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TOURISM FLOWS OUTBOUND IN THE UNITED ARAB EMIRATES Euromonitor International October 2013

TOURISM FLOWS OUTBOUND IN THE UNITED ARAB EMIRATES

Euromonitor International October 2013

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LIST OF CONTENTS AND TABLES

Headlines

1

Trends

1

Destinations

2

Business Vs Leisure

2

Prospects

3

Category Data

4

Table 1

Departures by Destination 2007-2012

4

Table 2

Departures by Mode of Transport 2007-2012

4

Table 3

Departures by Purpose of Visit 2007-2012

4

Table 4

Business Departures: MICE Penetration % Breakdown 2007-2012

5

Table 5

Leisure Departures by Type 2007-2012

5

Table 6

Outgoing Tourist Expenditure by Geography: Value 2007-2012

5

Table 7

Outgoing Tourist Expenditure by Category: Value 2007-2012

6

Table 8

Method of Payments for Outgoing Tourism Spending: % Breakdown

2007-2012

6

Table 9

Forecast Departures by Destination 2012-2017

6

Table 10

Forecast Departures by Mode of Transport 2012-2017

7

Table 11

Forecast Departures by Purpose of Visit 2012-2017

7

Table 12

Forecast Outgoing Tourist Expenditure by Geography: Value 2012-

2017

7

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TOURISM FLOWS OUTBOUND IN THE UNITED ARAB EMIRATES

HEADLINES

Number of trips increases by 9% and outgoing tourist expenditure rises by 2% to reach 5.3 million and AED28.7 billion in 2012

Leisure and business departures alike benefit from growing economic confidence in the country

Spend per trip decreases by 5% in current value terms in 2012 over the previous year

Number of trips expected to rise at a CAGR of 10% but just a 2% constant value CAGR expected for outgoing tourist expenditure expected for forecast period

TRENDS

Helped by stronger economic conditions, rising disposable incomes and further population growth outbound departures recorded a strong rise of 9% in volume in 2012. More low- to middle-income expatriate consumers for example increasingly embarked on trips back home, not least because of the widening offer of low-cost airlines such as Flydubai and Air Arabia. Business departures also picked up due to renewed investments in the country and closer international ties between companies. Finally, sea departures gained in importance towards the end of the review period as cruises have become a popular type of holiday in the United Arab Emirates.

The rise in departures in 2012 was therefore slightly faster than the review period CAGR of 8%. Nonetheless, growth rates during the review period were characterised by high volatility. Following on from high growth in 2008, tourism outbound flows collapsed in 2009 as a result of the economic crisis as many expatriates left the country whilst other consumers restrained their spending.

Due to the high number of expatriates in the country, nearly all residents in the United Arab Emirates engage in international travel. However, whilst lower-income consumers will save up their money for a trip back to their home country, consumers with higher income travel sometimes even several times a year, in order to visit friends or family back home but also to explore other countries.

Still, the higher percentage of lower-income consumers travelling towards the end of the review period resulted in growth in outgoing tourist expenditure to significantly lag behind the rise in the number of outbound departures. In addition, tour operators also offered more promotions in order to incentivise consumers in the United Arab Emirates to embark on more trips.

Air accounted for more than half of overall departures in 2012 and recorded considerable growth with a 9% rise in departures over the previous year. Growth in air departures was supported by ongoing expansion in route networks by various airlines, including Emirates and Etihad but also Flydubai and Air Arabia. Land travel posted the fastest growth, helped by a higher number of leisure land departures since more UAE residents embarked on trips to neighbouring countries.

Finally, sea departures also account for a significant (44%) share of outbound tourism and witnessed 9% growth in 2012. Dubai is not only an increasingly popular port for many cruises, but it also serves as a home port for leading cruise lines such as Costa Cruises, Aida Cruises,

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Royal Caribbean International, TUI Cruises and FTI Cruises. These companies became increasingly active in promoting their tours to UAE residents towards the end of the review period.

DESTINATIONS

Saudi Arabia not only accounted for 29% of overall departures in 2012, but also recorded the fastest growth with a rise of 15% in the number of trips over the previous year. This is due to the popularity of religious tourism to the country, particularly during the Hajj season of September and November, whilst many visit Mecca or Medina throughout the year. Departures to the country were also boosted by the construction of the Mafraq-Ghweifat motorway in 2012, with this linking Abu Dhabi to the Saudi Arabian border. The three-lane 327-kilometre motorway is lit and encouraged more consumers to travel by road between the United Arab Emirates and Saudi Arabia.

