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Sustainability and hyperspeed: the future of tourism showcased at ATM

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Sustainability and hyperspeed: the future of tourism showcased at ATM

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This week, Inspire Middle East tours the Arabian Travel Market, a leading event for the tourism industry looking at the future of travel in the region. We also report on the real-estate event Cityscape Abu Dhabi to discover how much affordable housing really costs in today’s money.

Industry Gathering: Arabian Travel Market

The Arabian Travel Market marked its 25th anniversary this week, hoping to smash previous annual visitor numbers of 40,000 hospitality professionals and trade buyers.

The event showcased Middle East and North African tourism destinations and hosted key representatives from the hotel and airline sectors.

Last year’s edition generated approximately $2.5 billion of new industry deals, a significant contribution to one of the world’s largest economic sectors.

As with most fast-growing industries, tourism and hospitality have sizeable impacts on the environment. The UN’s World Tourism Organisation states that the industry is responsible for around 5% of global CO2 emissions.

According to the experts, for hoteliers to harness the full growth of the sector in the decade ahead, they’ll need to adopt responsible policies, catering to consumers who are increasingly concerned with sustainability. These policies include the conservation of water and energy, as well as the reduction of other waste products such as plastic. Even the simplest measures go some way to preserving the environment.

“For Earth Day, and this whole month, we have stopped using plastic straws in our hotels in the Middle East and hotels in Africa,” says Inge Hujibrechts, the Vice-President of Global Business at the Radisson Hotel Group. “On a yearly basis, that means 7 million straws less.”

Other highlights of this year’s event were representatives from Saudi Arabia’s tourism sector. The Kingdom’s hospitality industry is in focus right now, with access to non-religious tourists expected to be granted imminently and for the first time.

“We’re very excited about the announced changes and the tourist visa that was announced last year should come anytime now,” said Dr Badr Bin Hamoud Al Badr, CEO of Dur Hospitality.

Dr Al Badr’s heads-up a hotel division of Dur’s portfolio called Makarem, and the properties cater to pilgrimage tourists on their way to Medina and Mecca.

“We have a spiritual concierge desk.” he says, “There we help them [visitors] with answers to questions, like “What do I do next?” and “What is expected of me?”. [They give] some tips on where to go or what to do, within the context of a religious visit.”

The ‘Future of Travel’ generated a particular buzz at ATM this year, with a Hyperloop tipped to launch in the UAE within the decade.

The super-fast vehicle will transport visitors from Dubai to Abu Dhabi in just 12 minutes, compared to the current 1.5 hour’s drive.

With a keen awareness that some tourists may fear the vehicle’s speed of 1,080km per hour, Harj Dhaliwal, the Managing Director of Hyperloop One’s Middle East & India operations, had words of reassurance at ATM.

“Safety is paramount in everything that we do.” he said, “So obtaining safety approval certification and making sure that we are doing it in a very transparent and open manner is critical to success.”

Egyptian Travel: Modern Tourism in an Ancient Land

Safety is also a priority for Egypt’s Tourism Minister, Dr Rania Al-Mashat.

She’s a highly-respected, trailblazing individual, who regularly tops the region’s ‘Most Influential’ lists, and whose career highlights have included the International Monetary Fund and the Central Bank of Egypt.

In recent years, visitor numbers to Egypt’s Millennia-old monuments, pyramids and Red Sea resorts have been impacted by political tensions, flight suspensions and security concerns.

“We have been doing everything we can to ensure that tourists and visitors who come to Egypt, find it safe.” said the Minister, “We’re very encouraged by the resumption of flights between Moscow and Cairo, and we do expect that traffic is going to increase.”

Despite some turbulent times, the travel industry remains a cornerstone of Egypt’s economy. Last year the sector accounted for 11% of GDP and that figure is forecast to rise by almost 4% in 2018. Dr Al-Mashat suggests that this boost might be partially due to Egypt’s new and established diplomatic and bilateral ties.

Aside from Egypt’s world-famous heritage sites, Dr Al-Mashat remarks that one sizeable marketing advantage the country has, is so many people identifying with it - even though they may never have visited.

“Everyone, since they were a kid in school…has either read about the pyramids or seen a picture of the Pharos.” she says, “So, in that sense, the heritage and the culture is something that is on everyone’s minds.”

Although Egypt is best-known for its ancient civilization, Dr Al-Mashat highlights the importance of promoting the country’s youth to attract more visitors in the years to come.

“The new, dynamic, young Egyptian population is very ambitious, enthusiastic and very well known for arts and music.” she says, “This connection is very important to create.”

Affordable Housing: Building for the Future

New building projects, beachfront villas and smart penthouses attracted much attention at this year's Cityscape property show in Abu Dhabi.

Altogether, the real estate featured amounted to just over $4bn.

This time, more than 100 developers and suppliers, from fourteen countries, unveiled their latest commercial and residential projects to investors on the ground.

Apart from luxury developments, affordable housing was a key theme, with Abu Dhabi’s largest developer Aldar unveiling the next phase of a $2.7bn project called Al Ghadeer.

The development, which will be completed by 2021, will comprise of more than fourteen thousand units - including maisonettes, townhouses and villas. Prices in the affordable range start from around $80,000 for a studio and extend up to $245,000 for a three-bedroom villa.

Whilst catering to demand from domestic and international investors, the challenge for UAE developers is to deliver a high-quality product, at a lower market rate, whilst retaining a healthy margin.

Maan Al Awlaqi, Aldar’s Commercial Executive Director, highlights how design efficiency is key to cutting costs.

“You [must] have no dead space in your layouts,” he says.

Al Awlaqi added that maisonnette apartments are cheaper to design, execute and purchase than many other build-types, hence their current popularity.

Trading conditions remain challenging in the UAE market, given the level of oversupply, the recent introduction of VAT and a 15-19 percent dip in real estate prices in the past three years.

According to investments management company Jones Lang LaSalle (JLL), the UAE's move to make more affordable housing available to low and mid-range income investors is a step in the right direction - with 10% more supply available now than in 2014.

Access to more reasonably priced residential developments also has a knock-on effect for global companies looking to set-up regional offices in the emirates.

Craig Plumb, Head of Research at JJL, explains that many companies in recent years have thought twice about doing business in the UAE, given the high costs associated with relocating and housing employees. He remains optimistic, however, that the situation will improve, if developers continue to heed consumer demands.

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