Dubai companies optimistic despite Russian travel sector woes

Hotels and high-end retailers in Dubai are optimistic that they can ride out the Russian tour operator crisis and possibly even benefit from it.

Rotana, which operates 15 hotels in the emirate and has a global sales office in Russia, is hopeful that the decline in Russian tourists because of the closure of some leading tour operators in the country would be offset by more tourists from the neighbouring Commonwealth of Independent States (CIS).

In fact, Rotana said that it had witnessed an increase in the number of travellers from Russia this year compared with last year.

The operator also believes that the fall in tourists because of the closure of five travel agencies – including IntAer, Labirint and Neva, because of declining demand on the back of a weakening rouble and the crisis in Ukraine – is transitional and will eventually pick up.

“We are still positive as such news eventually will drive [other] Russian market leaders to start offering more seats on charter flights at competitive rates,” said Mamdouh Ali, the area director of sales for travel trade at Rotana UAE.

Ajay Nair, the head of corporate travel and sales at the Dubai-based tour operator anta.Globalstar, said his company was looking to Central Asian markets such as Kazakhstan and Uzbekistan, to cushion the effect of the closure of Russian tour operators.

UAE luxury retailers also do not seem to be unduly perturbed.

“We have in fact seen a slight improvement in the number of Russian buyers may be because they are not travelling to Europe very much,” said Abraham Koshy, the chief operating officer for the watch division at Rivoli Group. “The season for us is September to April, so we can only talk about the impact from the coming season.”

The company has eight outlets in Dubai and markets watches under brands such as Tissot, TAG Heuer and Omega.

Pure Gold Jewellers, which has more than 14 outlets across the emirate, also had not noted any change in the number of Russian customers.

“It is difficult to gauge the impact of Russian tourist numbers during this summer season, as [they] usually come to the UAE between October and March,” said Karim Merchant, the managing director and chief executive of Pure Gold Jewellers.

The company said that about 10 per cent to 12 per cent of its sales to tourists came from Russian customers.

Russia was the emirate’s fifth largest source market last year, contributing 403,990 guests, 2.9 per cent more than the previous year.

On Friday, Russia retaliated against toughened western sanctions, mostly relating to finance and trade, by banning imports of several food items from the European Union, the United States, Canada and Australia.

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