Visa surge for festival shoppers in Dubai

Plastic was fantastic at this year's Dubai Shopping Festival as Visa enjoyed a surge in sales

People shopping in Al Ghurair Mall during the Dubai Shopping Festival. Charles Crowell for The National

Shoppers are spending much more on Visa cards at the Dubai Shopping Festival (DSF) this year than last as the rush for bargains and a surge in consumer confidence bolsters sales.

The card payment provider reported a 37 per cent increase in spending during the first week of the DSF this month, with 18 per cent of that estimated to be as a result of a rise in the use of cards in the UAE.

Karim Beg, the head of marketing for Visa in the Middle East, said there were many reasons for the increase in spending, including growing confidence among consumers.

"There's the positive sentiment in the economy, there's the fact that [Visa has] been associated with DSF for 16 years … and the fact that Dubai has been promoting inbound tourism," he said.

Visa is one of the major sponsors of the DSF and has been marketing the event globally in other parts of the world, including Asia.

It reported a huge increase in tourist spending during the festival last year compared with 2010, with Chinese tourists spending almost double on Visa cards.

Hotels have reported an increase in bookings, and raised room rates for the month-long festival, which runs for another two weeks.

Total additional retail, travel and hospitality spending in the Dubai economy as a result of the DSF this year is expected to eclipse last year's figure of Dh15.1 billion (US$4.11bn), of which Dh5.9bn was spent by regional and international visitors, according to the Dubai Events and Promotions Establishment (Depe), the body that organises the DSF.

The Depe spent Dh70 million in the past year on promoting the DSF through local events and overseas at roadshows in London, the wider GCC and Asia.

The total number of visitors to the DSF has increased from 1.6 million in 1996, its first year, to 3.5 million last year.

Visa estimates spending on cards on shopping, hotels, entertainment and restaurants during the DSF increased to $406m last year, from $297m in 2010.

Spending on cards, such as debit, credit and prepaid, is growing rapidly, but still makes up a much smaller proportion of buying compared with cash.

"Cash payments are still the largest single payment method in the region," Mr Beg said.

"If you go to other countries, it's even bigger [than the UAE]."

Visa said it had noted 15 per cent growth in debit card use in the past year.

Some retailers were wary that the timing of this year's festival, which began two weeks earlier than usual, would mean shoppers spent less because they had only just finished spending on festive holidays such as Eid Al Adha and Christmas, but Visa dismissed those anxieties.

"The consumer confidence in the UAE is definitely higher than the rest of the world," said Maysara Ghadban, the Visa head of marketing communication for the Middle East and North Africa.

"We are not wanting people to spend more, we want them to spend in a more rewarding way."