What oil crash...? Gulf tourists spend more on London shopping sprees
Tax-free splurges by UAE visitors have almost doubled in some luxury UK retail districts
Oil prices have plummeted and Arabian Gulf states face massive budget deficits – but you’d never think it when walking down Piccadilly or browsing the boutiques of Mayfair.
Gulf visitors to London seem tranquil despite the economic jitters back home, and are spending up to twice as much in some luxury shopping areas compared to a year ago, new data shows.
Cash tills are ringing in the so-called London Luxury Quarter – which covers the areas of Mayfair, Piccadilly and St James’s – which saw a rise in big-ticket purchases by Gulf visitors in the year to January.
Global Blue, which operates one of the world’s biggest tax-free shopping networks, tracks transactions and bulk information like the home countries and receipt amounts of purchasers whom have requested tax refunds.
Its data shows that visitors from the UAE, Kuwait and Qatar are among the top-five biggest tax-free spenders in the London
Luxury Quarter, even in the wake of the oil-price slump. Shoppers from the UAE spent an average of £1,783 per transaction in January – a 94 percent year-on-year increase.
Figures for the UK as a whole show that tax-free spending by shoppers from Qatar rose by 35 percent in the year to February, with an average spend per transaction of £1,346. Visitors from the UAE and Kuwait also shopped more – although those from Saudi Arabia spent 28 percent less compared to last year.
So why are Gulf visitors to London continuing to shop ‘til they drop?
Currency moves – with the rise of the dollar against UK sterling meaning that Gulf shoppers get more for their money – is one key factor, said Kim Urbaniak, Marketing Manager at Global Blue UK.
“The weak pound has allowed for an increased spending power of shoppers in London,” she told Al Arabiya English.
“Gulf tourists have been key spenders within hospitality and shopping for many years in London,” Urbaniak added. “[Middle Eastern shoppers] have gained further prestige as… Russian spenders continue to decline, and have now fallen out of the top 10.”
Knightsbridge – home to the luxury department store Harrods – and the boutiques of nearby Sloane Street are key shopping areas for Middle Eastern visitors, Urbaniak said.
“On Sloane Street more than 31 percent of the total tax-free spend comes from Middle Eastern countries,” she said. Visitors to the street from the UAE are spending about 40 percent more than a year ago, while those from Saudi Arabia spend the most overall.
While London is popular among Gulf travelers, retail spending is up across Europe as a whole, Global Blue data shows. Middle Eastern visitors spent 17 percent more on tax-free shopping trips to the continent in the year to January, Urbaniak said.
“Middle Eastern outbound traveler numbers are increasing, driven by the desire to travel and shop abroad,” she added.
London top destination
But the UK capital remains a hotspot, with visitors from the Gulf traditionally flocking to London in the summer months for the so-called ‘Ramadan rush’. Several retailers have invested in cultural training and employed Arabic-speaking staff to deal with the boom in business.
London ranks as the fourth most Muslim-friendly shopping destination globally, after Dubai, Kuala Lumpur and Singapore, according to the MasterCard-CrescentRating Muslim Shopping Travel Index published in September. The report also found that Muslim travelers spent a staggering $62 billion on shopping and dining in 2014.
Another MasterCard-CrescentRating report, published earlier this month, found that the UK overall is the third most Muslim-friendly travel destination among non-OIC (Organization of Islamic Cooperation) countries.
Fazal Bahardeen, the chief executive of CrescentRating – an authority on halal-friendly travel – said London is popular with both visitors from the Gulf and Southeast Asian countries like Indonesia and Malaysia.
“Their first port of call in London is to go and shop,” he told Al Arabiya English.
Bahardeen said travel expenditure by visitors from Saudi Arabia and the UAE was on the rise despite the macroeconomic worries over low oil prices.
“The UAE and Saudi market is still growing,” Bahardeen said. He said that, if the oil price crash was going to have an impact on travelers from the Gulf, it would probably not kick in until the second half of this year. “I don’t think it is… reflected very much at the consumer level,” he added.
Shopping … for property
Aside from Gulf visitors splashing the cash at Dior and Dolce and Gabbana on Sloane Street, London is also popular destination for shoppers of a very different kind: property investors.
A Cluttons and YouGov survey published this month found that the UK capital is the top global destination for real estate investment among high net worth individuals (HNWI) from the Gulf.
Steven Morgan, a Cluttons partner, said in a statement that low oil prices had actually spurred interest in property.
“When considering the drastic fall in oil prices… it makes sense that there is a strong appetite for international real estate. Investors want to put their capital into alternative assets and with stock market volatility, bricks and mortar seems like a safer alternative,” he said in a statement.
“There is also the added advantage of Middle Eastern currencies being pegged to the U.S. dollar, making London property assets more affordable considering the recent weakening of sterling and euros against the greenback.”
Bahardeen said he had not seen any impact on Gulf visitors wanting to visit Europe in the wake of the terror attacks on the continent, most recently in Brussels.
But previous, non-terror related incidents in the UK have hit travelers’ perceptions of safety in the UK capital.
In early 2014 there were two violent assaults on Emirati families staying in London, including on three UAE women who were assaulted with a hammer in their hotel apartment at the Cumberland Hotel in central London.
A subsequent poll by YouGov and Al Arabiya English found that more than half of UAE nationals felt the UK to be an unsafe destination in the wake of the two vicious attacks.
Bahardeen said maintaining security is important if the UK is to keep attracting visitors – and shoppers – from across the world.
“The UK has a huge potential to keep increasing its market share of Muslim travelers,” he added.
London council to crackdown on Gulf luxury carsThe council of the Royal Borough of Kensington and Chelsea has started a crackdown on tourists Travel and Tourism
‘Friends of Syria’ to meet in UK next weekWestern and Gulf nations opposed to Syrian President Bashar al-Assad will hold their latest meeting in London on May 15 Middle East
Saudis banned from Harrods? Pakistan paper falls for itEstablished Pakistan newspaper quotes satirical website’s joke that Gulf nationals have been barred from Qatar-owned London store Print