Luxury travel to remain strong in region amid weak oil prices and economic slowdown
Luxury travel is expected to remain strong in the region despite the economic slowdown, say analysts and travel agents.
There was a 9 per cent increase in outbound luxury travel from the Arabian Gulf last year compared with the year earlier, and the figure is expected to remain steady this year, said Karthik Ramamurhy, Ipsos Business Consulting’s head of Middle East, Africa and India.
He said that 14 per cent of residents were able to spend US$7,000 on a family trip.
Mr Ramamurhy was speaking on the sidelines of Mice Arabia Congress – about the meetings, incentive, conference and exhibitions (Mice) segment of the travel business – in Dubai last week.
Luxury travel out of the region is patronised mostly by Gulf nationals and western expatriates.
The segment is expected to remain steady as “wealthy people will enjoy their wealth despite the oil prices and economic slowdown”, said Praveen Gandhi, the executive general manager for Kanoo Travel’s global operations.
The Kanoo Group started its luxury travel unit, Travel Attaché, in Dubai in 2012, and this year it expects to expand inbound luxury travel to the UAE.
Previously, it focused on outbound luxury travel. Travel Attaché’s inbound market is focused on India and this year it expects to expand to South Korea, China and Germany.
Travel Attaché aims to handle 1,800 inbound tourists a month, by September, up from 1,000 last month, Mr Gandhi said.
Optimism about luxury travel from the region rides on the back of the large number of wealthy people based here. In the UAE last year, there were 1,275 people with net assets of $30 million or more, controlling $225 billion of wealth, according to a report from the research company Wealth-X.
In the Middle East region, there are 5,975 of these very wealthy people who have total net assets of $995bn.
The attractive market has influenced some luxury travel service companies to open offices in the UAE. Last year, the British company Elegant Resorts, a luxury tour operator owned by Saudi Al Tayyar Travel Group, opened an office in Dubai.
Singapore’s Lightfoot Travel opened offices in Dubai two years ago.
It organises trips for wealthy people and for companies that spend between $10,000 and $1m, especially for trips with large families, travel, accommodation and food.
“Last year, we did 50 trips from the Gulf and this year we expect to do a hundred,” said Simon Cameron, Lightfoot Travel’s managing director.
“During the global financial crisis this segment did take a hit, but it has recovered since then.”
For Lightfoot Travel, Singapore and neighbouring countries are the largest revenue generators, followed by Hong Kong and Dubai. “But opportunity is more here than in Singapore,” Mr Cameron said.
The luxury tour operator Magnificent expects tourists from the Gulf to make up 20 per cent of clientele for the Greek island of Mykonos this year. That portion is 10 per cent higher than last year, said Ioannis Kalesakis, the founder of Magnificent.
“The average spend of one person is about €10,000 (Dh40,445) covering all villa, yacht, helicopter once, private car and food and beverage services on a daily consumption,” he said.
The agency arranges villas, luxury cars, yachts, private jets and helicopters for its clients.
The average age of the luxury Gulf traveller is 25 and that of the western expat, 30, said Ipsos.
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Updated: March 5, 2016 04:00 AM