UAE travel industry rakes in nearly Dh6.5b
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Gulf News 29 March, 2004
The Travel and Tourism Business Group under the Dubai Chamber of Commerce and Industry (DCCI) is to finalize its constitution
soon, which will help the group to regulate the sector once it comes into effect.
Over 500 travel agencies, employing about 4,000 professionals, presently control the travel market in the UAE, which generated an estimated Dh6.5 billion in business last year, according to Rashid Al Noori, senior vice-president of Dnata Agencies.The new body will also look into issues relating to travel agent commissions, cross-border ticket sales as well as improvements in professionalism in the industry.Dnata Agencies, said Al Noori, is on an ambitious expansion plan. Following the launch of its operations in Kuwait last year, it has secured a licence to operate in Saudi Arabia.The travel and tourism industry, which represents over 17 per cent of Dubai's GDP, recorded double-digit growth last year despite difficulties, he said. The outlook for this year remains high.Al Noori heads Dnata Agencies, the specialised arm of the Emirates Group engaged in providing world-class travel services across a diverse product and service portfolio, including representation of cruise liners in the UAE and the Middle East.A graduate in Airline Management, Al Noori embarked upon his successful career in travel when he joined the group in 1978. He has since held varied positions from the challenging world of airport handling to the precise and defined areas of finance, planning and marketing in the airline and travel industry.Dnata is now home to over 30 international airlines, employs over 600 staff and is embarking on a regional and global expansion programme, living up to its positioning
In an exclusive interview with Gulf News, Al Noori spoke on various travel related issues.
Gulf News: How was 2003 in terms of travel and tourism in Dubai, the UAE, as well as the Gulf?
Rashid Al Noori: In terms of performance, last year was very good for us as well as the rest of the Gulf. We achieved double digit growth in the travel and tourism sectors. Dubai has a clear vision, that is to transform itself into a unique place in the world for tourism development. The year 2003 was not an exception. Over the years, we have established a credible system of meeting people's expectations. The tourism industry now contributes about 17 per cent to the emirate's GDP which speaks of the sector's growth. Dubai's hotel and serviced apartments have recorded an average 75 per cent occupancy, despite the negative impacts of the war in Iraq as well as the outbreak of SARS last year. In the Gulf, Qatar is focusing on tourism and has a number of projects coming up. Many other Gulf states also have undertaken a number of steps to expand their tourism infrastructure. In coming years, we will see more tourists coming to the Gulf which will help the industry grow further.
GN: How many air tickets were issued last year in the UAE? What would be the value of the tickets sold last year?
RAN: We do not have an actual account of this. But the value of the air tickets sold last year could well reach an estimated Dh6.5 billion. The document (ticket) count recorded a double-digit growth, which is above the world average. The Dubai market accounts for about 60 per cent of the total UAE-wide ticket sales. About 75 per cent of documents are issued through the business settlement plan (BSP).
GN: What has been Dnata's market share?
RAN: We have a very substantial market share. We are not only the largest travel management company in the region, but we offer value-added services to clients. We employ about 600 frontline ticketing agents and customer service professionals, in over 40 outlets. Dnata is the GSA for over 30 airlines. We have the largest corporate clientele base in the region.
GN: What steps are you are taking under the Travel and Tourism Group (formed under the Dubai Chamber of Commerce and Industry) to regulate the travel market?
RAN: We are working with government departments to finalise the draft constitution, at the same time increasing the membership base of the group.
When we are fully ready as an organisation, we will undertake appropriate steps in order to regulate the industry and bring in more professionalism in their work. There will be training facilities offered to them.
GN: How many travel agents are active in the UAE? How many are there in Dubai?
RAN: Over 1,400 travel agencies have been licensed in the UAE, of which about 500 are now active. Dubai has issued over 500 licences, of which 250 are currently active in the market. Over 4,000 travel professionals are currently employed in the sector, including 600 working with Dnata.
GN: There are a lot of freelancers operating illegally in the market. Many travel agents in the UAE do not follow IATA rules and the BSP. Tickets are sold in some groceries. What are you doing to stop this practice?
RAN: Most travel agents are following the business and settlement plan in issuing air tickets. However, there are some players in the market who do not follow it. Over 75 per cent of travel agents now follow the BSP system, while the remaining 25 per cent still issue hand-written documents. This should stop and eventually all the travel agencies will come under the business settlement plan system, which will help the travel and tourism industry of this country to become more professional. We do not want to police the system, rather encourage players to become more professional in conducting their business.
GN: Is there a possibility of forming a UAE-wide travel and tourism association to regulate the country's travel and tourism industry?
RAN: We interact on a regular basis to discuss issues relating to the travel and tourism sector. During 2000, all the leading travel and tour operators belonging to all the seven emirates used to coordinate on a regular basis, which has been reduced over the last few years. We do meet and discuss issues as and when needed. However, there have not been any moves to create a federal body, primarily because regulations and practices in each emirate are different.
GN: How is Dnata's expansion going on?
RAN: Dnata Agencies has obtained a licence to operate in Saudi Arabia. We are now working on the overall set up of our Saudi operations expected to be up and running by May this year. This is part of a Gulf-wide expansion undertaken by the management of Dnata Agencies. We are planning to increase the number of travel shops and outlets in the UAE, from the current 40, by adding another 10 this year. We are looking closely at the Oman and Qatar markets, which are growing due to the development of infrastructure and the tourism industry.
GN: Any thoughts of penetrating the Iraqi market? I believe Dnata will be involved in Basra Airport's ground handling if DCA decides to undertake the airport's management. Can you update us on this and how long will it take?
RAN: Iraq is an emerging and lucrative market for us. An air bridge between Baghdad and the rest of the world is expected to begin soon, which will require proper travel services and we have our plans for the Iraqi market once the security situation allows us to penetrate the market. Our business plan for Iraq is very high on the agenda. We have preparations to deploy and launch operations in a short span of time.
GN: How are your operations in Kuwait going?
RAN: We started in Kuwait last September. It is up and running. Once it stabilises, it will expand on its own.
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