RAK to reap rewards of SpiceJet move
Low-cost carrier, SpiceJet's, decision to make Ras Al Khaimah International Airport its first international hub outside of India marks a key turning point for the emirate, with experts noting that the move will bring about several long-term economic benefits across various sectors.
The Indian carrier recently signed a memorandum of understanding with RAK International Airport to start direct flights between the emirate and New Delhi from December 2019. The airline will operate five flights a week, with plans to gradually increase the frequency. In addition, SpiceJet has also announced plans to launch an airline which will be based at RAK International Airport.
"SpiceJet's decision to make Ras Al Khaimah International its hub will provide us with much needed thrust to penetrate deep into the Indian market, and will position us as an ideal hub to connect India with the rest of the world," said Sanjay Khanna, CEO at Ras Al Khaimah International Airport. "SpiceJet's operations from Ras Al Khaimah International Airport will also aid the major industries in Ras Al Khaimah by connecting them to Indian trade partners. We are very optimistic about this partnership and the future generally, and we see huge potential for Ras Al Khaimah International Airport to grow, in line with the emirate's ongoing positive development."
In addition to the aviation and logistics sector of the emirate, Khanna noted that the biggest winners of the recent announcement will be the tourism and hospitality sectors. "Ras Al Khaimah is the fourth largest emirate in the UAE, and a very important economic asset. The emirate has established itself as a luxury destination for leisure and adventure travel, whilst maintaining its appeal for sun seeking, beach loving couples and families. In addition to an active tourism sector, Ras Al Khaimah also has a vibrant industrial sector. The emirate is home to 15,000 businesses from 100 countries representing over 50 industries."
He added: "We are targeting 2.9 million tourists by 2025 and the strategy to grow tourism, business, and all sectors across the emirate stems from the vision of His Highness Sheikh Saud bin Saqr Al Qasimi, Member of the Supreme Council and Ruler of Ras Al Khaimah. One crucial element of the emirate's development is an ability to provide easier access for anyone seeking to travel here. SpiceJet will assist in providing new routes and connectivity for tourists, those who live here and the business community, thereby helping the hospitality, tourism and retail sectors, as well as many others, to grow further."
According to a 2019 report by the World Tourism and Travel Council, the tourism sector made up 11.1 per cent of the UAE's GDP in 2018, amounting to Dh164.7 billion. This contribution is expected to rise by three per cent in 2019. Tourism also provided 9.6 per cent of total jobs in 2018, corresponding to around 611,500 positions. This percentage is expected to rise by 2.8 per cent in 2019. In addition, visitor spending in 2018 amounted to Dh136.8 billion, or 8.6 per cent of the country's total exports. This figure is expected to increase by 4.1 per cent in 2019. Total investments in the country in 2018 amounted to Dh26.4 billion, or 8.1 per cent of the total.
Currently, the country has 1,117 hotel establishments, with an average of 173.4 hotel rooms each, and an average occupancy rate of 73.5 per cent. International visitors made up 83 per cent of hotel guests, compared to 17 per cent of local guests. The number of hotel guests visiting the UAE in 2018 reached 25.6 million, an increase of 3.8 per cent compared to 2017. These guests spent a total of 80.4 million hotel nights, an increase of three per cent over 2017.
Experts noted that Ras Al Khaimah will play a major role in the development of the UAE's tourism sector. Last month, Ras Al Khaimah was named as the 'Gulf Tourism Capital', and hospitality officials say that the supply of hotel keys is a major focus moving forward to support the increasing popularity of the destination with both international and domestic tourists. Currently, plans in place to add 6,200 rooms to the 6,700 currently available in the emirate over the next three years. The aim is to further grow to over 12,000 hotel rooms by 2022.
"The decision by SpiceJet to make Ras Al Khaimah its international hub will further catalyse the tourism sector, especially from India, one of the largest markets for the UAE, as well as contribute to increased investments in Ras Al Khaimah," said Abdulla Al Abdouli, CEO of Marjan.
"This is another testament to the growing confidence of international businesses in the potential offered by the emirate. Enhanced airline connectivity has an add-on effect on the economy, with more visitors from core markets - especially from Asia - discovering the value proposition that Ras Al Khaimah has to offer," he said.
A haven for businesses
Ras Al Khaimah is a haven for businesses due to its distinguished natural location, said Ramy Jallad, group CEO of Ras Al Khaimah Economic Zone (RAKEZ).