In addition, Saudi Arabia is a significant destination for business travellers, accounting for the majority of business departures from the United Arab Emirates. Strong growth in departures to the country was also supported by close economic links between the two countries and a rise in investments and business activities in 2012.

Departures to South Africa, Turkey, and Germany also saw above average growth in 2012, each witnessing double-digit increases over 2011. Stronger growth rates were partly due to expansion in flight capacity to these countries. However, trade links with South Africa and Germany boosted business departures to these countries, whilst Turkey benefited from ongoing investment from its tourist board in attracting Middle Eastern tourists. Marketing focusing on Turkey’s Islamic, historical and cultural heritage continued to prove popular amongst residents in the United Arab Emirates in 2012.

Egypt and Lebanon accounted for the highest share of outgoing tourist expenditure in 2012, with 15% and 10% of the total, respectively. This is mostly due to the fact that luxury travel is popular to these countries, with Egypt’s Sharm el Sheikh and Nile cruises, for example, proving popular attractions. Casinos and high-priced nightclubs in these countries also hold a strong appeal for many travellers from the United Arab Emirates.

Credit card is the dominant method of outgoing tourist expenditure, accounting for 52% share of the total and gaining a further percentage point in share in 2012 over the previous year. This came largely at the expense of prepaid cards, which lost a percentage point in share to account for 7% in 2012, with more lower-income consumers qualifying for credit rather than prepaid cards. Debit cards remained stable in second place with a 25% value share in the year. Cash accounted for just a 5% share towards the end of the review period, with the majority of travellers preferring card payment methods as these are perceived to be safer and more convenient.

BUSINESS VS LEISURE

Business and leisure departures progressed at the same rate in 2012 with an increase of 9% each over the previous year. Even though business departures took longer to recover from the economic crisis, both leisure and business departures benefited from improved economic conditions towards the end of the review period, as business activities picked up and consumers had more money to spend on international travel.

Leisure departures dominate, accounting for 84% of overall outbound trips and 82% of outgoing tourist expenditure in 2012. One reason is the country’s very high percentage of expatriates, standing at 88% in 2012. Many of them visit their home countries and families in

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the year. Moreover, high income levels amongst many Emirati households allow them to take holidays on a frequent basis.

Families account for the largest share of leisure departures from the United Arab Emirates, with a trip volume share of 24% in 2012. Whilst this group is largely accounted for by Emirati families, which typically travel together, middle- to high-income consumers also tend to take their families with them to the United Arab Emirates and return home for the summer to their home countries. However, group holidays is also popular with 15% of outbound departures as many Emirati residents like to rely on organised trips to visit other countries.

Whilst sea and land departures are significant within leisure departures, being a convenient way for families to travel, air departures dominate in business departures, accounting for a share of 94% in 2012. For most business travellers, time is precious and they are thus keen to travel by the swiftest manner possible. In addition, for most international business trips it is not feasible to drive.

MICE business travel is less important for outbound tourism than it is for inbound flows. Nonetheless, MICE departures comprised 38% of overall business departures in 2012, down only slightly from the previous year. Business travel towards the end of the review period was mostly boosted by company meetings rather than conferences and events.

PROSPECTS

Outbound tourism will be boosted by several factors over the review period. Further population growth will result in a higher consumer base, with a rise in expatriate residents in particular leading to more consumers wanting to explore the region from the United Arab Emirates as a base as well as taking trips back to their home countries. Rising disposable incomes will meanwhile enable both expatriate and Emirati residents to spend more on trips abroad.

The ongoing development of the country’s leading airports, chiefly Dubai and Abu Dhabi, as well as the route expansion of Emirates and Etihad will lead to an ever-increasing offer of flights for UAE consumers. The entry of new affordable airlines is also expected to drive growth, with 2012, for example, seeing the entry of low-cost carrier MMA Airline.

Whilst Dubai’s airport is seeing ongoing investments and improvements already, Al Maktoum International Airport in Dubai World Central is due to open at the end of 2013. This will result

in the Hungarian budget airline Wizzair commencing operations. The airport, which has been

handling cargo flights since June 2010, is expected to ultimately comprise five runways and to have capacity to move 160 million passengers per year.

Abu Dhabi International Airport meanwhile is expected to see the completion of the first phase of its Midfield Terminal Complex by the end of the review period, increasing the airport’s capacity from 12 million passengers per annum to 20 million.

Therefore, outbound tourism is predicted to see even stronger growth over the forecast period, with an expected rise in the number of trips at a CAGR of 10% in comparison to a review period CAGR of 8%. Growth during the review period was significantly hampered by

the poor economic conditions and the resulting exodus of many expatriate consumers. Thus,

a renewed economic downturn, even on a global basis, remains the largest threat to growth over the forecast period.

