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LONDON: Moving Qantas’ stopover hub from Dubai back to Singapore next year will have limited impact on the emirate’s tourism sector, according to industry experts.
While Dubai pitches itself as the ideal stopover destination for travelers looking to break up long-haul journeys between Europe, Africa and Asia, the actual volume of passengers on Qantas flights that opt to spend a few days in the emirate mid-journey is fairly limited, said Will Horton, senior analyst for North Asia and Middle East, at Capa — Centre for Aviation.
“We’re talking about relatively small volumes in terms of capacity. Most of the passengers continued onwards to London and only some made a stopover in Dubai,” he said.
From March 2018, Qantas’ daily A380 London-Dubai-Sydney flight will be rerouted via Singapore. The switch back to the Australian airline’s original stopover hub was announced at the end of August when Dubai’s flagship airline Emirates and Qantas confirmed the extension of their partnership agreement originally signed in 2012.
Qantas previously announced in April that it would replace its existing London-Dubai-Melbourne service with a direct Dreamliner service flying from London-Perth-Melbourne.
The rerouting of the two major long-haul services away from Dubai will inevitably have some impact on the number of stopover tourists visiting the emirate, said Neil Hansford, aviation analyst and chairman at Strategic Aviation Solutions, based in Australia.
He said that the move could cause Dubai to suffer a net loss of 6,000 seats per week, with each seat representing a potential tourist to Dubai.
“On an annualized basis, it is 300,000 seats,” he said, estimating that around 10 percent of those travelers might stop over for a night in Dubai. This equates to around 30,000 people or about 15,000 rooms per year at a value of $1.5 million — plus additional spending on meals out, taxis and shopping, he said.
Yet, the potential loss of stopover tourists could be a lot worse, if Dubai had been more successful in winning over Qantas’ transit passenger traffic. Hansford said that some travelers actively avoided transiting over Dubai, opting to fly with Singapore Airlines between Australia and Europe instead.
“Dubai got the tourist model wrong and never really gave good reasons to break the journey,” he said. “Dubai was never seen as good value and too much designer label shopping appealing to a small percentage of the transit traffic.
“Dubai has never lived up to its potential due to quality of airport operations and handling compared to top airports like Singapore,” he added.
Statistics from Dubai’s tourism department suggest that Dubai had limited appeal among tourists from Australasia — Qantas’ home market — with the region only accounting for 2 percent of Dubai’s total number of overnight tourists (staying one night or more) during the first half of this year, a figure largely the same as the proportion recorded in 2016.
Other analysts are less pessimistic about Dubai’s appeal and see any loss of transit passengers flying on Qantas being easily offset by other airlines — mainly Emirates — taking Qantas’ slots at Dubai International Airport.
“Qantas’ slots will certainly be used and we could see Emirates look at ways to increase its presence in Australia,” said Horton. He said that the original partnership helped Emirates gain more momentum in Australia and New Zealand through various codeshares.
“That element remains even after Qantas exits Dubai, so Emirates still has high relevancy in Australia and New Zealand it can leverage for future growth,” he said.
A spokesperson from Qantas said that under the partnership customers can access over 2,000 routes on the combined networks of Qantas and Emirates.
Saj Ahmad, aviation analyst at Strategic Aero Research agreed that Dubai as a tourism hub will not suffer from the Qantas move, with increased flights from Emirates helping draw in more potential stopover tourists. “I don't think it will impact Dubai because Emirates is the biggest operator there and so with Qantas moving hubs, they’ll have more flights and routes. Qantas’ shift gives Emirates more key slots.”
“Emirates has enough traffic to flow and make up any loss via Qantas,” he said.
The outlook for Dubai’s tourism sector remains positive. A total of 8.06 million international overnight tourists arrived in Dubai during the first half of this year, a 10.6 percent increase over the same period last year, according to Dubai’s tourism department. The leading source market was India, followed by ��������Ƶ and the UK.
Dubai International Airport recorded one of its busiest months on record last month, with more than 8 million passengers passing through in August, according to Dubai Airports spokesperson Lorne Riley. The airport is on track to serve 89 million passengers in 2017, she said. The airport recorded 83.6 million passengers in 2016.
Demand for hotel rooms also remains high. Average occupancy across all hotel categories in Dubai stood at 76.1 percent in July year-to-date, according to data from STR, a data benchmarking company. This marks an increase of 1.5 percent increase on the same time period the year before.