UAE rides crest of Chinese tourism boom

Big-spending Chinese visitors seen as lifeline to Gulf state’s ambitious tourism goals
UAE rides crest of Chinese tourism boom
A quarter of all guests at the flag-shaped Burj al-Arab hotel come from China.
By Elizabeth Broomhall
Wed 05 Oct 2011 07:41 AM

China’s fast-emerging middle class is providing a lifeline to the UAE’s tourism ambitions, as the Gulf country fights to meet its goal of attracting 15 million tourists by 2020.

The UAE is spending billions of dollars on visitor attractions and luxury hotels in a bid to diversity its petrodollar-driven economy, a blend that has proved appealing to China’s increasingly wealthy citizens.

“We take the Chinese market extremely seriously,” a spokesperson for the Abu Dhabi Tourism Authority said. The UAE capital hosted 1,256 Chinese travellers in August, a rise of 14 percent on the year-earlier period, the ADTA said.

In neighbouring Dubai, the trickle of Chinese visitors is rapidly becoming a flood, with more than 150,000 visiting the emirate in 2010. The figures showed a 41 percent rise on the previous year’s figures, the city’s Department of Tourism and Commerce Marketing said.

“The Chinese market poses a new untapped opportunity for the UAE tourism sector,” said Basel Abu Alrub, managing director of UAE-based travel agency Utravel.

“The UAE attracts the Chinese by offering a metropolitan that has something to offer for all kinds of travellers. It also acts as a hub connecting China to Western Europe.”

Among the main attractions for Chinese tourists are tax-free luxury goods, branded hotels and the wide array of traditional Chinese cuisine, he said.

A large share of China's tourist spending is already flowing beyond its borders, with many luxury retailers counting Chinese among their biggest spenders.

By 2015, China expects 100 million people to venture abroad, making the Asian country the world's biggest outbound tourism market.

This influx of budget and luxury Chinese travellers means a mix of tour operators, iconic hotel chains, airlines and retailers are all in a position to profit, Alrub said.

UAE brands have not been slow to capitalise on the China boom. Abu Dhabi flag carrier Etihad said in December it would bolster its existing flights from Beijing with four, non-stop services a week from Chengdu, China’s south-west economic hub.

In July, the state-backed airline said it would operate daily returns between the UAE capital and Shanghai from March 2012.

In Dubai Duty Free, the world’s largest airport retailer, Chinese travellers rank among those from Russia and Europe as the company’s biggest spenders.

Chinese cigarette brands represent 14 percent of DDF’s entire tobacco sales, with top-selling label Chungwa alone accounting for one tenth.

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The brand, DDF’s bestselling item, brought in revenues of AED15.9m in the first half of 2011, and is expected to sell in excess of 200,000 units by the year-end.

“I think China is very important. Chinese are now doing what the Russians did in Dubai ten or 12 years ago, the number of Chinese travellers is definitely increasing,” said Colm McLoughlin, executive vice chairman, DDF.  “They are very brand-orientated and opt for the luxury end of the product range. We have had an increase in sales on luxury watches as the majority of the luxury watches are now purchased by Chinese travellers.”

DDF has moved to increase its number of Chinese-speaking staff and plans to ramp up its Chinese-language signage, he said.

Dubai’s Jumeirah Group has identified Chinese travellers as the fastest growing group of guests in its hotels.

“The number of Chinese guests staying in Jumeirah Hotels and Resorts in Dubai has risen steadily, and they are now on the list of our top nationalities,” said a spokesperson.

Jumeirah, which opened its first property in China in March of this year, said a quarter of all guests at its flag-shaped Burj al-Arab hotel come from China.

But analysts say significant growth remains in the industry, with the UAE still failing to attract the number of Chinese tourists seen in India and Europe.

“Tourism from China is growing fast, but is not yet sufficient in absolute terms to drive growth in the industry in the event of a downturn in arrivals from elsewhere,” said Liz Martins, a senior economist for the MENA region at HSBC.

“The number of Chinese tourists in 2010 accounted for less than two percent of all arrivals… still a very small proportion overall compared with visitors from Europe and the rest of the Middle East.”

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