Hotel Market in the UAE

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The factors that influence the growth of the hotel industry in the UAE are political ones, including policies and spending; economic ones, including the development of supporting tourism, restaurants, and transportation industries and investments; and legal ones, including tax laws and regulations (Central Intelligence Agency; Geronimo par. 2). In this case, the most influential factors are economic that are associated with the development of tourism, entertainment, restaurants, and transportation industries. In addition, much attention should be paid to the customer’s purchasing capacity associated with changes in the household income rates (UAE Ministry of Economy 5).

Therefore, the analysis of the hotel industry’s progress in the UAE depends on determining the relationship between such variables as the growth of tourism and transportation business in the UAE and changes in the household income as independent variables, and the progress of the hotel industry in the country as a dependent variable. The situation in the hotel industry is also examined with references to the analysis of the relationship between such variables as the hotel industry’s progress and the contribution of the industry to the gross domestic product (GDP).

The most recent data provided by the UAE National Bureau of Statistics is related to the period of 2001-2012. According to the regression analysis of relationships between such factors as the growth of tourism and restaurant business and the growth of the hotel industry, the 20% growth in the tourism sector is positively related to the 17% growth in the hotel industry. The growth of the transportation infrastructure in about 10% is also related to the growth of the hotel industry (“UAE National Bureau of Statistics”).

In this case, changes in tourism and transportation industries as independent variables can be discussed as influencing the growth of the hotel industry in the UAE. In 2012, the buying capacity of tourists increased in about 32% in comparison with the data for 2001-2011, and this factor was related to changes in the hospitality sector in the UAE because of increasing the number of beds in hotels and expanding the hotel chains in the country (“The World Bank”; “UAE National Bureau of Statistics”).

The other part of the regression analysis includes the examination of the relationship between a growth of the hotel industry and changes in the percentage of contributing to the UAE’s GDP. If development of the industry is an independent variable, the percentage related to the growth rate of the GDP is a dependent variable. Having conducted the regression analysis on the growth of the hotel industry in the UAE during the period of 2001-2012, it is possible to state that during the period of 2009-2012, the percentage of the hotel industry’s contribution mostly increased because of positive changes in influencing factors (as it can be observed with the focus on the first part of the analysis), and during the period of 2009-2012, the GDP also changed, demonstrating positive outcomes.

In 2011, the percentage of contribution was 1.9%, and the UAE’s GDP was $38,930. In 2012, the percentage of the industry’s contribution was 2.0%, and the UAE’s GDP was $40,444 (“UAE National Bureau of Statistics”; “United Arab Emirates GDP 1973-2015”).

Referring to the conducted analyses, it is possible to identify such trends as the capacities to promote the development of the hotel industry while facilitating infrastructure and contributing to the growth of tourism and restaurant business in the country.