Dubai Summer Surprises could see a dip because of football fans watching matches instead of going to malls and recession-hit Europeans staying home.
Euro and World Cup hang over shopping festival
A weak euro and the FIFA World Cup are expected to dampen this year's Dubai Summer Surprises shopping festival, which starts today. The festival, which was launched in 1998, combines discounts at hotels and shops with entertainment events to stimulate tourism and retail sales during the hot summer months. Last year's sale saw a 4.7 per cent increase in visitor numbers and a 0.6 per cent increase in consumer spending from 2008. This year, more than 6,000 retailers and 21 shopping malls across the emirate are participating, organisers say.
But tourists from euro-zone countries are expected to be few and far between as the debt crisis in Europe undermines consumer sentiment on the continent. "The weaker euro is going to have an effect on this part of the world," said Arshad Hussain, the director of business development at The Monarch Dubai hotel. "It is recession times, and the last thing on their mind is an exotic holiday. Their currency is worth far less than what it was last year."
Mr Hussain added that he expected a greater number of visitors from India and China this year. Laila Suhail, the chief executive of the Dubai Events and Promotions Establishment, which organises the annual event, said the aim was at least to match last year's 2.2 million visitors, who spent Dh3.37 billion (US$918 million). She said, however, that hitting the target would be tough "because the number of days compared to last year is less".
Ms Suhail said the fluctuating currency was likely to limit shopping by European visitors. "I think that will definitely have an impact. People might not spend if we have people coming from Europe," she said. "But our focus is the GCC market." The generally lower value of the euro might not deter visitors from coming to Dubai but would curb their spending, said Tudor Allin-Khan, the chief economist at HC Brokerage in Dubai.
Mr Allin-Khan said many European tour operators sold packages earlier in the year and tourists were generally reluctant to cancel them. "When they're on the ground, and when they convert the euro to the local currency, it will be felt," he said. "It does reduce their spending power, but it will not reduce their willingness to come here." But the avid football fans crowding around televisions in homes and coffee houses may draw consumers away from the shops.
Tom Miles, the general manager of Festival Centre in Dubai Festival City, said since the World Cup began last week, traffic at the mall in prime evening hours had slowed. "When there is a big game, people are sitting in front of the TV and not shopping," he said. "Seventy-five per cent of the guests here are women and not traditionally big football fans. But it still has an impact." Some retailers are more optimistic. Majid al Ghurair, the chairman of the Dubai Shopping Malls Group and the president of BurJuman shopping centre, said retailers were hoping to see stronger sales this summer. "But if we maintain last year's figures, we will be more than happy because of what's happened with the economic situation around us," Mr al Ghurair said. @Email:firstname.lastname@example.org