UAE tourism spending growth forecast to remain low amid changing traveller habits - Gulf Business
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UAE tourism spending growth forecast to remain low amid changing traveller habits

UAE tourism spending growth forecast to remain low amid changing traveller habits

The emirates has seen a slight rebound in traveller spending this year but is unlikely to return to pre-2013 levels, according to Mastercard

Tourist spending in the UAE is unlikely to return to the same growth rates seen prior to the recent oil price slump amid changes in traveller spending habits, according to US financial technology firm Mastercard.

Data from the company’s Destination Insights division showed that UAE international visitor spending increased at a compound annual growth rate (CAGR) of 0.6 per cent in the 2013-2017 period amid mixed performance from different source markets.

While, UAE spending growth from Indian travellers expanded at a CAGR of 15 per cent, with similar increases from Sweden and Hong Kong, there was a noticeable reduction in spending from Russians at just under 10 per cent.

Declines were also seen in American, Australian and German tourist spending, according to Mastercard.

Sarah Quinlan, senior vice president of market insights, said international traveller spending growth had “rebounded a bit” this year in the UAE after being impacted by factors including lay-offs in the oil and gas sector and the corruption crackdown in Saudi Arabia – traditionally one of the emirates’ biggest source markets.

However, she said a broader global shift in traveller preferences from retail spending to experiences would require new strategies from tourist markets known as international shopping destinations like Dubai and Hong Kong.

Spending is “not coming back to the same level as before and I don’t expect it to come back,” she said.

“It will improve but again I think Dubai has to continue to evolve to make sure there is quite a lot to do beyond shopping because again this permanent trend away from buying goods all of the time.”

Mastercard data shows the UAE has been among the slowest growing markets for inbound international visitor spending in the Middle East and Africa so far in 2018, ahead of only Saudi Arabia and Qatar, which has seen spending decline.

Meanwhile, Egypt has rebounded strongly, up around 70 per cent so far this year, after recovering following declines in 2016.

Quinlan said in a presentation that wider data for Asia Pacific and Middle East and Africa combined showed how changing consumer habits were impacting spending.

This placed Australia, which received about 9 million visitors in the last year compared to 15.8 million in Dubai alone for 2017, just above the UAE for tourist spending due to a longer average stay and higher cost.

Read: Dubai sees tourist growth accelerate in 2017

Data for 2016 from Mastercard’s Destination Cities Index showed Dubai overnight visitor spending at the top of the world at $28.50bn and forecast to grow 10.2 per cent last year.

More broadly Quinlan emphasised that tourism authorities worldwide needed to make greater use of data to direct their strategies and target specific markets, noting how it is now possible to identify where and how different nationalities are spending their money.


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