"The emirate stretches along the shore of the Arabian Gulf, adjacent to the strategic Strait of Hormuz, and has substantial logistical hubs that make moving goods to and from the region very efficient," he said. "These are complemented by solutions we have on offer at RAKEZ, from bespoke facilities to comprehensive business support in a one-stop shop. We are also one of the few zones offering free zone and mainland solutions, as well as the only one to offer all types of licences."
Jallad also added that SpiceJet choosing Ras Al Khaimah as their first international hub is a testament to the emirate being home to Indians and their businesses. "In RAKEZ alone, nearly a quarter of our business community are from India. I'm positive that more international brands will take notice of the unique advantages offered by the emirate, as we continuously strive to cement Ras Al Khaimah's position in the global economic map."
"From a macro level, our value propositions - ease of doing business, cost-effectiveness and customised products and services - have greatly enhanced the emirate's reputation as an ideal place to set up and grow profitable companies. We have contributed to Ras Al Khaimah's successful economic diversification and we're expecting to see continued growth on various sectors, such as manufacturing, IT, services, education, media, trading, and logistics. Our efforts have helped Ras Al Khaimah become a complete work, live and play environment that is part of the UAE ecosystem," he said.
Attractive returns on investments
The government's vision to promote economic diversification, and focus on strengthening the tourism and hospitality sectors, has been a key factor in Ras Al Khaimah's growth as a vibrant business destination, said Abdulla Al Abdouli, CEO of Marjan.
"As the master developer of freehold properties in Ras Al Khaimah, we have already achieved significant benchmarks in attracting international investments, particularly in the tourism sector, in our flagship development Al Marjan Island," he said. "A recent hotel investment market study commissioned by Marjan reiterates the strong investment potential offered by the emirate for hotel and hospitality operations. Comparing the hospitality sector performance and potential of Ras Al Khaimah against 23 international waterfront leisure destinations from across the world, the study showed that the tourism and hospitality sector assures significant growth opportunity."
The study revealed that the returns for hotel investors offered by Ras Al Khaimah are among the world's highest at 11 per cent to 12 per cent, while the demand for hotel rooms, led by increased tourist arrivals, is also catalysing the sector. By 2022, the emirate is projected to have a hotel inventory that is greater than Nice, Ibiza, and Cannes.
"In Marjan's destinations, investors enjoy 100 per cent foreign ownership, and 100 per cent repatriation of capital and profits," Al Abdouli said. "Other incentives include no corporate tax and zero personal tax. Additionally, there are no foreign exchange contracts reducing extra costs and any uncertainties. Marjan will continue to leverage the growth opportunity, as well as contribute to strengthening the tourism and infrastructure development of Ras Al Khaimah, which welcomes the world with amazing attractions - from natural beaches and mangroves to the world's largest zipline and more."
GCC's fastest growing tourism destination
Ras Al Khaimah has been logging in record guest numbers from both the domestic and overseas markets, as well as record occupancy and length-of-stay - making it the GCC region's fastest-growing tourism destination, as well as an attractive proposition for investors, said Raki Philips, CEO of the Ras Al Khaimah Tourism Development Authority (RAKTDA).
"Ras Al Khaimah is considered the Arabian Gulf's most diverse destination offering visitors rewarding experiences that include pristine beaches, rugged mountains, luxury resorts, and wilderness camps. It's this diversity of landscape and offering which has led to a surge in the emirate's recent visitor levels," he said.
He added: "India has held its position as one of the key source markets responsible for a big share of the increasing number of inbound tourists to Ras Al Khaimah over the years. We are honoured to be welcoming further visitors from India and the region with India's SpiceJet setting up its first international hub in the emirate, with plans to launch an airline from here. The new flight operation will provide outbound and transit travelers from India a smoother and seamless access to Ras Al Khaimah."
Similarly, Benoy Kurien, group CEO at Al Hamra, noted that the emirate offers several unique experiences that further define it as one of the fastest-growing regional tourism and investment destinations.
"The recent announcement of SpiceJet opening its international hub in Ras Al Khaimah Airport is an important move that will add value to the emirate's economy. With its strategic location in the Middle East, the airport, with added connectivity now, will drive both trade and tourism. Ras Al Khaimah ensures the highest standards of security and stability and has a vibrant economy. We provide favourable business and lifestyle environment for international investors with several benefits including a tax-free corporate environment, protection of property rights, relatively low cost of living, open access to local and regional markets. We have also seen strong growth in tourism - both business and leisure."
He added: "We are delighted to launch Al Hamra Waterfront spanning over 26,068sqm, equivalent to the size of about four FIFA standard football fields. It is billed as a must-visit leisure destination in the Northern Emirates, featuring a range of licensed lounges and specialty restaurants."
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