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Le Meridien in Fujairah expects successful 2013 (Abdul Basit) / 13 May 2013 Le Meridien Al Aqah Beach Resort in Fujairah expects 2013 will be another successful year with high occupancy rate and a double-digit growth over last year, according to general manager Patrick Antaki. The property is located on a 230 metres stretch of a pristine beach and fronted by the Indian Ocean with the breath-taking Hajar Mountains forming the backdrop. “The first quarter was ahead of last year. If rest of the year is going to be like Q1then it’s going to be a great year,” Antaki told Khaleej Times in an interview. Occupancy is almost full, he said, adding: “We closed March with around 90 per cent [occupancy]. We will probably look at 10 to 12 per cent better 2013 than last year.” Tourists’ arrival in Fujairah is increasing significantly every year. In 2012, the emirate hosted 1.2 million tourists, compared to 750,000 in 2011. At the moment, Fujairah has 2,800 hotel rooms, he said, adding that extra 1,000 rooms are going to open in the next 12 months. He mentioned that there is a lot to see in Fujairah as the emirate is home to most of the country’s heritage sites. In addition to that the hotel provides a lot of sea-related activities every day. “We also want to diversify the guests experience and that’s the reason the hotel is starting to set up excursion with helidubai and also planning seaplane facility from Dubai to Fujairah,” he explained. In December last year, the hotel celebrated its 10th anniversary and this year the hotel will undergo with the first phase of refurbishment. “We will spend Dh50 million on refurbishment, which will start from next month. We will do 100 rooms this year and remaining in next summer.” The hotel is also pending money to provide seamless connectivity of tablets and smartphones to TVs, so the guest can see photos and watch movies from their own devices, he informed. Antaki, who is also general manager of Al Maha Desert Resort and Spa, said it’s a luxury property and despite high rates it’s doing very well. GCC nations, Mena oil exporters face growth IMF projects their average GDP to fall from 5.7 in 2012 to 3.2 in 2013 • By Babu Das Augustine, Deputy Business Editor Dubai: Gulf countries and other oil exporters from the Middle East and Africa are expected to face a deceleration in economic growth this year, according to the latest update of the regional economic outlook from the International Monetary Fund (IMF). The region’s oil-exporting countries achieved robust growth of 5.7 per cent in 2012 on account of the almost complete restoration of Libya’s oil production and strong expansion in GCC countries. “For the region as whole economic growth is projected to fall to 3.2 per cent in 2013, as oil production growth pauses in the context of subdued global oil demand. However, non-oil growth continues at healthy rates of about 4.5 percent on average,” said Masood Ahmad, director of the IMF’s Middle East Department. For Gulf oil exporters, GDP growth is projected to moderate from 5.8 per cent last year to 5 per cent this year. Despite the decline in growth rates, the fiscal health of Gulf oil exporters is expected to remain stable in the short to medium term. However, the IMF warned that the region’s economies should be mindful of the ever rising break-even oil prices and the looming fiscal deficits that could limit the growth of these economies in the medium term. “Sharp increases in fiscal expenditure resulting from the prevailing socio-political compulsions could eventually lead to [the] depletion of reserves and prolonged periods of fiscal deficits,” Ahmad said. Elevated oil and gas export volumes and prices allowed oil exporters to accumulate current account surpluses of about $440 billion (Dh1.6 trillion) in 2012. A small decline in projected global oil prices (based on futures markets) and an expected rise in imports will lead to a somewhat smaller — but still sizeable — current account surplus of about $370 billion this year. Fiscal break-even oil prices — the price levels that would ensure that fiscal accounts are in balance at a given level of spending — have been trending upward in most countries. In several countries, some degree of fiscal consolidation to rein in spending and bring down the government deficit will need to be considered to bring fiscal balances down to more sustainable levels, the IMF said. The IMF expects a decline in oil prices due to slower economic growth across the world, new supplies from Iraq, Libya and new shale oil supplies coming onto the market. “To build resilience to a possible sustained decrease in the oil price, oil exporters should contain increases in hard-to-reverse current government expenditures, like wage [bills] and subsidies,” Ahmad said. Effective social and capital expenditure can decrease dependence on oil revenues in the long term by promoting future growth in non-energy sectors, the IMF said, adding that high-quality education can support job creation for nationals. Tim Fox, chief economist at Emirates NBD, said while the growth supported by the oil sector is declining in the GCC, growth rates in the region are still much better compared to many parts of the world. “We expect the non-oil sector growth to compensate for the decline in oil sector growth over time with Saudi Arabia and the UAE topping performance in the non-oil sector,” Fox said. IMF stays upbeat on Dubai Isaac John / 22 May 2013 The International Monetary Fund, or IMF, said on Tuesday that it was confident of Dubai’s ability to meet all financial obligations given its track record of successfully managing payment rescheduling. Masood Ahmed, director of the IMF’s Middle East and Central Asia Department, said Dubai government-related entities had so far managed debt rescheduling quite successfully since 2009. Speaking to reporters, Ahmed