More well-off residents in the UAE than in other countries in Asia are likely to spend more on non-essentials including travel in the next 12 months, a new research suggests.
Visa’s Affluent Index 2014, which measures people’s willingness to spend, showed that the UAE’s affluent index score increased from 125 to 130, higher than Hong Kong, which earned a score of 122, and Singapore (118). A higher score means consumers are likely to spend more out of their pockets in the next year.
‘’A score of above 100 means that the respondents included in the survey will increase their spend. With the UAE’s index increasing, the outlook is positive. It’s better than Singapore and Hong Kong,’’ said Marcello Barricordi, general manager for UAE at Visa. Barricordi was speaking at a seminar on the first day of the Arabian Travel Market.
The monthly spending of affluent households in the country is also seen to increase. The majority, about 75 per cent, set aside funds towards discretionary spend, or about Dh6,000 per month. ‘’The affluent spend over 60 per cent of their income per month and this is expected to be growing,’’ said Barricordi.
Family travel
Visa earlier revealed that 50 per cent of the affluent in the country will spend more on family travel over the next 12 months. Visa’s affluent study included more than 300 credit cardholders in the UAE. Over 130 respondents earned between Dh200,000 and Dh300,000 per year and another 170 earned at least Dh300,000 per annum.
Visa’s research also showed that UAE residents are opening their wallets more while they are outside the country. UAE cardholders’ overseas spending reached $2.88 billion in 2013, up 20 per cent from a year ago. Among the top 10 destinations where UAE travellers spend the most, United Kingdom topped the list, followed by the United States, Germany, France and Thailand.
Italy, which is among the top 10 favourite destinations of UAE residents, emerged as the fastest growing corridor, which registered a 36 per cent growth in UAE travellers’ outbound spend.
Looking at the spending patterns of people visiting the UAE, Visa’s research showed that people from the UK, Saudi Arabia and Russia are the top three big spenders. Russians, however, shell out the most money in every transaction, spending $337 on average. People from Qatar spend $327 on average, while those from Kuwait spend $291.
Hotels and shopping outlets in the country take the lion share of the visitor spending, with accommodation accounting for nearly a quarter (24 per cent) of total inbound spend and fashion and retail outlets accounting for 14 per cent. Duty free spending accounts for 7 per cent of inbound spend, while restaurants represent 3 per cent.
