Over the past 12 months, Hande Unveren has taken holidays to Japan, Nepal, Jordan, India, Sri Lanka and the Netherlands. She has also made trips back to her native Turkey, most recently for a two-week trip that included yachting with friends around the Aegean Islands.
The marketing and communications manager at the Park Hyatt Abu Dhabi Hotel reckons she spends half of her monthly salary on dining out and on foreign travel – a change from her former tendency to splurge on designer clothes and accessories.
The 42-year-old’s preference for luxury experiences over material goods reflects new spending habits in the Middle East, highlighted by the recent American Express Middle East (AEME) Spending Survey. According to the study, almost six in 10 of UAE residents now prefer to splash out on experiences compared to four in 10 who spend more on luxury goods. This contrasts to results from two years ago, which found the majority of respondents favoured spending their disposable income on tangible goods such as cars and high-end fashion.
“In the past I spent more on clothes and fancy things,” says Ms Unveren, who adds that she bought a Kia rather than an expensive car to help fund her travels. “Now I have enough. Now I want to do something for myself. I enjoy going out and having experiences. When I travel I experience different cultures and meet different people.”
Ms Unveren is not alone.
In the AEME study, almost half of those polled in the UAE identified holidays as their top luxury, followed by social events and fine dining. The main reasons for spending on high-end bespoke experiences is “to be entertained, relax and for personal well-being”, says the report.
“Over recent years, we’ve seen a major shift in the way people spend and make luxury purchases and investments as they increasingly prioritise buying luxury experiences, and the memories that go with them,” says Mazin Khoury, the chief executive of AEME.
This finding is confirmed by Alanoud Tahlawi, the co-founder and chief executive of Ember Lifestyle, a lifestyle management firm headquartered in Abu Dhabi.
The company has experienced a 57 per cent increase in general luxury travel bookings this year compared with 2013, forcing Ms Tahlawi to allocate more staff to this area to keep up with the requests. Bespoke trips recently organised for clients include a sculpture trip to Italy, a climbing holiday at Mount Kilimanjaro, sushi tasting in Japan and night photography in Paris.
“People in the region are increasingly looking at travel as an investment in their own joy, happiness and further advancement in knowledge,” Ms Tahlawi says.
As the managing director of Quintessentially Lifestyle Dubai, another concierge company, Caroline Hargreaves is also well placed to observe the changing habits of UAE spenders.
“The affluent sector has perhaps reached saturation point to a degree – how many handbags, shoes, watches does one person want?” she says. “Being able to experience something, especially if this is in a way others cannot, can be a once-in-a- lifetime [opportunity] worth spending on and spending more too. We have seen this shift in the last year pick up momentum.”
Ms Hargreaves points out that the explosion of social media may also be driving this trend, with UAE residents religiously documenting their leisure activities on their networks.
The British-Lebanese entrepreneur Fadi Malas is an avid traveller who loves the ease with which he can fly from Dubai. The 45-year-old former chief executive of the UAE-based chain Just Falafel is also a foodie and, at home or abroad, a top consideration for him is where to eat.
“Fine dining was revolutionised in the mid-1990s in London and Dubai has caught up in the past few years and now has many must-try restaurants,” he says. “Fine dining is definitely at the heart of this century’s lifestyle.”
Ms Hargreaves at Quintessentially notes that it’s not just individuals that are altering their spending patterns. Businesses are too.
“Interestingly even employers are changing incentive and reward schemes to reflect this, with large corporates putting holidays, sport and dining experiences together for their staff,” she says.
Sporting and social events in Abu Dhabi and Dubai – the cities’ art fairs and film festivals, the superstar pop concerts – has also made it easier for residents to spend their cash locally.
“Art Dubai and the Dubai International Film Festival are two of my favourite events, not only because of how they have grown in such a short time but also because they attract of lot of my friends from abroad,” adds Mr Malas, a father-of-four, who has lived in Dubai for nine years.
The AEME survey results were gathered via face-to-face interviews with almost 900 people earning at least US$64,000 per year across eight Middle East countries including Bahrain, Saudi Arabia, Kuwait, Lebanon, Qatar and the UAE.
While regionally all respondents said they capped spending on luxuries at $5,000 per month, 7 per cent of UAE residents admit to spending even more.
However, Ember’s Ms Tahlawi says the majority of her clients “far” exceed that figure.
“In experience travel alone, we have clients spending in excess of $500,000 per year,” she says. “We also have clients who regularly spend over $10,000 a month on luxury products.”
When people do choose to spend on products, they favour designer clothes and accessories, electronics and cars.
Despite the increase in luxury spending, care is taken to save too, according to Ms Tahlawi. Ember provides wealth management services and the company founder says there has been a 20 per cent increase in demand for these services over the past year.
“We have helped many members and clients in sourcing investment opportunities in real estate and land across Europe, the USA, the UAE and Turkey,” she says. “People are saving and investing but this is not affecting their overall spend on luxury services and products.”
Mr Malas agrees that it’s important to put money away as well as to spend, especially for those, like himself, with a large family to support.
“It’s a great habit to get into,” he adds. “I prefer to invest the better part of my savings into real estate primarily and in start-up ventures.”
business@thenational.ae
Follow us on Twitter @TheNationalPF