said debt levels in Dubai remained high with substantial debt roll to be witnessed over the next few years. Calling for better communication between the emirate and the investors, Ahmed said Dubai was on track to record a four per cent growth in 2013 on the back of a bounce back in construction and logistics industries. According to IMF estimates, Dubai and its entities spent about $113 billion to transform the emirate into a sought-after global tourism and commercial hub. Ahmed also observed that Dubai needed to keep a moderate pace in its property sector to keep at bay a boom-bust scenario. Launching IMF’s Regional Economic Outlook Update for the Middle East North Africa, Afghanistan, and Pakistan region, or Menap, Ahmed said oil producers were expected to scale back the rate of production from an average of 5.7 per cent in 2012 to 3.2 percent this year. “This is due to modest global oil demand; however, continued strong public spending is expected to support non-oil growth at comfortable levels in many of these countries.” Ahmed said the GCC states would see growth ease from six per cent in 2012 to four per cent this year and next. According to the report, last year’s subdued growth in Menap oil importers is expected to improve by three per cent in 2013. However this will not be sufficient to make sizeable inroads into the region’s large unemployment pool. The IMF report also highlights the need for Arab countries in transition, still undergoing social unrest, impaired economic conditions, and complex political transition; to undertake difficult economic policy choices implemented in a socially balanced way. Ahmed said resolute policy action, across the region, would be necessary this year, for both oil exporter and oil importer countries. “For Menap oil exporters, further strengthening of fiscal and external positions will be important to reduce their vulnerability to potential material oil price decline.” The IMF’s baseline scenario for oil prices in 2013 is $100 a barrel, lower than the levels at which Iran, Bahrain and Algeria can balance their budget. “For Arab countries in transition, decisive policy action will be essential, given diminished fiscal and foreign exchange buffers. Recent subsidy reforms in some countries, paired with measures to implement more targeted social protection, have begun to reduce fiscal and international reserve pressures,” Ahmed said. Jeff Singer, CEO of DIFC Authority, pointed out that the IMF report indicated the need for job creation in the region and for policymakers to design and implement a bold agenda of structural reforms. Dubai popular cruise tourism destination Rohma Sadaqat / 22 May 2013 Dubai is reinforcing its position as a destination of choice for cruise tourism by welcoming newly renovated luxury liner, Mariner of the Seas on its maiden call to the emirate. The liner, a member of Royal Caribbean International’s cruise line fleet, arrived at Port Rashid on Tuesday to a traditional welcome ceremony, organised by Dubai Cruise Tourism, a department of the Department of Tourism and Commerce Marketing (DTCM). “Dubai is increasingly consolidating its position as a destination of choice for cruise tourism,” said Ahmad Belhoul, CEO of strategy and tourism sector development at DTCM. “In 2012 we received 105 ship calls carrying almost 408,000 visitors and expect this figure to increase to more than 420,000 from 110 ship calls this year. This will continue to increase in 2014 and 2015 with an annual growth rate that is in line with the projected global cruise tourist growth of 3 per cent and we are looking forward to receiving over 450,000 passengers in 2015.” Discussing the reasons behind Dubai’s steep increase in popularity as a cruise destination, Belhoul accredited the sector’s growth to the combination of meticulous planning, judicious infrastructure development and targeted investment, combined with Dubai’s global appeal as a tourism destination. Dubai Cruise Tourism currently operates three facilities on a pier stretch of 1900 meters that can accommodate up to six cruise ships simultaneously, making it the most advanced and largest cruise tourism facility in the Middle East. “Dubai is currently the homeport for four luxury cruise lines and features in the itineraries of no less than 20 of the world’s leading cruise lines. Since Royal Caribbean International first started its operations in the Middle East, choosing Dubai as its homeport in the region, we have developed a highly successful working relationship and so are very pleased to be able to welcome the beautiful Mariner of the Seas on its journey to the Far East,” said Belhoul. “We look forward to continuing to work together and foresee many more prosperous cruise seasons in the future.” Lakshmi Durai, executive director of Royal Caribbean International Middle East, said: “Mariner of the Seas is one of the biggest cruise ships to arrive in Dubai yet from our fleet and belongs to the Voyager class of ships that revolutionised the cruise industry by introducing the active cruise vacation, through debuting innovations such as the first onboard ice-skating rink and rock-climbing wall.” When asked whether the recent economic downturn had affected Royal Caribbean International’s operations, Durai revealed that the company had to cut down on their prices since their yield was down but that the company had recovered fairly quickly. “We didn’t have to compromise much and we are having a fabulous year so far,” Durai told Khaleej Times. Durai also revealed that the company would be adding two new ships, under the Quantum series, to its fleet in the coming years. Interior companies see growing demand Hospitality interior spend in GCC to reach $1.62 billion in 2013 • By Deena Kamel YousefStaff Reporter Dubai:Local and international design companies say demand is increasing for hospitality interiors and fit-outs due to a growing