Amongst destinations, Turkey is expected to see the fastest growth during the forecast period, with an expected 14% CAGR in departure numbers during the forecast period, followed by South Africa and Saudi Arabia. Turkey is keen to boost Islamic tourism and is thus likely to continue to target the United Arab Emirates with attractive marketing campaigns emphasising its Islamic heritage. Consumers in turn will likely be attracted to Turkey by its low prices.

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CATEGORY DATA

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Table 1

Departures by Destination 2007-2012

 

'000 trips

 

2007

2008

2009

2010

2011

2012

Bahrain

18.1

17.5

16.6

17.0

16.7

17.1

Egypt

50.2

57.8

69.5

75.6

74.1

76.1

France

16.3

17.0

17.7

17.9

18.2

18.7

Germany

101.8

110.4

102.4

118.7

134.0

148.1

India

30.5

31.6

32.8

33.9

35.8

38.0

Iran

12.3

11.7

11.2

11.6

12.0

12.5

Jordan

15.6

16.1

16.7

16.9

17.2

17.5

Kuwait

18.3

17.7

17.1

17.6

17.8

18.2

Lebanon

250.9

253.0

295.6

323.2

342.6

365.8

Malaysia

60.0

70.6

73.5

82.2

87.7

93.9

Oman

232.7

320.7

302.3

312.3

326.7

345.7

Pakistan

22.8

22.7

22.8

22.9

23.1

23.8

Qatar

23.5

23.9

22.6

23.3

24.4

25.6

Saudi Arabia

955.0

1,617.2

1,000.0

1,256.5

1,419.8

1,625.7

Singapore

29.1

29.7

30.5

31.5

32.6

34.1

South Africa

11.7

12.5

13.4

15.5

17.5

19.9

Thailand

48.9

60.6

57.7

61.1

64.9

69.3

Turkey

14.6

14.7

14.6

28.8

32.0

35.9

United Kingdom

165.6

172.6

170.3

178.5

187.2

197.4

USA

25.3

25.5

24.2

25.3

26.6

28.2

Other Destinations

1,494.9

1,581.1

1,631.2

1,788.7

1,913.9

2,052.5

Departures

3,598.0

4,484.4

3,942.5

4,459.0

4,824.9

5,264.0

Source:

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 2

Departures by Mode of Transport 2007-2012

 

'000 trips

 

2007

2008

2009

2010

2011

2012

Air

3,300.3

4,103.3

3,613.1

2,327.9

2,508.1

2,737.4

Land

253.5

332.1

276.9

169.8

185.4

204.8

Rail

-

-

-

-

-

-

Sea

44.2

49.1

52.4

1,961.4

2,131.5

2,321.8

Departures

3,598.0

4,484.4

3,942.5

4,459.0

4,824.9

5,264.0

Source:

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 3

Departures by Purpose of Visit 2007-2012

 

'000 trips

 

2007

2008

2009

2010

2011

2012

Business

1,014.0

1,256.1

1,090.4

702.9

753.6

822.4

Leisure

2,584.0

3,228.3

2,852.1

3,756.1

4,071.3

4,441.6

Departures

3,598.0

4,484.4

3,942.5

4,459.0

4,824.9

5,264.0

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Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

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Table 4

Business Departures: MICE Penetration % Breakdown 2007-2012

 

'000 trips

 

2007

2008

2009

2010

2011

2012

MICE

379.5

505.2

436.9

281.2

293.9

316.6

Other Business Travel

634.5

750.9

653.4

421.8

459.7

505.7

Total

1,014.0

1,256.1

1,090.4

702.9

753.6

822.4

Source:

Note:

Euromonitor International from official statistics, trade associations, trade press, company research,

trade interviews, trade sources MICE refers to meetings, incentives, conventions, exhibitions

Table 5

Leisure Departures by Type 2007-2012

 

% number of trips

 

2007

2008

2009

2010

2011

2012

Singles

11.4

12.2

13.2

14.0

14.3

14.5

Couples

11.8

11.9

11.8

12.5

12.9

13.1

Families

21.7

21.8

21.5

22.0

23.0

24.0

Group

15.8

15.3

14.8

14.3

14.1

14.9

Others

39.3

38.9

38.7

37.2

35.8

33.5

Total

100.0

100.0

100.0

100.0

100.0

100.0

Source:

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 6

Outgoing Tourist Expenditure by Geography: Value 2007-2012

 

AED million

 

