By Staff writer
Payments provider Network International says GCC consumers have filled gap left by Chinese and Russian shoppers
Spending in the UAE increased by 10 percent in the first three quarters of 2015, compared to the same period last year, according to a new report on consumer spends by Network International, the payment solutions provider.
The report, based on credit and debit card transactions in the UAE, found that growth in tourist spending turned positive for the first time in the third quarter of this year, bolstered by an increase in spending by Americans, Saudis and Brits.
In terms of nationalities, declines in overall Russian (-57 percent) and Chinese spending (-20 percent) was balanced by a 67 percent growth in Qatari and 38 percent growth in Nigerian spending across most sectors, the report said.
David Mountain, chief commercial officer, Network International, said: “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.”
The report showed that the UAE's hospitality sector registered strong year on year growth, with an 8 percent increase in Q3 compared to Q3 2014.
It added that this growth was not due to an increase in RevPAR and average per purchase spends in Q3 declined 6 percent compared to the year earlier period. Hotels continued to feel the impact of the decline in Russian tourists as spending decreased 48 percent in Q3 but this was balanced by a 90 percent growth in spendin from Qataris while spending by Brits and Saudis rose by 23 percent and 25 percent respectively.
The report said 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 percent of the overall tourist spend last year.
A comparison of Q3 vs Q3 2014 spending data reveals that the Chinese reduced spending by 57 percent. 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, the report added.
The clothing/fashion sector turned positive (4 percent growth) in Q3 with most of the overall growth contributed by Saudis, Qataris and Nigerians as Russianswere replaced by Saudis as the one of the top tourist spenders.