number of hotel projects announced recently in Dubai. “Naturally, after 2008 there has been a return to progress in all sectors, in infrastructure, government support and people’s needs. We see that the UAE and GCC’s growth and development has exceeded that of most countries in the world,” Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, told Gulf News after opening the International Design Exhibition (Index) on Monday. Al Aqili Furnishings, a UAE-based furniture company, saw demand for furniture grow 20 to 30 per cent so far in 2013 compared to the same time last year. “There has been an improvement in business from the hospitality and residential sectors since the beginning of the year. There are new hotels coming up and refurbishments.” said Rashid Yousif, business director of Al Aqili, on the sidelines of the International Design Exhibition (Index) that opened Monday. “For local furniture manufacturers, they mainly supply hotels and there’s more than enough work.” The hospitality sector, at 19 per cent of total interiors and fitouts spends in the GCC, will be worth $1.62 billion in 2013, up from $1.33 billion in 2012, according to a study by management consultancy Ventures Middle East. “The growth in the hospitality sector and holiday homes has added great demand to the furniture and fittings industry,” said Hilal Al Marri, chief executive of the Dubai World Trade Centre, after the show opening. However, some local interiors companies are still struggling to catch up with their international counterparts for business with the hospitality sector here. “It depends on the client’s budget and delivery time. but in design no one can exceed the European companies…we just don’t have the technology for some things,” said Bassam Merheb, head of sourcing at Galaxy Trading, a UAE-based company that supplied ceramics to The Address Downtown hotel. La Farma, an Italian customised and hand-made furniture company, participated in Index to seek opportunities in Dubai. “We hope to target villas and boutique hotels with customisation in design and specifications,” said Chiara Del Bene, manager of the family business. Others were more sceptical of the interiors work done here. “The hotel projects here look impressive but they’re made cheaply and commercially. They aim to make a profit in five years and then re-decorate,” said Thomas Faustig, president of chandelier manufacturer Faustig. “There’s no long-term décor investment, everything is like a movie mock-up.” Instead, Faustig is targeting work in the private palaces in Dubai, which could cost starting from €100,000, he said. Dubai has announced several hotel projects including 100 hotels in the Mohammad Bin Rashid City and the $1 billion Viceroy Hotel on the Palm Jumeirah. UAE sees capital influx Issac John / 21 May 2013 Ideal local investment opportunities and political stability have triggered an increased inflow of private capital, mostly from India, Russia and China, into the UAE, a study by Invesco shows. The UAE, which has become the key beneficiary of private capital flow into the GCC, is attracting investments mostly from emerging markets, the investment company said on Monday. Participants in the study estimate that 43 per cent of private capital flow into the UAE is from emerging markets including 15 per cent from India, 10 per cent from Russia, and seven per cent from China. Invesco, however, did not provide specific data on the size of the capital flow. While capital flow from emerging markets overtook those from developed markets that accounted only for just 13 per cent of the total, over a third (35 per cent) of capital into the UAE came from the wider Mena region and nine per cent from the other GCC countries. Invesco study is in line with a recent private capital survey by Cluttons showing that Dubai remained the most attractive destination to private investors within the GCC region, with Riyadh and Doha emerging as strong secondary and tertiary target locations, respectively. According to Cluttons study, Dubai emerged as the top investment target for both investors from the UAE and those from all other cities surveyed, with 80 per cent of high networth individuals very likely to make an investment in Dubai during 2013. “While capital is flowing into the UAE, overall capital in remaining GCC markets including Bahrain, Oman, Kuwait and Qatar appears to be exiting home markets, making the UAE the key focus for capital flowing into the region,” Invesco report said. Nick Tolchard, head of Invesco Middle East, said the study is supported by national statistics showing a nine per cent net increase in UAE bank deposits during 2012, and a 17 per cent annualised growth rate in UAE property prices over the same period — both indicators of increasing capital flow. According to a third of participants, the key factor luring private capital into the UAE is its relative political stability compared to the Mena region. “This is a consequence of continued regional instability — not just in Syria but in Egypt and other parts of North Africa.” The second driver for 29 per cent of participants is the local investment opportunity. “This is the overriding reason for Indian, Russian and Chinese markets investing in the region — an example of ‘South-South’ trade in action,” said study. Tolchard said the latest study provided a strong indication of a structural shift in the UAE’s fortunes. The UAE seems to be showing signs of developing a leading position as a regional hub between Europe and Asia. “As an investment centre, the UAE has been proactive in attempting to build relationships and encourage investment from emerging markets so these inflows could also be indicative of UAE policy rather than simply emerging markets seizing the opportunity. This re-balancing has been important to the UAE recovery, as developed markets continue to focus on the economic situation closer to home.”