Dubai: UAE’s luxury retailers are feeling the pinch after a drastic reduction in big-spending Chinese tourists hitting their stores.
“Chinese shoppers make up 40 per cent of the global market for luxury goods, both bought within their country and during their travel outside,” said a senior official with one of Dubai’s leading luxury groups. “Even if only 5 per cent of that spending happens at UAE stores, that’s still a significant amount.
“The virus outbreak and restrictions on travel is hurting sales to Chinese buyers in the last couple of weeks. It’s not going to be easy making up for that lost sales.”
The local retail sector was expecting a surge in tourist arrivals from the Mainland to make the Chinese New Year, which was marked on January 25. While no official data is out about this month’s intake, industry sources say tour cancellations have been heavy.
Retail sector sources estimate the drop as being in the range of 40-50 per cent compared to the same time last year. To put this in context, data from Department of Tourism and Commerce Marketing from the first quarter of 2019 show that 291,662 Chinese visitors came to the city. This was attributed to Dubai’s “China Readiness” strategy.
Dubai’s fabled Gold Souq too has seen little of Chinese buying activity during the month. “Thankfully, buying by Indian tourists helped to make up for the Chinese drop,” said a jewellery retailer.
Sources in the city’s hotel sector were also echoing retailers’ views. During their New Year, the Chinese tend to travel in sizeable groups. So, when the cancellations come, they are not confined to a few. “After a good third quarter, it was vital that hotels in Dubai managed a solid January performance,” said a hotel operator. “Now, with the virus, the performance will come in as less than healthy.”
Tour operators in distress
AFC Holidays on Tuesday had cancelled its holiday packages to China, South Korea and Japan following the news of the Coronavirus spread.
Premjit Bangara, General Manager at Sharaf Travels, said four of his clients have asked for a re-route. “They were travelling from Dubai to Vancouver via Hong Kong. They asked for their tickets to be re-routed via an European destination.
“For us as a company, China is not a busy destination at this time. But yes, whatever little interest we used to see for the sector is now practically gone.” (But UAE based airlines continue to operate flights to Chinese cities; at this moment in time, they said there are no cuts to schedules.)
Hard done by
According to Naseer Khan, Travel Manager at Kanoo Travels, flight reservations to Beijing, Shanghai and Guanzahou are at a standstill. The Chinese sector contributes 5 per cent of the company’s tourism revenues.
“This has been impacted following the news of the Coronavirus - and this translates to a loss of revenue. Each month we do 200 to 300 flight bookings and hotel reservations to China from UAE. They are mostly business travellers. Now that is not happening.”
Khan also said the whole of January had been about receiving several updates from their clients and airlines regarding travel advisories to China and Hong Kong.
“Following the outbreak, we started receiving updates from airlines,” he added. “A lot of our clients are business travellers and they started sharing their travel advisories which they received from their security teams. We have been seeing a decline as a result of bookings to China and Hong Kong.
“Then the news from airlines came about screening travellers to and from China. We are keeping our customers updated. Traffic to China from UAE has practically come to a standstill. There has been no new travel request.”