As one of the most respected experts in the tourism and hospitality sector, Mr. Ghassan Aridi, Executive Chairman of Paramount Hotels & Resorts and CEO of Alpha Tours, gives The Worldfolio his perspective on the role of innovation in the tourism industry and how Dubai has been able to become one of the most recognizable cities in the world.
How do you think the Expo 2020 will impact on the tourism industry?
The UAE has become a very important destination for big events. More than 10 years ago Dubai held an IMF expo that was a very successful event.
So Dubai has proved that it is able to organize important events where we receive more than 100 personalities, including presidents and prime ministers, plus all top VIPs from around the world.
Expo 2020 will be different. A lot of people are seeing the opportunities in this big event and are starting to invest now to be able to reach to that date with a very big and interesting business case.
Currently, we have in Dubai the full infrastructure and the area of the expo is also ready, so people know exactly where to invest. The expo area is where everybody invests in tourism now.
Tourism is going to be one of the top sectors that are going to benefit from Expo 2020. The expo will go on for six months and 20-25 million people are expected.
So big it means figures, big expectations and big preparation.
Global events are having an increasing impact on the tourism sector. You recently represented both Paramount Hotels & Resorts and Alpha Tours at the Arabian Travel Market (ATM) 2015 exhibition. What were the highlights of this event and what are your expectations for next year’s ATM?
Paramount was awarded with ATM’s Best Stand for Doing Business this year. It was a very nice stand and it was full of people. We’ve done many contracts and great deals and projects for the years to come.
We’ve concluded about 10 projects that are coming in 10 years from now. ATM is a global event, ranked number four in the world.
An increasing number of people choose the GCC as their destination, and even more importantly many stakeholders are interested in the GCC, as the outbound tourism segment here is worth $25 billion; this is why the ATM gets bigger each year.
We also receive tourists from Europe, Asia, the U.S. and Africa.
Alpha Tours with its new Identity Alpha Destination is the leading Destination Management Company in the Arab World and we handle over a million tourists a year. Alpha Tours offers a big range of services, including city tours, shopping tours and individual tours, a gourmet bus, helicopter tours, diving, skydiving, safaris, fishing, all range of boats and yachts, and a lot of luxury services.
Over recent years we’ve seen people coming back to Dubai bringing somebody new to enjoy the place, which is a very good sign for us.
Last year 13.5 million tourists visited Dubai so this year they will easily exceed the 15 million mark. It’s expected that we will reach 20 million visitors in 2020, and we’ll add some few millions because of Expo Dubai.
Underlining this point about the rapid growth of the tourism and entertainment sector, DTCM expects 139 new establishments, including 91 hotels and 48 hotel apartments, to enter the market by 2016. Do you think this growth is going to be sustainable beyond 2020?
Well, business is increasing so definitely there has to be an increase in supply and demand. We have to provide the right accommodation, the right infrastructure.
There are some countries and tourist destinations around the world that have 40 hotels. We are adding in two years 91 hotels.
Today in Dubai there are about 600 hotels, so we are adding like 10 or 20% in one year; it’s too much.
The demand for hotels is very high; the country is peaking up rapidly and hasn’t reached the top yet, so there’s still room for growth.
The necessary infrastructure is there; DTCM is providing great support in terms of policies. And the exponential growth of the aviation sector with Emirates and Etihad airlines’ expansion reaching new destinations is a crucial factor for our industry. So I see all the necessary ingredients in the right place to sustain this growth.
If we look at the macroeconomic landscape, what is the impact of a weak Euro and Ruble, on the one hand; and the opportunities arising from a strong Dollar, on the other?
This year was definitely a challenging year. During the last six months of last year and the first six months of this year, the Russian market has slowed down due to the sanctions and the Ruble.
Also the Euro lost nearly 20%, making Dubai more expensive to Europeans by more than 20% as all our tariffs are in dollars. These events modified some of our expected figures.
Nevertheless, we had a big increase from the U.K. market and huge double-digit increases from other markets.
So thanks to new markets that are growing so fast, like the Chinese and Indian markets, we are still doing better than last year.
Millennials will represent 50% of customers in the hospitality industry by 2025; they will expect a deeper link between tourism services and how they manage their everyday lives. What do you think is the impact of the growing penetration of internet, smartphones, and higher connectivity on the tourism sector?
This is of course playing a very important role. Ten years ago 70% of tourists in the U.S. bought online, around 40% in Europe, the lowest rates being in Italy and France and the highest in the Scandinavian countries; and less than 1% in the Middle East.
Now the scenario is completely different: 90% of tourists buy online in the U.S. and over 70% in Europe, although Italians and French remain behind with a 50% rate, which shows that there are still some people who like touching the brochure.
In Alpha Tours, for instance, we don’t make brochures anymore. We are now using social media platforms and smartphone applications.
We’re engaged with social media because it’s not the future but rather the present of our industry.
The “UN World Tourism Organization (UNWTO) 2014” Highlights reports flat growth for the tourism sector in the Middle East. How does the UAE compare to this regional trend?
The UAE is the leader in tourism for the incoming sector, while Saudi Arabia is the leader for the outgoing. Saudi Arabia has the religious tourism that attracts the domestic market, which is totally different from ours.
Dubai is recognized worldwide for its entertainment, luxury and tourism sector. Focusing now on Paramount, what is the main concept behind the experience in hospitality that you want to offer? As you mentioned, there’s still room for growth but there’s higher competition as well, so what is your niche market?
It’s a very good question, thank you; it gives me the opportunity to highlight the innovative concept behind Paramount Hotels & Resorts. Paramount is a themed hotel.
Far from being traditional, it’s trendy and it has the Californian glamour. We successfully linked the movie industry with hospitality. So, every Paramount guest is treated like a star.
Usually if you don’t see the sign in a hotel, you might get confused. At the end of the day, the large majority of hotels look all very similar – staff uniforms are very similar and even the food presentation is the same.
However, when you are in Paramount you realize immediately that you are in a Paramount hotel, it’s different. You’ll see a lot of movie technology integrated to the hotel concept.
Our unique design, lighting, art and high-tech features define us.
What would you say are the main attractions in terms of ecotourism in the UAE?
There’s a lot of room for ecotourism here. They are making a big effort to have that in Dubai, in Abu Dhabi they have a full city for that, very good products, in other Emirates as well.
Dubai has a very big share of the UAE’s tourism market and it’s is classified as an “affordable luxury destination.”
What we don’t have in Dubai is four-star hotels on the beach as you’ll find at some other beautiful destinations like Fujairah or Ras al Khaimah – where by the way they have been doing a very good job in the past year or so.
This is why Dubai is very difficult to imitate, a great job has been done, with a very good vision.
What would you say is the main secret behind the incredible development of Dubai and what do you think the rest of the world can learn from this experience?
In Dubai they study our clients, what tourists need. So in Dubai they create products for them and a new concept of tourism, which is now what everybody wants.
There are only around 1% of tourists that look for history, heritage sites and culture; while the rest looks for entertainment, comfort, leisure, shopping, and spas.
That’s tourism now, and this is what we have in Dubai. This is the secret of Dubai.