By Staff writer
New report says spending by Russians almost halves after devaluation of rouble while Chinese visitors also cut spending
Domestic consumer spending in the UAE increased by 13 percent last year compared to the previous year, according to a report by Network International, the payment solutions provider.
The report also showed that overall card spending in the UAE grew by 9 percent over 2014, despite Russian spending almost having during the past year due to the devaluation of the rouble.
The report, based on credit and debit card transactions in the UAE, found that spending by UAE-issued cards has remained by far the largest in value over the past two years and has remained steady between AED9-10 billion per month.
David Mountain, chief commercial officer, Network International, said: "The UAE economy, driven by diversification into non-oil revenues, has borne resilience to current market dynamics, as indicated by our analysis of card-spending data over the past year. Our analysis indicates some strong trends that can be leveraged by retailers and merchants in the UAE to bolster marketing strategies."
The report indicated that domestic spenders were the highest spending group in the UAE last year with the United States, Saudi Arabia, Qatar and Kuwait also making it to the top spenders list.
GCC spending increased by 15 percent last year while North American spending showed a 12 percent growth. Among the top seven tourist spenders, Qatar displaced Russia to take the fourth spot overall in the UAE.
The report said the appreciation of the dollar - and thus the dirham - had a negative effect on tourist spending from non-pegged currencies, with repercussions especially dominant in Asian and European spending.
US spending however, being independent of the exchange rate fluctuations, grew but the average per purchase spend of US cardholders decreased in all sectors except travel and duty free, the report added.
The steep decline in oil prices along with the devaluation of the Russian rouble saw Russian spending drop to nearly half as much when compared to 2014. Chinese card spends also declined by 13 percent in 2015 as compared to 2014.
UAE residents showed the highest increase in spending in the F&B and hotel sectors, spending 23 percent more in restaurants in 2015. Other GCC countries also contributed heavily to this industry with Qataris leading the way with a 50 percent increase followed by a 48 percent rise by Saudis.
Overall, hotels witnessed a 4 percent growth in spends in 2015 vs 2014, the report said, adding that spending in supermarkets grew by nine percent compared to 2014. However, there was a 4 percent decline in per purchase spend of the sector from AED212 to AED203.
What an inconsequential report, what does this have to anything on how the GCC region is currently struggling?? Credit cards and the likes have always been one of the reasons adding to the mess leading to a recession in high-consumer driven economies.
Talk about the debt management and the kind of pressure it will put on the UAE economy when ppl start leaving around the coming summer, now that would be news analysis...
100% correct Arsal...As far as all the Bank reports and surveys posted on this site are concerned...it is UNAFFORDABLE debt...not a sign of affluence! Its about time these 'rah-rah' people got a real handle on the economy...not just of Dubai but globally.
People living off credit shows just how difficult the economy really is and that is where the news, as you suggest, really lies. Nothing is increasing but debt levels. How this debt is to be serviced is the real talking point/news story...