Boston, MA -- (SBWIRE) -- 03/15/2013 -- The UAE Tourism report considers the recent performance of the tourism sector and assesses its longterm prospects. For the UAE as a whole, the tourism sector had another good year in 2011, with foreign tourists arrivals growing by 10.5% year-on-year (y-o-y). The already burgeoning tourism sector appears to have benefited from the Arab Spring, as tourists favour the UAE over less stable locations in the region. Given ongoing instability, there is potential for the industry to benefit further from this trend.

BMI anticipates a slight slowdown in the tourism sector in 2012, partly driven by extremely weak economic conditions in the eurozone (Europe is a major source region for arrivals). Indeed, growth in visitors from Europe to Dubai has been weak in recent years. Yet there are still favourable opportunities for the UAE in regional tourism growth, such as from Saudi Arabia. The tourism industry has also become a notable bright spot for the construction sector.

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In Abu Dhabi, the most recent data for the first nine months of 2012 show the emirate welcomed 1.74mn hotel guests, representing a robust 15% increase y-o-y (including UAE arrivals) compared with the corresponding period in 2011. Abu Dhabi now looks well placed to achieve its target for the year of 2.3mn guests arrivals. The number of domestic tourists - the largest group of arrivals - increased by 11% y-o-y. Source markets which recorded the strongest growth in January-September 2012 were India (up by 31% y-o-y), Germany (+46%), Saudi Arabia (+17%), China (+78%) and Russia (+44%).

In the hospitality sector in Abu Dhabi, latest figures for the period January-September 2012 show total guest nights were up by a solid 10% y-o-y. This was particularly favourable given a sizeable increase in available hotel and resort capacity in 2012. Food and beverages have generated significant revenue, accounting for US$339mn over the nine-month period, an 11% increase y-o-y.

Over the last quarter, BMI has revised the following forecasts and views:

- BMI has edged up its annual growth forecast for foreign tourist arrivals to the UAE in 2012 and 2013 to 8.5% and 10% respectively.
- BMI's revised projections for real GDP growth in the Middle East and North Africa (MENA) are 5.2% (down from 5.7%) and 3.9% (from 4.1% previously) in 2012 and 2013 respectively, after an estimated 3.2% in 2011.
- We expect a recovery in the eurozone in 2013 to compensate for a forecast slowdown in economic growth in MENA.
- Abu Dhabi has recorded impressive growth in foreign tourism from burgeoning target markets such as China and Russia.

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