Here's why UAE residents will spend more on travel
Airfares make for the lion’s share of the travel expenses
Dubai: UAE residents are spending at least 20 per cent more on their summer travel this year, compared to their 2022 budgets. Industry sources attribute the surge in spending to a 10 to 15 per cent rise in flight ticket prices in 2023.
Sapna Aidasani, Marketing Director at Pluto Travels, said that in 2022, the average travel budgets per person ranged from Dh3,500 to Dh4,000. However, currently, residents are not hesitating to spend Dh4,500 to Dh5,000. For travelers seeking immersive and luxury experiences, budgets have further increased to Dh18,000 per person from Dh15,000, surpassing even the pre-2019 levels.
Travellers are opting for more luxury options in land arrangements, including hotels and sightseeing. And this is contributing to the overall hike in travel costs. Visa Inc. on Wednesday (July 26) reported that payment volume climbed 9 per cent to $3.17 trillion in the fiscal third quarter ended June 30 due to consumers’ willingness to spend on travel and entertainment.
“The lion’s share of the travel expenses has gone up because of a steep hike in airfares (34 per cent compared to fares last year) to most popular travel destinations,” said Aidasani. While hotel daily room rates haven’t risen significantly, travellers now opt for five-star accommodations (compared to three-star and four-star properties), seeking more experiential and immersive travel experiences.
People are willing to allocate higher budgets for these options, moving beyond sightseeing. They want experiential and immersive experiences, even if it means higher travel budgets.
Higher airfares
The airline industry returned to profitability last year thanks to robust demand and travellers’ willingness to pay higher fares. And by the looks of it, trends are continuing to grow this year as well, contributing to the steep rise in travel expenses.
Moreover, even regular travellers are opting for Premium Economy or Business Class seats, said Raheesh Babu, COO of Musafir.com.
Many are choosing to elevate their travel experiences with Premium Economy flights and minimum 4-star accommodations
According to Airports Council International (ACI), UAE recorded a staggering 34 per cent increase in ticket prices between Q4-2019 and Q4-2022. Return Economy rates to Istanbul averaged Dh1,741 (on Pegasus Airlines and flydubai) compared to about Dh1,500 in 2019-2022.
Return airfares to Bangkok (on Emirates) are going for Dh3,965-Dh4,384, compared to the Dh2,154 summer fares since 2019. Those to London are at Dh3,019-Dh4,252 (on British Airways) compared to Dh1,779 in 2019. Business Class and Premium Economy airfares to these destinations averaged Dh7,415 (Tel Aviv) to Dh 19,095 (London) on various airlines.
Immersive experiences
The newly launched Ras Al Khaimah-based destination management company Safarak Travel and Tourism recently revealed a (luxury) travel expenditure breakdown of UAE residents. “The survey (shared with 500 UAE residents) revealed the average expenditure of respondents on various aspects of a 7-day holiday, per person,” said Cathy Mead, General Manager of Safarak Travel and Tourism.
The figures include Dh 11,202 for accommodation, Dh11,462 on flights, Dh 8,363 for transfers, Dh 8,504 for shopping, Dh 8,652 for entertainment/activities, Dh 8,205 for clothing, Dh 7,984 for insurance, Dh 8,109 for food and drink. Pre-2019 and 2022 figures were at least 20 per cent lesser.
“The average duration is 5-6 nights; however, some are extending their getaways to 10 days,” said Babu. He added, “This year, we have witnessed an exceptional rise in leisure packages booked, with over 15,000 packages sold, more than doubling our pre-2019 numbers.”
Alongside the demand for affordable luxury, UAE travellers are increasingly seeking adventure sports and cultural immersion, adding unique elements to their vacations, which raises costs.
Top holiday destinations
The top 5 preferred holiday destinations among respondents for the next 12 months include the Caribbean (26 per cent), France (25 per cent), Germany (20 per cent), China (17 per cent), and Greece (17 per cent). “Just under a fifth (19 per cent) of respondents indicated a preference for activity-focused holidays, such as skiing, hiking, or surfing,” said Cathy.
Instagram emerged as the preferred social media platform, with 61 per cent of respondents actively using it for travel-related content.