Russian tourists to Dubai down by half as rouble continues to fall

Russian tourists Vachislav Murko, left, and Stanislav Volkov at Oceanic hotel in Khor Fakkan. Sarah Dea / The National

Fewer Russian tourists are expected to check into Dubai’s hotels and hotel apartments next month as a falling rouble takes its toll on middle-class visitors.

The biggest travel season for Russian guests is the first two weeks of January, when they take time off for Orthodox Christmas and the New Year that coincide with school holidays.

But as hotels and tour operators report, the demand is almost half compared to a year earlier.

“The number of bookings from Russian travellers is down by more than 50 per cent in the last two months because of the falling rouble and oil revenues,” said Igor Egorov, the chairman of the Russian Business Council in Dubai. “However, there won’t be many changes from those who had planned holidays ahead on old exchange rates.”

The rouble has depreciated against the US dollar sharply since September as sanctions against Russia have kicked in. Despite a brief rally in recent weeks amid government intervention to shore up the Russian currency, it is down almost 40 per cent this year. Falling oil prices have also affected the economy of Russia, a net oil exporter, which analysts forecast to contract next year.

The number of passengers from Russia and the CIS countries passing through Dubai International Airport in October declined by 8.2 per cent year-on-year, after also dipping 5.5 per cent year-on-year in the previous month.

Russia was Dubai’s fifth-largest source market last year, with 400,000 guests.

“This year has been relatively slower, [but] it’s hard to gauge the impact with the statistics from the summer, since most Russian travellers are seen visiting the UAE during the winter,” said Adnan Aridi, the managing director of Alpha Tours in Dubai.

A drop in demand is also likely to impact the month-long Dubai Shopping Festival that starts on January 1.

Russian consumers were among the highest spenders during the 2013 festival, when shoppers charged more than US$82 million to their credit cards, up from $61.3m in 2012, according to Visa.

While the luxury travel segment is not expected to be hugely affected by the crisis, middle-class travellers are more mindful of their expenditure and many Russian expatriates living in Dubai are making holiday plans in their home country, according to Mr Egorov.

“Some business people would also like to stay closer to their businesses because of the uncertainty in the market,” he said.

The slowdown has been felt at the four-star Al Bustan Centre and Residence in Al Ghusais with 640 rooms and apartments, where Russian tourists form seven per cent of the clientele.

“We are seeing a notable decline in Russian tourist numbers this season, ranging between 45 and 50 per cent in the fourth quarter compared to same period last year,” said Moussa El Hayek, the chief operating officer of the property.

The high room rates in Dubai are also hurting demand, but that means properties in the Northern Emirates are attracting more of those on a tight budget.

“Traditionally lower-spending tourists go to Sharjah, as they can still be close to Dubai’s shopping malls,” Mr Egorov said. “The increase of tourists to Ras Al Khaimah or Fujairah might not be because of the [weaker currency], as the rooms are in a similar-cost category, but there are more rooms available there, as Dubai hotels usually have high occupancy.”

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