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Dubai embraces rise of high-spending Chinese tourists
A Lamborghini on the back of a trailer lorry on Sheikh Zayed Road attracted more cameras and admiration from a group of Chinese tourists than Dubai Marina on a recent weekday last month.
 
The group of 10 tourists were visiting from Xi’an, the capital of Shaanxi province in north-west China. One of the oldest cities on the Silk Route, Xi’an is home to the Terracotta Army built during the third century BC by the Emperor Qin Shi Huang.
 
“I had heard a lot about the high living standards in Dubai for a long time and wanted to see what it’s like with my eyes,” says James Sun, a 31-year-old government worker in Dubai with his wife. “I would recommend it to my friends.”
 
During their first day in Dubai, which started from the Anantara The Palm Jumeirah where they were staying, he and his fellow travellers would go to Dubai Museum, the gold souq, the spice souq and desert safari in a day.
 
On the second day of their trip they would go on to Abu Dhabi’s Sheikh Zayed Mosque and the heritage fort, staying at the Emirates Palace for two nights. On their last day they would also visit Burj Khalifa before flying out to China.
 
“We have Muslims and some of the similar culture but here it looks completely different from China,” he says.
 
Mr Sun is expected to be among at least 345,000 Chinese tourists to visit Dubai this year. The emirate attracted 344,329 guests from China last year, a 25 per cent increase over the previous 12 months, according to Dubai’s Department of Tourism and Commerce Marketing. It opened its fourth office in China in 2013.
 
High-spending Chinese tourists and their growing numbers have made them the new toast of the industry with travel agencies, hotels and retailers all vying to attract them.
 
But the outlook depends on close collaboration among the different emirates to ensure longer stays and a Mandarin language-friendly experience, say analysts and hoteliers.
 
“To make people stay in the UAE, Abu Dhabi and Dubai must work together; if not the UAE will still remain a transit hub,” says Jacopo Sertoli, the chief executive of Select Holding Group.
 
“Good flight connections, competitive [hotel room] rates, easy visa, and security” are all driving the growth of Chinese tourists to Dubai, according to Mr Sertoli.
 
But the percentage growth of Chinese visitors to Dubai this year is likely to be lower than last year’s rapid expansion.
 
“We do not expect a 25 per cent year-on-year growth to be sustainable in the longer term, simply due to the fact this is much higher than the projected growth rate in Chinese outbound travel,” says Rashid Aboobacker, a senior consultant at TRI Consulting in Dubai.
 
The Chinese outbound tourism growth rate is forecast at 10.4 per cent annually from 2013 to 2020 by CLSA, a Singapore-based brokerage and investment group.
 
“Moreover, the stabilisation of other Middle East destinations such as Egypt and Turkey may see more Asian tourists returning to these places in the future,” Mr Aboobacker says.
 
China’s GDP growth is slowing, but income levels are not expected to come down. In the first eight months of last year, the jobless rate in Chinese cities was about 5 per cent.
 
By 2022, more than 75 per cent of China’s urban consumers will earn between $9,000 to $34,000 a year, up from 68 per cent in that bracket in 2012, according to consultancy McKinsey.
 
The number of Chinese tourists to Dubai and the UAE has been increasing since 2009 when China relaxed travel restrictions for group tours to the Emirates.
 
According to data from the Chinese National Tourism Agency 63 per cent of the 20.3 million Chinese tourists that visited countries other than Hong Kong and Macau in 2011 travelled on a group tour. As of July 2013, China had approved 116 countries for group travel.
 
The number of travel agencies in the UAE that specialise in attracting Chinese tourists has also increased. Among them is China Sun Tourism Agency in International City. Vivian Guo, the sales manager at the agency, set it up along with her husband in 2008. She declined to give the number of tourists they handle each year, but says the numbers are on the rise despite the competition.
 
The tourists she handles on average spend around Dh6,000 to Dh10,000 per trip per person, and she says she draws mainly on he middle to upper-middle class. Those aged 25 to 50 accounted for about 78 per cent of the guests.
 
Companies in other sectors are also trying to attract high-spending Chinese tourists. Trade magazines published in Dubai in Mandarin are packed with advertising by property firms, retailers, banks and health care providers.
 
Dubai’s property sector, for instance, is increasingly attracting more Chinese investors. Last year, Chinese investors poured Dh1.77 billion into Dubai real estate in 1,023 transactions, up from Dh1.34bn in 1,050 transactions in 2013. There are various programmes that companies in the tourism industry can join to show that they cater to Chinese visitors including independent initiatives operated by international hotel chains for their properties such as Hilton’s Huanying and InterContinental’s China Ready as well as officially sanctioned certification schemes.
 
In February, more than 30 attractions and hotels in Abu Dhabi, including InterContinental Abu Dhabi, Royal Rose Hotel, Ferrari World and The Galleria shopping mall, received the Welcome Chinese certification from the China Tourism Academy (CTA), under the Chinese tourism ministry’s purview, and run by the Shanghai-based consultancy and tour operator Select Holding.
 
Select would not disclose more details on how many more companies in the UAE had applied for their certification.
 
The certification is valid for a year and can be renewed or upgraded, depending on services provided to Chinese tourists. Hotels need to pay a first year fee of €3,000 (Dh11,900) to €4,000 with renewal costing half the amount.
 
For attractions, the fees can range between €5,000 and €15,000 a year with the same renewal fee. In return, Select Holding promotes the hotels and attractions in the Chinese market. In return, hotels need to employ Mandarin-speaking concierges, show Chinese television channels and offer bank-card payment services from UnionPay, while retail outlets must have Mandarin websites.
 
InterContinental’s China Ready programme started last year. It has certified seven of its 12 properties in Dubai, such as InterContinental Festival City and Crowne Plaza Festival City.
 
Hilton’s Huanying programme, which translates to “welcome”, was launched for its properties in 2011.
 
Of Hilton’s 19 hotels in the UAE, four are part of the programme, including the Conrad Dubai and the Doubletree Ras Al Khaimah Marjan Island. It is looking to add a fifth — the Waldorf Astoria Dubai Palm Jumeirah — as the Chinese outbound tourism market continues to grow.
 
Participating hotels offer a Mandarin interpretation service, in-room tea kettles, jasmine tea, slippers and Mandarin television channels and a special Chinese menu, featuring congee with condiments, fried rice or fried noodles and a dim sum selection for hotel operators.
 
The key is to train more staff and to maintain more Chinese-friendly properties, according to Pascal Gauvin, the chief operating officer for India, Middle East and Africa at IHG.
 
“The scale is so huge,” he says. “And the middle class market is phenomenal.”
  Source: The National Business

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