Hospitality rebound
The encouraging performance of Dubai’s hospitality sector is a strong indicator of the economy making inroads in its ‘traditional’ growth sectors.
A recent market survey reports that the revenue per available room (RevPAR) at Dubai’s hotels has increased by 9.6 per cent in May, backed by a growth in the average room rate by 6.5 per cent. This has also contributed to the growth in gross operating profit per available room by 12.4 per cent.
Despite the advent of summer, Dubai’s hotels are recording impressive occupancy, led by strong tourist arrivals from the GCC region. The ability of the city to drive visitors from across the region also owes to the concerted initiatives that Dubai has taken in the events and retail sector.
Dubai Summer Surprises, for example, continues to play a key role in revitalising the retail and hospitality sector during the summer months. The festival calendar of the city receives continuity with ‘Ramadan in Dubai’ and ‘Eid in Dubai,’ giving visitors to the city enough reason for a delightful and value-added holiday.
Dubai’s growth story has strong inter-linkages with the tourism sector. The two-pronged approach of developing the aviation and hospitality infrastructure have yielded tangible results, contributing to robust tourist arrivals, which in turn energises other allied sectors such as retail and car rentals.
The global financial crisis was a dampener for the global hospitality trade. People cut down on travels, even corporates looked for cheaper alternatives. That Dubai did not stall its hospitality infrastructure development in response to the temporary setback speaks volumes about the importance of long-term planning.
Today, even as traditional tourist destinations are struggling to find the right numbers to prime their economies, Dubai has made strong headways in tourism growth.
The recent announcement to house a 300-room luxury hotel inside the majestic Queen Elizabeth 2 is another example of how Dubai has successfully maneuvered the challenges of the crisis through positive policy decisions. The hotel is expected to appeal to a niche segment among tourists — the cruise travellers.
According to reports, in April alone five cruise ships docked at the Dubai Cruise Terminals, bringing more than 19,000 tourists to the city, the largest number of visitors at the Port Rashid facility on a single day. Cruise tourism is one of the fast-growing sectors globally, and Dubai’s location provides it a geographic advantage.
It is in this context that the decision to develop QE2 as a luxury hotel must be perceived, rather than portraying it as a scaling back from original plans. The success of any business model depends on its ability to be flexible and its ability to align with market realities.
Dubai has demonstrated its strengths in driving the growth of tourism and hospitality, sectors that are crucial for overall development. The spirit of welcome that Dubai extends to its visitors, thus, has a wider positive effect.
Boost for Obamacare
The US Supreme Court ruling, upholding most of President Barack Obama’s healthcare reforms proposals, will come as a big relief for the president’s re-election campaign.
Obama, who vowed to reform the country’s bloated and wasteful healthcare infrastructure, steered the Affordable Care Act, popularly known as Obamacare, through the US Senate in December 2009 and the House of Representatives three months later.
The landmark legislation, which would expand health insurance coverage to more than 30 million Americans — sharply reducing the number of uninsured Americans from the present 50 million — has been one of the most significant achievements of Obama’s presidency. With the Supreme Court now endorsing the legislation, voting 5-4 in favour of the act, what seemed to be a flagging campaign for the American president’s re-election, will now get a new lease of life.
Interestingly, it was the crucial vote by Chief Justice John Roberts, a Republican appointee, who joined four other judges appointed by Democrats, which helped save the act. Obamacare aims to fix America’s healthcare system, expanding coverage to millions who are outside the system and also curbing soaring costs. Health spending in the US has doubled to more than $2.6 trillion over the past 10 years, but despite escalating costs, an estimated 45,000 people die every year because of lack of health insurance.
The vast majority of the poor who are outside the healthcare net are forced to visit hospital emergency rooms, pushing up costs for all. Obamacare, by providing insurance coverage to the poor, aims at not just saving lives, but even slashing healthcare budgets. The chief justice in his order pointed out that while the federal government did not have the power to order people to buy health insurance it has the power to impose “a tax on those without health insurance.” He declared the act to be constitutional as the individual mandate requirement, which makes it compulsory for people to buy health insurance by 2014 or face a penalty, could “reasonably be read as a tax.”
Republicans, however, see red when they hear the word ‘tax.’ So even as they failed to get the court declare the act as unconstitutional, they are gloating over the fact that they have a stick now to beat Obama and the Democrats with. The voting public has a distaste for the word tax and it is easy to manipulate fears of the imposition of a new tax.
Differences though appear to have surfaced in the Republican camp, with an aide to Mitt Romney, the likely GOP Presidential nominee — and author of a similar healthcare law in the state of Massachusetts when he was the governor — reiterating that the mechanism to enforce mandate was a penalty and not a tax.
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