhabi Airports’ iconic expansion project, is being constructed to handle increasing passenger traffic. “Abu Dhabi is a perfectly positioned as a transit destination, with 100 of the world’s capital cities and two thirds of their populations within six flying hours flying time from Abu Dhabi. About 81 percent of the population is within eight flying hours. The epicenter of the world has moved to pretty much where we are now. Additionally, here in Abu Dhabi, the government has a long term strategic plan for the development of the Emirate, which is Vision 2030. This vision provides all of us with a clear direction for the future. So in aviation, both ourselves and Etihad Airways are able to plan a long way into the future and devise long term strategies rather than short term piecemeal solutions which can be seen elsewhere in the world,” said Tony Douglas, CEO, ADAC. The passenger and cargo performance was significant in the first quarter of 2014 and witnessed growth by 15.1 per cent and 15.8 per cent respectively compared to the same period in 2013. “There are several positive factors at play here which we've benefited from. Economies throughout the GCC, and some parts of the Middle East, are in a robust state compared to many other parts of the world and there’s a strong demand for premium travel as countries in the region develop and grow,” Douglas added. A busy conference season and a rise in room rates are expected to keep Abu Dhabi hotels in the black as profitability increased in the first half of 2014. According to a research report by TRI Hospitality Consulting Middle East, occupancy levels improved 4.9 percentage points to touch 78.2 percent, while the average room rate was US$151.68 versus $151.61 during the same period last year. The gross operating profit per available room, or the bottom line profits, rose to $81.18 during the first six months, compared with $72.61 last year, the reported noted. In June, the average daily room rate increased by 4.8 per cent to $122.30, and the occupancy rate was 69.7 per cent, up by about 5 percentage points over last year. Conferencing activities pushed the gross operating profit per available room up 31.3 per cent to $31.39 over June last year. Etihad Airways, UAE’s national carrier, has reported double-digit growth in passenger and cargo volumes during the first half of 2014, marking its strongest ever performance for the six-month period, with total revenue increasing to US$3.2 billion. A total of 6.7 million passengers travelled with the airline between January and June this year, almost 22 percent higher than the 5.5 million passengers in the same period last year. Etihad Cargo also outperformed the global market, carrying 268,713 tonnes of freight and mail during the first half of 2014, up 25 percent year-on-year, and contributing significantly to the airline’s total revenue. The airline also created a historical record recently when it flew 181,333 passengers in four days during the post Eid Al Fitr period this year. At a time when the global airline industry is struggling with high fuel prices, intense competition and a slowdown in the cargo market, Etihad Airways’ performance is remarkable. “We have ambitious plans to keep the momentum going in the second half of 2014, with five more destinations being introduced into our global network, and our ground-breaking Airbus A380 and Boeing 787 also entering service, which will reinforce our status as a global market leader,” said James Hogan, president and CEO, Etihad Airways.