Signs of vulnerability to strong dollar apparent
- Dubais travel and tourism business activity index in August rose by 2.1 points
- However, it has the weakest growth compared with construction and retail sectors
Dubais travel and tourism business activity index in August rose by 2.1 points to reach 52.6, compared with July.
However, it has the lowest index value and weakest growth compared with two other sub-sectors being tracked on local bank Emirates NBDs Dubai Business Activity Index.
The composite index for the construction and real estate sector in August was at 58, while the wholesale and retail sector was at 56.1. The average composite index stood at 57.6, against a neutral value of 50.
Dubais travel and tourism sector is growing strongly, although the strong dollar has resulted in weak local currencies in many parts of the global economy, says Tim Fox, chief economist at Emirates NBD. This has had a negative impact to the sectors overall performance in the August index.
Dubai attracted 13.2 million visitors in 2014, according to the Dubai Department of Tourism and Commerce Marketing. The top sources of visitors have been Saudi Arabia, India, the UK, China, Nigeria and Brazil, along with Eastern European countries.
The number of tourists coming from Russia already began to fall earlier this year due to the weakening of the rouble. A similar trend for Chinese tourists is highly likely with the major devaluation of the yuan in recent weeks.
The tourism and hospitality sector accounted for 5 per cent of Dubais GDP in 2013, according to Emirates NBD. Other sources indicate that the total GDP contribution of the combined tourism, hospitality and travel, along with other related sectors, is actually higher and could be between 20 and 30 per cent of total GDP.