2007

2008

2009

2010

2011

2012

Bahrain

335.3

422.9

381.3

386.1

393.5

405.1

Egypt

2,581.0

3,592.7

3,913.3

3,988.6

4,085.1

4,231.4

France

333.8

420.6

377.9

382.8

391.0

402.2

Germany

1,242.8

1,625.5

1,462.8

1,486.0

1,519.3

1,570.3

India

769.5

978.7

802.0

814.6

830.6

826.2

Iran

236.6

294.7

247.1

250.1

255.5

263.0

Jordan

300.4

378.1

369.9

376.9

386.6

401.3

Kuwait

409.2

521.0

455.2

461.6

470.7

485.4

Lebanon

2,047.4

2,771.3

2,650.0

2,704.3

2,774.3

2,905.1

Malaysia

1,114.9

1,451.5

1,275.4

1,296.8

1,327.7

1,374.8

Oman

1,727.0

2,240.2

1,923.9

1,957.6

2,007.8

2,089.8

Pakistan

507.3

663.5

554.8

563.4

575.1

593.4

Qatar

522.4

667.6

557.7

566.1

577.9

595.7

Saudi Arabia

1,596.9

2,067.6

1,740.7

1,792.0

1,841.2

1,909.0

Singapore

717.9

928.6

882.2

901.4

938.7

978.9

South Africa

233.5

294.5

263.8

267.2

272.4

280.2

Thailand

369.7

483.5

460.9

469.5

480.7

498.9

Turkey

285.1

359.5

354.3

361.4

371.6

385.5

United Kingdom

1,428.1

1,854.1

1,596.0

1,617.2

1,653.8

1,706.0

USA

693.7

896.5

763.3

775.2

791.7

816.7

Other countries

4,189.6

5,304.0

5,681.7

5,733.1

5,825.5

5,987.9

Total

21,642.3

28,216.6

26,714.2

27,151.7

27,770.9

28,706.6

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Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

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Table 7

Outgoing Tourist Expenditure by Category: Value 2007-2012

 

AED million

 

2007

2008

2009

2010

2011

2012

Accommodation

5,275.6

6,878.0

6,411.4

6,503.3

6,614.4

6,787.8

Entertainment

2,949.4

3,845.3

3,472.8

3,541.2

3,623.0

3,748.0

Excursions

2,406.9

3,137.9

2,938.6

2,998.3

3,083.8

3,203.9

Food

3,586.2

4,676.0

4,541.4

4,601.0

4,701.0

4,859.5

Shopping

5,554.4

7,241.6

6,678.6

6,809.7

6,974.1

7,224.6

Travel Within Country

1,869.8

2,437.7

2,671.4

2,698.2

2,774.6

2,882.8

Other Outgoing Tourist Expenditure

-

-

-

-

-

-

Outgoing Tourist Expenditure

21,642.3

28,216.6

26,714.2

27,151.7

27,770.9

28,706.6

Source:

Euromonitor International from official statistics, trade associations, trade press, company research,

Note 1:

trade interviews, trade sources Entertainment includes attractions, theatres, guided city tours, etc

Note 2:

Food includes restaurants

Note 3:

Other outgoing tourist expenditure includes travel agent services

Table 8

Method of Payments for Outgoing Tourism Spending: % Breakdown 2007-

2012

% value

 

2007

2008

2009

2010

2011

2012

Cash

6.0

5.0

6.0

5.0

4.9

4.8

Credit Card

49.0

50.0

49.0

50.5

51.0

52.0

Charge Card

5.0

6.0

7.0

6.0

7.1

7.2

Debit Card

24.0

25.0

24.0

24.5

25.0

25.0

Traveller's Cheques

6.0

5.0

5.0

5.0

4.0

4.0

Prepaid Cards

10.0

9.0

9.0

9.0

8.0

7.0

Total

100.0

100.0

100.0

100.0

100.0

100.0

Source:

Euromonitor International from official statistics, trade associations, trade press, company research,

Note 1:

trade interviews, trade sources Direct purchases only

Note 2:

Table represents method used at time of purchase

Table 9

Forecast Departures by Destination 2012-2017

 

'000 trips

 

