Dubai records 2% annual increase in tourists, boosted by Russia and China

Dubai received 4.7 million international overnight visitors in the first quarter of 2018 – a 2 per cent rise from the same period last year despite visitors from primary markets declining, according to new figures from the Department of Tourism and Commerce Marketing (Dubai Tourism).

The first quarter "yielded stable performance supporting strong growth for all adjacent sectors including hotels and airlines," said Helal Al Marri, director general of Dubai Tourism. "We expect to build on this strong base to accelerate momentum through the summer and beyond, on the back of our strategic investments, partnerships, and policies geared to drive strong growth in 2018."

The increase in visitors in the face of “growing currency pressures”, Dubai Tourism said, was despite a decline in visitors from two of the three biggest source markets – India, Saudi Arabia and the UK.

While India, which contributed the most tourists, saw 7 per cent year-on-year growth between January and March to 617,000 visitors, Saudi Arabia registered a 1 per cent decline and the UK saw a steeper decline of 8 per cent over the period.

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Still, emerging markets including China and Russia grew, boosting tourist arrival numbers, Dubai Tourism said in a statement on Wednesday.

Visitors from Russia surged 106 per cent year-on-year to 259,000 tourists placing the country in fourth place. China, the most populous country in the world, came in fifth place with the number of visitors rising 12 per cent to 258,000. Tourists from both countries benefited from the UAE’s introduction of visa-on-arrival in the last two years, Dubai Tourism said.

Europe was the fastest growing region, with most countries posting double-digit annual increases in visitors over the period. France was up 17 per cent accounting for 103,000, while Italy saw 20 per cent growth with 80,000.

Sweden entered the list of Dubai’s top 20 source markets for the first time, delivering 42,000 visitors. Western Europe overall delivered the highest proportion of tourists to Dubai, accounting for 23 per cent of the total, ahead of the GCC and South Asia with a 17 per cent share each.

Russia, the CIS and wider Eastern Europe region delivered 10 per cent of total visitation – a 50 per cent rise on the same period the previous year.

Meanwhile, travellers from eighth-placed US increased by a moderate 2 per cent, while declines were witnessed by ninth-placed Iran and 10th-placed Pakistan at 19 and 22 per cent respectively.

Dubai Tourism said the emirate is on track to achieve its target of 20 million visitors by 2020. Dubai recorded 15.8 million overnight visitors in 2017, a 6.2 per cent increase from 2016.

Dubai hotels recorded steady growth in the first quarter of 2018 with an 87 per cent average occupancy rate.

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Key changes

Commission caps

For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:

• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).

• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).

• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.

• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.

• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.

Disclosure

Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.

“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”

Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.

Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.

“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.

Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.