China’s Mall of the Emirates

I’m in transit at the moment in Amsterdam’s Schiphol Airport on my way home from a few days in Dubai, where I split my time between smarter cities and airports, alternately learning everything there is know about the former from Pacific Controls CEO Dilip Rahulan and chatting amiably about the latter with His Highness Sheikh Ahmed bin Saeed al Maktoum, who chairs Dubai’s airports, department of civil aviation, and Emirates Airlines. One thing I couldn’t help but notice on this trip (besides the view from the bar on the 123rd floor of the Burj Khalifa) was the ubiqutious packs of Chinese tourists. They snaked endlessly in lines at the airport, crowded the lobby of my hotel while waiting for tour buses (I heard more ni haos on this trip than as salam alaikums) and carried a minimum of four shopping bags everywhere they went.

As it turns out, I was in Dubai for the confluence of Chinese New Year and the Dubai Shopping Festival, when everything in the tax-free emirate is discounted still further. I describe the increasing trade and tourism links between China and the Arab world at some length in Aerotropolis, arguing that Chinese foreign direct investment may ultimately help Dubai’s economy get back on its feet. Tourism from China to the UAE has soared since the emirates landed on China’s “approved destination” list in the fall of 2009. Chinese tourism to Dubai soared 57 percent in the first half of last year, totaling 81,900 tourists in all.

The numbers should be even higher this year with Egypt out of the picture. The National reported a week ago that “hoteliers, restaurateurs and retailers throughout the Emirates are reporting a surge in Chinese visitors ringing in the Year of the Rabbit…Some might also be extending their stay in the UAE instead of continuing on to planned trips in troubled Egypt, experts say.”

This is just a taste of what the rest of the world can expect. The United Nations’ World Tourism Organization estimates there will be 100 million tourists departing China annually by the end of this decade – an estimate one Dubai economist I spoke to considered laughably conservative. The National also described how the emirates are rolling out the red carpet:

Luxury retailers say the rise in Chinese visitors started last year and they are expecting a wave of shoppers.

“The Chinese clientele is coming to Dubai, which was not seen before,” says Valerie Chapoulaud, a president of Louis Vuitton who oversees southern Europe and the Middle East.

Businesses are pulling out all the stops to attract more visitors than last new year and convince them to boost their spending, with special promotions that run for a couple of weeks into the Lunar New Year, even to the end of the month.

Many hotels are offering special meals and a la carte menus, while others have rolled out golf, spa and overnight packages for guests who visit over the next couple of weeks.

The retailer Bloomingdale’s says it plans to double its number of Chinese-speaking staff to cater for a growing number of customers.

“China is a massive market,” says Mr Goddard, and the Chinese New Year period is “going to be a huge opportunity for getting Chinese nationals to the Middle East. Anything that promotes the Chinese market would be good for the long term.”

Global spending by tourists from China was up 17 per cent in 2009 from 2008 to US$43.7 billion (Dh160.5bn), according to the UN World Tourism Organization.

Once again, Dubai profits from its neighbors’ misfortunes. Last month (i.e. before January 25th), New Silk Road author Ben Simpfendorfer spoke with Egyptian tour operators hoping to win a larger piece of the China action:

The CEO of an Egyptian tour company made a similar point to me this week in Cairo. He said the government has done a good job of increasing tourist arrivals to Egypt from just a few million to 13 million in the past decade. But he wondered whether the figure might have been 30 million if more money had been spent on tourism infrastructure. “What we need is some Chinese investment”, he said wishfully.

It’s interesting then that some of the new floating hotels travelling between Cairo and Aswan are “made-in-China”. So China is at least making such investment cheaper.

But what about Chinese tourists? They are anecdotally visiting Egypt in growing numbers. But from a relatively low base. They also prefer discount packages, and I hear that Brazilians, for instance, still outspend them significantly. It doesn’t help that Chinese tourists are more likely spend money on luxury goods, such as Louis Vuitton bags, while travelling abroad. And for that, it’s better to visit Dubai, not Cairo.