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· Top three tourist spenders continue steady growth: US (15%), Saudi (29%) and UK (17%)
· F&B spends overtake room revenues
Dubai: Overall market spends in the UAE increased by 10% in the first three quarters of 2015, as compared to the same period last year, according to a new report on consumer spends by Network International, the leading payment solutions provider in the MENA region.
The report, based on credit and debit card transactions in the UAE, found that growth in tourist spends for 2015 vs. 2014 turned positive for the first time in the third quarter of this year, bolstered by an increase in spending by the top three overall spenders - United States (15%), Saudi Arabia (29%) and United Kingdom (17%).
In terms of nationalities, declines in overall Russian (-57%) and Chinese spending (-20%) was balanced by a 67% growth in Qatari and 38% growth in Nigerian spends across most sectors.
David Mountain, Chief Commercial Officer, Network International, commented: "Network International's consumer spending report provides a timely and accurate window into consumer spending behavior, offering UAE businesses useful guidance while formulating their marketing and sell strategies.
"The Q3 data indicates a major trend for local retailers - domestic and GCC spends, specifically Saudis and Qataris, have gained influence in the UAE markets displacing traditional top spenders such as the Chinese and Russians. Our analysis also provides the hospitality industry with insight on bolstering weakening RevPAR (Revenue Per Available Room) revenues as the F&B sector witnesses strong spends across all nationalities," added Mountain.
Hotels lead growth story
The hospitality sector registered strong year on year growth, an 8% increase in Q3 2015 as compared to Q3 2014. This growth, however, was not due to increase in RevPAR and average per purchase spends in Q3 2015 declined 6% vs. Q3 2014. Hotels continued to feel the impact of the decline in Russian tourists as spends decreased 48% in Q3 2015 vs. Q3 2014. However, this was balanced by a 90% growth in spends from Qataris and UK and Saudi spends growing at 23% and 25% respectively in Q3 2015 vs. Q3 2014.
Luxury takes a fall
The luxury sector, comprising jewellery and expensive watches, took a plunge in 2015 due to their significant reliance on Chinese and Russians, who used to account for more than 25 per cent of the overall tourist spend last year. A comparison of Q3 2015 vs Q3 2014 spends data reveals that the US and Chinese declined spends by 23% and 57% respectively. Among the top 10 spenders - British (9%), Saudis (19%) and Qataris (74%) stemmed the tide with a healthy positive growth in Q3 2015 vs. Q3 2014. Overall, the sector is witnessing 7% average decline in 2015 vs 2014 and 1% decline in Q3 2015 vs Q3 2014. With the Chinese economy still not showing signs of economic recovery, and with low oil prices and sanctions on Russian economy, growth in the sector can be expected to remain sluggish in the near term.
Fashion sees change
A lot has been happening in the clothing/fashion sector. The sector turned positive (4% growth) for the first time in Q3 2015. While domestic spends grew moderately by 5% year on year, most of the overall growth was contributed by Saudis (33%), Qataris (68%) and Nigerians (87%) in Q3 2015. Russians (-74%) were replaced by Saudis as the one of the top tourist spenders. Egyptians and Kazakhstanis are among the other top 10 tourist spenders in this sector. As in the hospitality sector, Qatar once again fortified spends with a 68% hike in Q3 2015 vs Q3 2014.
Gains in F&B sector
One of the major sectors which witnessed a staggering growth was F&B (30% (in absolute numbers) year-on-year. Growth in this sector was distributed with almost all nationalities performing well, with the top five being Saudi Arabia, UK, US, Kuwait and Qatar. 78% growth in Saudis spending in F&B sector have moved them to the top spender group, followed closely by Qatar (133% growth in spends) and 30% growth in domestic spends in Q3 2015 vs Q3 2014. F&B's success has prompted all major hotels to focus on this rapidly evolving sector especially at a time when RevPAR is much lower than past.
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Editor's Notes:
Data includes spends between January and September 2015 benchmarked against January to September 2014.
- The data is not comprehensive or full retail sales data - it does not include cash transactions, nor does it cover 100% of card transactions in the UAE
· The data measures the nominal value of transactions processed by Network International and is not adjusted for inflation
· A rise in the value of transactions may not be entirely due to increased real demand
· The geographic breakdown is based on the country in which the card was issued, which may not reflect the nationality or permanent residence of the spender
· This data is a useful, timely indicator of spending trends in the UAE. Network International processes more than 50 per cent of all transactions across UAE.
About Network International:
Established in 1994, Network International LLC is the largest acquirer in the UAE, and a leading payment solutions provider in the Middle East and North Africa (MENA) region. The company's service offering comprises a comprehensive range of payment products and services for both the Issuing and Acquiring segments of banks, financial institutions and retail merchants. This includes credit, debit and prepaid card processing, ATM management and monitoring, merchant acquiring and processing, fraud management, ecommerce services and mobile solutions for the payments industry. In addition, the company offers several value-add products including data analytics, scoring and loyalty solutions with the objective of enabling speedy, secure, convenient and efficient payment transactions for customers. Network International has Operation centers in the UAE, Egypt and India, with its corporate office in Dubai. The company continues to invest in strategic partnerships that will increasingly see its influence spread across the region.
Network International is a Principal Member of Visa International and MasterCard International in the UAE and enjoys extension of its MasterCard License in other key countries. It is also a member of JCB and Union Pay card schemes, and it owns and manages the Diners Club Franchise in the UAE, Egypt, Lebanon and Jordan. In 2013, the company launched a GCC based domestic scheme, Mercury, and partnered with Discover Financial Services (DFS) to allow global acceptance of Mercury cards on the Discover, Diners Club International and PULSE networks. Network International, a Payment Card Industry Data Security Standard (PCI DSS) certified company, is also a major player in the international remittance industry and owns a majority stake in TimesofMoney Ltd., a leading global online remittance and digital payments company facilitating cross-border remittances and domestic payments in emerging economies.
For further information on Network International, please contact:
Hiba Moussa
ASDA'A Burson-Marsteller
Dubai, UAE
Tel: 971-4-4507600 Fax: 971-4-4358040
Email: hiba.moussa@bm.com
© Press Release 2015
