Tourism plays a significant role in the economic diversification of the oil-rich Gulf Co-operation Council countries, which recorded almost $130bn in construction projects in 2014. Each country has performed impressively in the tourism space, but, as the host of Expo 2020, the spotlight is on Dubai.

Already, the emirate is ranks among the world's five most popular cities for travellers. It sees some 12 million visitors per year, which account for almost 70% of the United Arab Emirate's tourism market and make it the leading destination in the Middle East and north Africa. The world’s busiest airport, Dubai International Airport, and one of its most successful airlines, Emirates, are also based here, and help contribute to the high occupancy rates of its 90,000, mainly luxurious, hotel rooms. 

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Unsatisfied with its existing success, Dubai's government has set the ambitious target of increasing hotel capacity to 160,000 beds and annual tourist numbers to 20 million by 2020. 

Over the six months that Expo 2020 will be taking place, an estimated 25 million visitors are expected in Dubai, 70% of which will be short-term visitors from abroad. Therefore, Dubai Tourism Authority is offering a wide range of incentives, specifically to middle- and low-range hotel operators, to enter the UAE market.

However, there are challenges to new entrants, not least the emirate's fluctuating land and real estate prices. Excitement about Expo 2020 led to a dramatic 30% to 50% increase in real estate prices, but by the end of 2014, prices had dipped again, leaving potential investors wary. Global events are also impacting the tourism market, including the decline of the euro and ruble in recent months. Another challenge is the falling price of oil. While it has diversified its economy to some extent, Dubai's investment climate is still heavily influenced by the sector. 

The crucial question regarding Dubai’s success is how private and public investors will react if things do not change in 2015.

Mazdak Rafaty is managing partner of Ludwar International Consultancy and small and medium-sized enterprise advisor to the joint Emirati-German Chamber of Commerce. Email: m.rafaty@lic-consulting.com