2012

2013

2014

2015

2016

2017

Bahrain

17.1

17.5

18.0

18.7

19.5

20.4

Egypt

76.1

78.3

80.7

83.8

87.0

90.6

France

18.7

19.3

20.0

20.8

21.6

22.7

Germany

148.1

162.5

175.6

187.9

200.3

216.0

India

38.0

40.1

42.8

46.2

50.0

54.3

Iran

12.5

13.0

13.7

14.5

15.3

16.3

Jordan

17.5

18.2

18.9

19.7

21.0

22.4

Kuwait

18.2

18.8

19.6

20.5

21.6

22.9

Lebanon

365.8

391.1

419.6

452.7

493.9

543.7

Malaysia

93.9

99.3

104.5

109.6

115.5

122.4

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Oman

345.7

366.8

388.1

409.3

430.3

450.9

Pakistan

23.8

24.8

25.9

26.8

27.6

28.4

Qatar

25.6

26.9

28.4

30.0

31.8

33.7

Saudi Arabia

1,625.7

1,875.3

2,134.1

2,406.4

2,681.4

2,955.7

Singapore

34.1

35.8

37.6

39.7

41.6

43.5

South Africa

19.9

22.7

25.9

29.3

33.4

37.6

Thailand

69.3

74.3

79.9

85.4

90.9

96.6

Turkey

35.9

40.8

46.5

53.5

60.9

68.7

United Kingdom

197.4

209.2

222.5

237.4

254.8

274.3

USA

28.2

29.9

31.6

33.3

35.0

36.7

Other Destinations

2,052.5

2,226.9

2,427.1

2,648.3

2,902.5

3,189.2

Departures

5,264.0

5,791.4

6,361.0

6,973.8

7,636.0

8,347.1

Source:

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 10

Forecast Departures by Mode of Transport 2012-2017

 

'000 trips

 

2012

2013

2014

2015

2016

2017

Air

2,737.4

3,010.6

3,301.0

3,614.2

3,954.9

4,317.9

Land

204.8

227.6

253.2

281.4

312.3

346.4

Rail

-

-

-

-

-

-

Sea

2,321.8

2,553.2

2,806.8

3,078.1

3,368.8

3,682.7

Departures

5,264.0

5,791.4

6,361.0

6,973.8

7,636.0

8,347.1

Source:

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 11

Forecast Departures by Purpose of Visit 2012-2017

 

'000 trips

 

2012

2013

2014

2015

2016

2017

Business

822.4

904.2

989.7

1,082.5

1,184.4

1,293.8

Leisure

4,441.6

4,887.2

5,371.3

5,891.3

6,451.6

7,053.3

Departures

5,264.0

5,791.4

6,361.0

6,973.8

7,636.0

8,347.1

Source:

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 12

Forecast Outgoing Tourist Expenditure by Geography: Value 2012-2017

AED million

 

2012

2013

2014

2015

2016

2017

Bahrain

405.1

410.8

419.6

428.6

432.1

436.5

Egypt

4,231.4

4,320.9

4,432.9

4,543.5

4,640.2

4,775.5

France

402.2

408.7

418.1

427.1

435.2

446.1

Germany

1,570.3

1,598.0

1,636.8

1,675.1

1,706.4

1,742.7

India

826.2

838.2

855.7

874.7

889.2

901.8

Iran

263.0

266.6

272.1

276.1

281.5

288.8

Jordan

401.3

411.0

422.3

434.7

444.6

455.7

Kuwait

485.4

492.6

504.4

515.7

522.9

532.7

Lebanon

2,905.1

2,967.4

3,063.2

3,138.5

3,206.2

3,292.8

Malaysia

1,374.8

1,400.7

1,438.4

1,466.8

1,493.5

1,508.4

Oman

2,089.8

2,140.0

2,206.0

2,267.2

2,315.4

2,378.1

©

E u r o m o n i t o r

I n t e r n a t i o n a l

T O U R I S M

F L O W S

O U T B O U N D

I N

T H E

U N I T E D

A R A B

E M I R A T E S

P a s s p o r t

8

Pakistan

593.4

603.7

618.6

632.3

641.9

657.9

Qatar

595.7

605.5

620.4

633.8

645.0

664.3

Saudi Arabia

1,909.0

1,952.9

2,008.1

2,061.6

2,110.3

2,166.3

Singapore

978.9

1,008.6

1,037.0

1,067.6

1,089.6

1,120.1

South Africa

280.2

285.6

291.0

296.1

300.6

304.9

Thailand

498.9

509.6

523.0

536.6

547.9

561.6

Turkey

385.5

393.2

404.3

414.5

424.3

439.7

United Kingdom

1,706.0

1,741.2

1,786.1

1,727.2

1,703.3

1,733.0

USA

816.7

831.4

851.5

871.0

889.2

914.7

Other countries

5,987.9

6,048.4

6,162.6

6,390.4

6,591.2

6,771.7

Total

28,706.6

29,235.1

29,972.3

30,678.9

31,310.7

32,093.4

Source:

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

©

E u r o m o n i t o r

I n t e r n a t i o n a l