Tourist spending in UAE rises 5% in Q1 2015

Dubai, June 02, 2015: Overall tourist spending in the UAE rose by 5 per cent in the first quarter of the year compared to the same period in 2014 according to a new study by Network International, the leading payment solutions provider in the MENA region. The report, based on credit or debit card transactions by country in the first quarter of 2015, found that Americans accounted for the largest portion of total spending in the quarter with 21%. Tourists from Saudi Arabia came next (12%), followed by UK (9%), China (4%) and Kuwait (3.4%).

The Russian Rouble crisis has had a major impact on spending by Russian tourists which dropped by 52% in Q1, taking the country out of the top five spenders for the first time in recent history. Despite coming in the top five, Chinese spend is down by 7% on the same period last year. These drops were offset by significant growth in spending from the USA up 9%, KSA up 25% and Canada up 53% since last year.

Unsurprisingly, given distance travelled, Americans, Canadians and Australians spend the most of any nationality on airfare. However, once they arrive they spend the lowest average amounts on hotels and meals. The Chinese spend twice as much (average transaction value of AED 13,000) on watches and jewellery as the next tier down, comprising the Russians, Americans and Swiss. Anecdotally, recent tightening of anti-corruption legislation has been impacting Chinese Average Transaction Value (ATV) as they are less likely to buy multiple watches in a single transaction.

Commenting on the results of the research, David Mountain, Chief Commercial Officer, Network International, said: “Each of these spending behaviours provides useful insight on market segmentation and positioning to retailers in the UAE. However, when looked at through a geopolitical lens, movements in currency and the affluence of nations, the data presented can have profound effects on different markets.”

“Network International is the leading merchant acquirer in the UAE and processes well over half of all merchant transactions in this market. Accordingly, we are able to see trends and patterns in spending which are indicative of the overall market. This provides valuable data for not only merchants and businesses but also for the Government in assessing the continuing appeal of the UAE to international visitors.”

Fashionistas and F&B

The Russians and the Chinese are the biggest spenders on fashion with average transaction sizes three times those of traditional fashion capitals of France or Italy.  Three of the top four average ticket sizes in the restaurant business come from GCC states: KSA, Kuwait and Qatar, each of whom spend 60% more than an average person per meal (average ticket size of AED 180).

Seasonal trends 

The winter months witness the highest volume of tourist spends with travellers taking advantage of the sunshine and clear skies. GCC spending volumes come in at the top in the winter months, but they represent a proportion of spending in the low season. European and North American spends are the highest in winter, as compared to the rest of the year.

Network International processed more than 550 million transactions in 2014, amounting to AED 83 billion in acquiring volume. In anticipation of increased volume, the company last year rolled out a world-class platform ‘Network One’, which will eventually be capable of processing several thousand transactions a second.