$ 82 bn: Dubai to treble tourism income by 2020

Updated 06 May 2013

$ 82 bn: Dubai to treble tourism income by 2020

DUBAI: Dubai aims to treble its annual income from tourism to AED 300 billion ($82 billion) by 2020, which would involve doubling the number of its hotel rooms, a senior official said.
Tourism is crucial to Dubai’s economy, which had a gross domestic product of around $90 billion last year; it supports the emirate’s large retail industry as well as its hospitality sector.
Occupancy at Dubai’s 599 hotels, which have 80,500 rooms combined, was 78 percent in 2012 as the number of visitors rose 9.3 percent from a year ago to 10.16 million, according to data from the Department of Tourism and Commerce Marketing (DTCM).
Helal Saeed Almarri, director-general of the DTCM, said the emirate was likely to have more than 160,000 hotel rooms by the end of the decade and aimed to attract 20 million tourists annually by then.
Most decisions to build hotels would not be made by the Dubai government but by private companies. However, the Dubai government is active in supporting growth of the industry by providing infrastructure, marketing the emirate overseas, adjusting visa policies for visitors and expanding the network of the state-owned Emirates airline.
Saudi Arabia, India and Russia will be the main contributors to expected growth in tourist numbers, Almarri said.
“With Emirates airline and other carriers we focus very much on extending the routes to those markets,” he said.
Dubai’s main airport handled 5.85 million passengers in March, up 20.6 percent from a year earlier, according to airport authorities.
“Airport capacity is not on our critical list of issues to worry about,” said Almarri.
“We can easily put on more flights at any time.”
Dubai is pressing ahead with a $ 7.8 billion plan to expand Dubai International Airport, and plans eventually to migrate traffic to an even bigger facility.”
Traditionally, Dubai has been known for five-star hotels, but more budget hotels have been built in the last few years, appealing to a wider tourist base. Almarri acknowledged this was an important trend.
“The importance in our growth is to have a mix of hotels,” he said. “Over the last five years the hotel offering in Dubai has become more diversified.”
At present, hotel guests stay for an average of 3.76 nights; hotel revenue was $ 5.13 billion in 2012.
Almarri said that to help increase the average length of stay, Dubai would build more entertainment facilities. Plans for several theme parks have been announced in the last few months by companies backed by the government.
“I have every confidence that we will have over the next three to four years coming on line a significant number of tourist attractions which are purely entertainment-like theme parks,” said Almarri.
Having been forced to provision heavily for bad loans following the collapse of Dubai’s real estate market in 2008-2011, banks have become more prudent about financing large-scale projects. Almarri said the theme parks would be funded largely through public-private partnerships.
“Theme parks are procured rather than built in many cases, so come with their own financing packages — the rides are built elsewhere, so you will probably find that many governments around the world are encouraging exports,” he said.

DR Congo’s mining industry hobbled by poor infrastructure

Updated 18 June 2018

DR Congo’s mining industry hobbled by poor infrastructure

  • DR Congo is Africa’s largest copper producer, and while it is the world’s leading source of cobalt, miners can only export concentrated forms of cobalt at 60-70 percent of the market price because of the energy problem.
  • A massive hydropower project on the River Congo, Inga 3, has the potential to power the entire country and even the continent, but it has been frequently delayed.

LUBUMBASHI: Feasting on a global demand for cobalt and copper, the mining industry in the Democratic Republic of Congo is flourishing — but two clouds loom over its sunny outlook.

First is the lack of power, which is holding back the development of the minerals processing sector and crimping the country’s ability to reap higher profits from the boom.

DR Congo is Africa’s largest copper producer, and while it is the world’s leading source of cobalt, miners can only export concentrated forms of cobalt at 60-70 percent of the market price because of the energy problem.

“We have an estimated potential of 100,000 MW/year but only produce 3,000 MW/year,” said Michael Shengo, chief of staff for the provincial mining minister for Haut-Katanga earlier this week, as he opened DRC Mining Week, an annual conference in the southeastern town of Lubumbashi.

A massive hydropower project on the River Congo, Inga 3, has the potential to power the entire country and even the continent, but it has been frequently delayed.

Now the project looks to be back on track, thanks to a joint bid by Spanish and Chinese companies: China Three Gorges Corp. and Actividades de Construccion y Servicios SA.

Bruno Kapandji, director of the Agency for the Development and Promotion of the Grand Inga Project, announced the project’s relaunch in front of miners and investors at the conference.

“Our objective is to start the Inga project this year. It could take five to seven years, maybe up to 11 years,” said Kapandji.

Another challenge for the mining industry, which represents 20 to 25 percent of the country’s GDP, is a new fiscal law to raise taxes.

Seven mining companies, known locally as “the G7,” have argued the new code violates terms of the previous version, which provided a 10-year stability clause after any fiscal change. Some of the companies could be preparing for legal action as a result.

One of its most vocal members, Mark Bristow, CEO of gold mining company Randgold Resources, had a warning for other industries operating in the country. “Attracting investment and developing a mining industry is about trust,” he said, “and I see the government is making guarantees to other industries (solar, electricity), and what do they think when they see our guarantees are being taken away?“

Discussing and signing deals is one thing, but implementing and developing them remains an immense challenge.

The World Bank has ranked DR Congo 182nd country out of 190 for doing business, and the French credit insurer Coface rates it at the same level as Libya, Venezuela, Afghanistan and Syria, due to the political uncertainties, corruption and poor governance.

There are glimmers of hope in other sectors in the troubled country, currently in the grips of an Ebola epidemic and a bloody internal conflict.

In the capital Kinshasa, French sports retailer Decathlon has just opened its first store — a gamble in a city of 10 million where many are struggling to pay for essentials such as food and shelter.

Richard Kalinda, a Franco-Congolese, who once said his dream was opening a shop in his home country, said: “I have to reach 0.1 percent of the population. We are marketing for the middle class, people who have a regular income.”

However, Kalinda added they will have to adapt their prices to the country’s average salary.

At the 5th edition of the “French week” organized by the Franco-Congolese Chamber of Commerce, the theme set the tone for those looking to invest in the country: “Securing business, a challenge and a necessity.”

For the chamber of commerce, opening and bringing international capital in DR Congo requires being very well informed.

“Companies often have to confront administrative and procedural challenges that could be called fiscal harassment,” said the French ambassador to DR Congo, Alain Remy in an interview with Mining and Business magazine.

Debt-ridden Gecamines, the state-mining company, announced this week it struck a recapitalization deal with its Anglo-Swiss partner Glencore who agreed on a $150 million payment.

Gecamines had started legal proceedings to dissolve the Kamoto Copper Mine, but Glencore has
reportedly agreed to write off the $5.6 billion debt to safeguard the joint venture.

“We are entering a period for the mining industry that will be profitable for all,” said Yuma, “but only if relations
between foreign investors and the DRC are more equitable. The new code will make that possible, and I call on everyone to conform to it.”