The hotel industry is the cyclic service business and a significant and distinct economic force within the country’s service economy that carries out a vital role in the country’s economic progress. When visitors spend money in hotels, restaurants and entertainment places it actually generates income for the local economy where it associates to economic development growth and activities. The hotel industry connects together many kinds of industries including the tourism industry, the transport and the foodservice industry. Each country gives emphasis to the significance of the hotel industry because it brings great income to the country and also necessary for the growth of the country. Hotels can make a significant impact through their services to the overall output of goods and amenities in a local and domestic economy where both direct and indirect contributions to GNP and GDP, jobs and foreign exchange earnings can be observed. The hotel industry and tourism industry in the United Arab Emirates (UAE); which ranks 18th in the world in terms of global tourism effectiveness are a significant contributor to the UAE economy, but the hotel industry plays an important role in the success of its economy.
Dubai, a federation of the seven independent states, is one of the world’s most visited destinations for worldwide tourists and has become one of the foremost luxury destinations in the world for leisure and business travelers, providing a multi-faceted destination that combines luxury hotels, shores, desert, grocery shopping, amusement and a flourishing business center. After Abu Dhabi, it is the second richest emirate in the UAE. It is a major tourist destination and over the last three centuries, it has become one of the world’s top travel and tourism hubs, as the Dubai hotel rates are affordable for most of the tourists. Its port, Jebel Ali, the biggest man-made port, is at the center of Middle East export trade and is accessible from all the continents. Therefore, its strategic place serves as the Middle East’s largest re-export center and it is no wonder that its hospitality industry is a growth factor. In 2004 it has enabled Dubai to evolve as a global hub for service industries such as IT and finance with the implementation of the Dubai International Financial center (DIFC).
There is a wrong concept in mind that main source of Dubai’s income is from oil reserves but the reality is that these reserves are used only to produce tourism & trade facilities. Dubai never had elevated oil profits like Abu Dhabi. Therefore, in order to build the economy of Dubai, the Dubai government took some extra measures and started to invest its oil generated revenues in the other business sectors i.e. tourism and hotel industries. Only a couple of hotels were accessible for the visitors in the early 1990’s. The Dubai government set up its own hotel company in 1997, named Jumeirah International. They arrived in the Dubai hotel market with a dream of becoming the world’s most innovative luxury hospitality group, seeking to increase the standard of emirate hotel accommodation. By constructing luxury hotels, Jumeirah International started the process to create a presence in the market.
This approach had the required impact if both adding to the inventory of five-star hotels and, Dubai discount hotels and attracting the attention of other major regional and international hotel businesses seeking to invest and create a presence in the increasing tourism industry in Dubai. Because the government promotes investors to construct new hotels with the promise of tourists arriving. This approach rapidly made it possible for Dubai to merge with a supply of quality hotels and hotel rooms as a reliable tourist destination. It is estimated that hotel occupancy rose to over 80 percent in the mid-2000s. According to data from the Dubai statistics office, the hotel industry was the largest increasing industry in the Dubai economy in 2012, recording an annual growth rate of 16.9 percent. It also enjoyed a growing percentage share reaching around 4.5% in 2012, compared to 3.4% in 2008 and according to information from the Department of Tourism and Commerce Marketing (DTCM), occupancy at Dubai’s 599 hotels, which have 80500 rooms coupled, was 78 percent in 2012, as the number of tourists increased 9.3 percent from a year ago to 10.16 million.
As the UAE’s hospitality industry continues to develop rapidly, it offers highly promising career opportunities for skilled professionals, especially young Emiratis. In 2017, it was estimated that the industry contributed more than AED150bn to GDP (4.6% of GDP), providing nearly 570,000 jobs, representing 4.8% of total employment. In the 10 years to 2017, the direct contribution of the sector to GDP increased by 138%, with employment in the sector increasing by 119% over the same period. Prognoses show that the direct contribution will rise by an extra 72 percent by 2026, resulting in a 16 percent rise in associated jobs to over 659,000.