A defining quality of Middle East consumers is whether it’s shopping for designer or luxury goods, partying on a grand scale or just going for a coffee, they choose to do it in style, and are willing to pay for a quality product or experience. The Middle East has a long urban tradition, and some of the world’s oldest cities, including Jerusalem, Bagdad, Cairo, Bagdad, Damascus and Istanbul, are located there. Its high level of expatriate workers, particularly in the UAE where they make up almost 90% of the inhabitants, international visitors and a young population, make it a diverse and vibrant region, and an exciting marketplace for retailers and service suppliers.
Destination Dubai for Chinese visitors
Dubai has become a magnet for the affluent Chinese shopper. According to a May report in The New York Times, quoting industry sources, 25% of luxury goods sold in Mall of the Emirates, a leisure, entertainment and shopping resort, are bought by Chinese tourists. Approximately 214,000 Chinese tourists visited Dubai last year, up from 25,000 ten years ago, according to property company Jones Lang LaSalle. The last year alone showed a 50% increase of Chinese visitors, and data from hoteliers indicates they are lengthening their average stay, up from three nights two years ago to four nights.
Luxury stores such as Dior are now hiring Chinese speakers to cater for this highly desirable customer base, more retailers are accepting Chinese credit cards, and malls have begun to decorate for Chinese Ne w Year. The chief executive of one of the divisions of the company that owns the mall told the NYT: “We do surveys frequently and keep finding, especially over the last year or two, that Chinese tourists are the highest spenders per hit at our luxury stores.” One Chinese shopper, on a return visit to Dubai, explained the attraction to the NYT: “In China, we have taxes on luxury brands, and sometimes fakes are so good they are sold in real shops, so here it can be cheaper, and we don’t worry about fakes.” Bedecked in a Missoni dress and Christian Louboutin pumps, while highlighting the quality of a Louis Vuitton bag to her sister, she added: “It’s worth the flight to come here and shop andcheaperthan going to Paris.”
Chart1: Sales of Luxury Goods in the UAE: 2005-2010
Source: Euromonitor International from trade sources and national statistics
Note: Market size based on retail value RSP
Dubai’s increasingly popularity amongst international visitors is confirmed by the 2012 MasterCard Worldwide Index of Global Destination Cities, released last month. Dubai moved up one to eighth position in the top 20 destination cities by international visitor numbers, and up one to 18th in terms of visitor spend, a year -on-year growth of 18.5%. The emirate was also ranked sixth fastest growing destination city. The Index covers 132 of the world’s most important cities, and the only other city in the region in the top 10 in 2012 is Istanbul.
Dubai also retained its top spot for destination cities in the Middle East and Africa (MENA) region, showing an increase of 15.3% in visitor numbers to 8.8 million, ahead of Cairo at the number two slot with 3.3 million visitors. Dubai’s tourist spend also leapt an impressive projected 18.5% to US$8.8 billion this year compared to 2011, the highest amongst MENA countries. The report predicted that the biggest spenders among visitors to Dubai would be Londoners, projected to splash out about US$1.2 billion, followed by visitors from Paris (US$297 million) and Munich (US$267 million).
Gay time in Tel Aviv
Tel Aviv, which celebrated its annual gay pride parade in June, was named the best gay city of 2011 by Lesbian, Gay, Bisexual, and Transgender travel website Gaycities.com. The website judged the LGBT lifestyle in Tel Aviv to be “perhaps the most vibrant in the Middle East,” based on survey responses, and said “rarely a month goes by that Tel Aviv isn’t celebrating some musical or cultural event,” including “huge dance parties” hosted by local, European and US DJs each weekend. Tel Aviv won the support of 43% of the website’s voters, followed by New York City (14%), Toronto (7%), Sao Paolo (6%), Madrid (5%), London (5%), New Orleans (4%) and Mexico City (4%).
Itai Pinkas, head of Tel Aviv’s municipal LGBT centre, told the Jerusalem Post in January: “Tel Aviv in recent years has gained the status as a place where it’s fun to be a gay tourist or a gay resident.” He added: “The number of people who visit keeps growing, and the word-of-mouth just increases.” Pinkas said Tel Aviv was an attractive destination for LGBT tourists because it combined the beach and urban cultural attractions, unlike other cities, which typically have just one or the other. He explained that gay tourists tend to spend more money than non-gay tourists and that the city and country had benefited greatly from this.
Ataste of home for expats
A madeleine biscuit dipped in tea did it for Proust but, as of last year, Canadian expats in the UAE are now able to enjoy a remembrance of things past while dunking their doughnuts in freshly ground coffee at Tim Hortons café bake shop. The Canadian chain, founded in 1964 and with more than 3,600 outlets worldwide, is something of a national institution. The first of 120 outlets planned for the Middle East opened in Dubai last September and, according to a report in the National, an English-language UAE publication, it has proved a roaring success with expats and locals alike. One satisfied Canadian customer told The National, soon after the Dubai opening: “The coffee tasted the same, the sour cream doughnut just as soft and the herb and garlic cream cheese on my bagel was just like I remembered it. But as much as I am happy, I wonder whether this will be one more thing that makes me so comfortable, I end up not going back at all?” Another customer piled on the praise: “Tim Hortons is a way of life in Canada,” and his wife, taking her first sip of coffee, closing her eyes and breaking into a broad smile enthused: “It tastes exactly the same.” Tim Hortons, according to the National, inspires more loyalty than other competitor coffee chains, and a series of TV ads in Canada features homesick natives longing for a Tim Hortons. Emiratis and others from the Middle East, particularly those who have lived in Canada, seem equally smitten. One Dubai-based Pakistani told the National: “I used to go five times a day,” adding: “All my memories of Toronto are based around Tim Hortons. It’s a very convenient place to meet friends.” His compatriot was also enthusiastic that he was able to order Halal food.
The MasterCard report indicated the outlook for MENA countries in general is bright, with visitor numbers for the top ten cities set to grow by 7.2%. Although the survey indicated Tel Aviv’s visitor number ranking was down on last year, the advent of conservative governments in neighbouring countries could make it a more attractive regional option for liberal visitors. In the longer term, the Chinese customer base for luxury products sees no sign of abating, and expat numbers are likely to hold steady in the face of an economic chill at home.