Dubai malls cash in on a surge of GCC visitors

GCC tourists keep the tills ringing in July, but August is expected to be slow

Dubai malls are generating bumper July sales as visitors pour into the emirate from the region to shop ahead of Ramadan.

Dubai malls are generating bumper July sales as visitors pour into the emirate from the region to shop ahead of Ramadan.

Political stability, cheaper rooms and the earlier timing of Ramadan this year has helped persuade Gulf residents to visit Dubai and spend in the emirate's many malls.

"There's undoubtedly been an increase in GCC nationals hitting Dubai this summer," said Bruce Bowman, the head of operations at Marks & Spencer [M&S] in the Middle East and North Africa region.

"For those that want to stay in an Arabic culture, there are now less options to visit," he said, referring to the unrest in some Arab countries.

Retailers and hoteliers say the increase in business has been so pronounced they are now worried about a possible steep downturn in sales and occupancy rates next month as GCC nationals return to their home countries for the start of the holy month.

"People's travel plans have changed this year. They have to be back home for the start of August," Mr Bowman said. "We're seeing a big bounce but we are cautious about August."

This month, Dubai's General Directorate of Residency and Foreigners Affairs said the emirate recorded a 79 per cent increase in visitors from other GCC countries from June 15 to July 2, compared with the same period a year ago.

Malls and retailers are reporting large sales increases on the back of the influx of GCC tourists, with only a small part of the trend being attributed to the Dubai Summer Surprises festival.

Harman House, an audio and visual entertainment specialist, said sales had doubled in the summer months so far compared with the same period last year.

Jacky's Electronics said it had seen a "huge impact" on sales from GCC nationals visiting the country and buying products such as iPads, smartphones and laptops.

"Dubai's becoming more of a family destination, and there are a lot of interests for children, so credit to the Government," said Ashish Panjabi, the chief operating officer for Jacky's.

M&S, which Al-Futtaim runs in the UAE, recently launched a store in Mall of the Emirates, and sales have grown at a higher rate than expected amid a steady flow of tourists and with no harm to other M&S stores in the city.

"We do regular surveys to understand who makes up our customer base," Mr Bowman said. "It's the accessibility of Dubai in terms of political stability, a range of hotels and the date Ramadan falls."

Hotel occupancy has increased so far this year in Dubai as unrest in other parts of the region has meant many tourists have avoided troubled destinations and opted for the city instead.

A wider range of less-expensive hotels has also helped increase Dubai's attraction as a holiday destination.

"There's more disposable income for [GCC tourists] to spend with options on value-based hotels," said Ishwar Chugani, the executive director for Giordano Middle East, which has 119 fashion stores across the region.

Occupancy in Dubai's hotels increased 0.7 per cent to 69.9 per cent in May compared with the previous month, despite an increase in the number of hotel rooms, according to Deloitte.

Hotels are also banking on strong GCC visitor occupancy this month as some European tourists have been discouraged from visiting the Middle East because of regional unrest.