Sun shines bright for Dubai retail

The heat outdoors has done nothing to cool the emirate's already bullish malls, stores and hotels, which are reporting revenues and visitor numbers rising compared with last year.

Retail sales are booming. Charles Crowell for The National

Sales, sun and sea are a heady mix with retail brands and hotel chains cashing in on the Dubai Summer Surprises shopping festival.

This year was already predicted to bring a sales bonanza for the retail and hospitality industries as companies talked of potentially eye-watering revenues and profits.

And coming at the end of the first half of the year, Dubai Summer Surprises (DSS) was the first real acid test for the confident rhetoric of retailers and hoteliers.

But it seems they were highly accurate about forecasts for growth as executives now confirm a very bullish first six months, with DSS a big winner.

"I'm sure everyone noticed that the city was packed. That's usually not the case during summer," says Fuad Sharaf, senior asset director for Majid Al Futtaim (Maf) Properties, the operators of Mall of the Emirates, Deira City Centre and Mirdif City Centre, which collectively had their best DSS season. "We had residents, we had loads of tourists ... Dubai provides the right platform for tourists."

Sales periods such as DSS and the city's Shopping Festival contribute as much as Dh16 billion (US$4.35bn) to the economy, according to the Dubai Events and Promotions Establishment.

About 10 per cent more people walked through Maf's three malls in Dubai during DSS, which ran for a month from June 15, compared with last year, and Mr Sharaf says the higher footfall led to greater spending in stores.

"If you talk about the conversion rate, it's high, and higher than last year," he says. "The general conversations we have had with retailers have been positive."

He says visitor numbers to Mall of the Emirates have grown steadily each year, from 23 million when it opened in 2005, to 36 million last year.

"We definitely had growth in sales of about 20 to 25 per cent," says Ravi Rao, the group general manager for Rivoli Group, talking about Angels, the company's luxury brand for children. "There were customers coming from all over the GCC."

Ashish Panjabi, the chief operating officer for Jacky's Electronics, says sales increased 9 per cent over the festival, an increase that he described as "modest".

"Expatriates were buying not only for their local consumption but since many were going on holiday, there were a large amount of gifts being purchased," he says.

"We probably saw a lot more tourists in DSS this year, especially from within the GCC as many were on holiday before the start of Ramadan."

Retail and hospitality companies point to a booming tourist trade as one of the reasons for the success of DSS this year.

Wandering along The Walk, Dubai's popular promenade at the Jumeirah Beach Residence, huge numbers of GCC nationals and Chinese tourists are still evident in the many cafes and eateries, despite the mercury rising.

Hoteliers say they enjoyed high occupancy as a result of the continued influx of visitors to the emirate.

"We see a healthy increase of occupancy and average daily rates across all our hotels in Dubai with the key performance indicators above the levels of the same period last year," says Christian Pertl, the vice president for sales and marketing for Dubai at Jumeirah Group.

"Dubai Summer Surprises is a major attraction for families and visitors across GCC and we have seen an interesting increase in the room-nights production into our Dubai hotels from Saudi Arabia."

He says business from Saudi Arabia has increased by 35 per so far this year compared with last year.

Habib Khan, the general manager at the Arabian Courtyard Hotel and Spa, was just as bullish. He says his hotel was at 74 per cent occupancy last month during DSS.

"In our case, we witnessed a surge in GCC nationals and Australians. However, our main feeder market remained western Europe, particularly the UK," he says. "GCC guests are generally longer to stay compared to westerners. Stopovers are obviously for a couple of days only."

Dubai was ranked eighth in a list of the biggest tourist destinations in the world, beating cities such as New York, Barcelona and Rome, according to MasterCard's Worldwide Index of Global Destination Cities.

The index, which was released last month, forecasts visitor spending in Dubai to increase by 19 per cent this year to $8.8bn and tourist numbers to reach 8.8 million.

"Dubai's flourishing luxury hotel industry is pushing more people to come to the country in search of new experiences and five-star accommodation and dining," says Sana Toukan, an analyst at Euromonitor International, a market research and information provider. "DSS is another plus to coming to Dubai where people are attracted by the huge sales."

The Dubai Department of Tourism and Marketing forecasts tourist numbers to edge above 10 million for the first time this year as visitors from Saudi Arabia continue to cross the border in huge numbers and more Chinese tourists venture west.

Retailers also note that the shortened period for this year's DSS helped to make a more manageable sale period without diluting the attraction of the festival over a longer stretch. Until three years ago, DSS lasted for 10 weeks, and has been shortened each year since.

"Yes, definitely, DSS for a month only is a good idea," says Anuraag Sinha, the managing director Liali Jewellery. "With DSF [the Dubai Shopping Festival], DSS and other festivals within a calendar year, we cannot continue to be on sales and offer the same discounts for several months as it will defeat the entire purpose ... and create mistrust and confusion in the minds of consumers who wish to purchase at normal times."

"This year's DSS is the shortest in its history since 1998, and we yet have to wait for the final results of our research to evaluate," says Laila Suhail, the chief executive of the Dubai Events and Promotions Establishment.

"However, we should note that although DSS concluded on the 14th of July, it will be shortly followed by 'Ramadan in Dubai' and 'Eid in Dubai' celebrations, so the whole summer in Dubai is a non-stop of events and festivals just as much as if it was a longer version of DSS."

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