I am on the road this week, recruiting students for the Full-time UST MBA program in Dubai and Abu Dhabi. This is a relatively new market for us to explore, but with all of the growth here in the last decade there is increasing demand for business leaders.
I am doing my best to learn about the economic marketplace here in the Middle East, just as each of the students I have met at our fairs are trying to understand the value of business education in Minnesota. Compared to most Americans' stereotypical view of this region, these two cities are highly modern and "westernized."
Tourism is a major industry, contributing more than 16% of the United Arab Emirates GDP, and employing 13% of the labor force, according to Middle East Executive magazine. According to the MasterCard index survey, Dubai is #9 in "global arrivals" this year, and hotel occupancy rates are averaging near 80%. You've probably seen pictures of some of the amazing hotels here in Dubai and the man-made palm islands where new resorts are springing up. The magazine notes there are 52,800 hotel rooms in Dubai with another 10,000 expected in the next year or two (there are about 67,000 rooms in Las Vegas, for comparison, and somewhere around 7,000 or 8,000 in Minneapolis).
What are all the visitors coming for? Mostly relaxation and fun in the sun, it seems. The are lots of water parks and beaches. The emirates are working to create other draws too, like the recent Abu Dhabi F1 Grand Prix and this week's Dubai International Film Festival (I hear Tom Cruise is in town this week for the premiere of the new Mission Impossible movie…I'll be on the lookout for him).
From Middle East Executive:
Although the inbound tourism market in the United Arab Emirates still has great underexploited potential, the changes in the countries of origin and preferences of visitors along with the expanding supply in hotel rooms provide fresh challenges for hoteliers. In the words of one consultant, "It's time for the the entrepreneurs to come back into the game."
My impression is the same. It seems that other industries need to build up around oil and tourism to increase the growth and stability of this region. One interesting entrepreneurial idea I saw in an ad at the airport was a company helping other entrepreneurs set up shop here in the UAE (with visas and office space etc.) from $595 a month. Definitely something to do a cost-benefit analysis on before jumping in.
More from the Jebel Ali Free Zone website:
Dubai’s free zones offer an ever-growing list of advantages that has led many MNCs from around the world to move to Dubai; no taxation on profits or income and no foreign exchange controls or restrictions on capital movement.
A stable, freely convertible currency, a strategic location, bridging time zones between Europe and the Far East. An efficient and well-developed support services, telecommunications and sea and air links. A high quality, reasonably-priced office accommodation, excellent conference and exhibition facilities and a cosmopolitan lifestyle.
Interestingly, I have heard some other sides to the "unfettered growth" story here, the global economic downturn has been felt here too. Construction contracts in the UAE are down 55% this year over last according to a Bank of America Merrill Lynch report. One rumor is that the government here is keeping cranes up at abandoned construction sites so it looks like the development is continuing.
Regardless, for prospective students interested in an MBA, the U.S., and Minnesota in particular, is a great place to study. We have 20 Fortune 500 companies in town in industries of retail and consumer goods, health care, technology, real estate, marketing, commodities and resources, to name a few relevant to the Middle East market. Learning a different perspective on business--whether you're an American learning from international classmates, or vice versa--is invaluable in understanding global business practices and becoming a principled business leader.
For now I'm off to discover some of the history (at the old spice market) and the future (at the Burj Khalifa) of Dubai before heading to Abu Dhabi tomorrow!