Dubai has continued to be a prime destination worldwide, with the travel and tourism sector growing, contributing 8.4% of the UAE’s GDP. It is expected to grow by 5.1% this year.
Travel and Tourism sector generated 307,000 jobs, and a job growth of 5.4% is forecast for 2015. This ideal performance has clearly had a positive effect on the retail sector.
Tourists are especially drawn to the many malls and high-end luxury brands that exist in the emirate. As a result, Dubai maintains its high rank in the world of retail. CBRE’s global market research report “How Global is the Business of Retail?” 2015 edition shows that Dubai retained its position as the second most important international shopping destination globally for the fourth consecutive year, behind London. This has caused investors in the real estate sector to develop new mixed-use infrastructures and mall expansions that highlight the city’s retail real estate space.
Dubai has a presence of 55.7% of international retailers, only less than 3% behind London (58%). Last year, Dubai attracted 45 new international brands with high-profile retailers including Hollister, Cavalli Caffe and McQ Alexander McQueen opening outlets in the emirate.
The growth in Dubai’s retail sector is linked to the increase in consumer confidence and growing retail supply, a product of the economy’s outstanding recovery, along with government support to boost tourism.
According to Emaar Malls, the Dubai Mall welcomed almost 80 million visitors last year, up almost 7% from 75 million visitors in 2013, making it a major retail destination for international tourists. Around 60% of The Dubai Mall visitors last year were UAE residents and other GCC tourists, while the other 40% were tourists from outside the region.
Chinese tourists were the biggest draws for Dubai’s hospitality market in 2014, with a 25 percent year-on-year growth in Chinese tourists.
The UAE government recognises the tremendous potential the retail and tourism industries hold for the economic growth. In line with Dubai’s tourism vision for 2020, significant steps have been taken to achieve the target of attracting 20 million annual visitors by 2020. In 2013, the UAE government announced to grant on arrival visas to 13 additional nationalities from the European Union. Measures such as these have positively impacted the tourism sector and enabled the emirate to attract more business and leisure travellers, boosting the retail sector and further strengthening Dubai’s competitive advantage in the global arena.
Dubai remains the clear destination of choice for the majority of brands looking to enter the region for the first time, frequently using the emirate as a stepping stone to wider regional expansion programmes in the GCC. 2015 is expected to be more testing for the tourism sector in view of the falling oil prices and economical and political uncertainty in some countries. Dubai, however, has strongly positioned itself as the premier tourist and leisure destination in the Middle East making it relatively resilient to market fluctuations.
In addition, new malls—Nakheel Mall and The Pointe on the Palm Jumeirah—are currently under construction. There are key projects to be developed in the coming decade, mainly Dubai Creek Harbour and Mall of the World. The malls envisioned there will be larger than Dubai Mall, which will potentially change the emirate’s retail landscape drastically.
With plenty to do, excellent infrastructure and world-class shopping and hotel facilities, tourism-driven retail growth in the emirate is set to continue.SOURCE: Roots Land Real Estate
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