Consumers in the UAE will travel more, spend more and continue to shop
Travel, Shop and Spend – Three striking preferences of consumers in the Middle East and the UAE. Results of the MasterCard Consumer Lifestyles survey conducted at the end of 2006 were revealed today highlighting some interesting shifts in consumer preferences.
The MasterCard Consumer Lifestyles survey is part of the bi-annual MasterIndex of Consumer Confidence, a survey commissioned by MasterCard Worldwide across South Asia, Middle East & Africa (SAMEA). The Consumer Lifestyles survey seeks to understand perceptions, choices and concerns that people have with regard to a number of lifestyle choices.
All consumers surveyed in the United Arab Emirates (UAE) plan to travel in the next twelve months, 84% for personal reasons, 2% for business and 14% for both. Across the Middle East & Levant (ME&L), consumers continue to travel, with 74% of consumers surveyed planning to travel out of their country in the course of the year.
Escaping the hot summer seems to be one of the main motivations for determining the travel period - residents prefer traveling in June (23%), July (28%) and August (15%). The latest survey shows UAE consumers favour India (43%), Egypt (19%), and Thailand (10%) as travel destinations. In the previous survey India and Egypt were also among the preferred destinations, and Thailand has substituted destinations such as Switzerland, Australia, Lebanon and Pakistan in this survey. Across ME&L, the choice of destination varies but Egypt (14%), India (17%) and other Gulf countries combined (9% each) are generally popular, but consumers continue to travel outside the region to destinations in Europe, North America and Australia.
Not surprisingly, the majority of ME&L consumers surveyed (79%) said they were going to spend more this year on personal travel than they did last year. In the UAE, 84% of those surveyed were planning to spend more, 1% more than in the previous survey (83%). Half of the UAE surveyed consumers (46% vs. 43% in 1H2006) anticipated they would spend between 11%-25% more on personal travel, while 17% said they would spend 26%-50% more, as opposed to 20% in the first half 2006. Spending on business travel looks to further increase in the next year with 59% (vs 41% in 1H2006) of consumers willing to spend more.
When traveling shopping is almost a must do holiday activity, ranking as the main activity enjoyed while on a personal travel trip for 61% (vs. 69% in 1H2006) of ME&L travelers surveyed. This was even higher among UAE consumers surveyed as 82% (88% in 1H2006) nominated shopping as their main holiday activity. This was followed by entertainment (74% vs. 59%), visiting family or friends (62% vs. 67%), rest and relaxation (56% vs. 43%) and general sightseeing (47% vs. 38%).
Safety and security is a concern for 74% of UAE consumers, a decrease compared to 87% in the first half 2006. Other concerns include losing a passport (56%), losing a wallet (48%), and being cheated (47%). Across the ME&L concern over security and safety is no longer the biggest worry (45% vs. 56% in 1H2006) for consumers who plan to travel this year. Surprisingly, the biggest concern for ME&L travelers overall is the risk of loosing one’s passport (47%).
The majority of UAE travelers own some sort of payment card whether it is a credit card (65%), a debit card (71%) or a prepaid card (37%). Consumers offer a variety of reasons for carrying a payment card when they travel.
Debit cards are becoming more popular as a payment method, experiencing a sharp increase in ME&L compared to the last survey (39% vs. 27%) but travelers still prefer to use their credit cards (53% vs 53% in 1H2006) to pay for their overseas travel expenses. Cheques, foreign notes and ATM withdrawal have become far less popular.
Consumers indicated a number of reasons for increasing their use of debit cards. For consumers, debit cards allow them to spend what is in the bank account (54%) and debit cards offer more control (40%). Consumers also state that debit cards are more secure than cash (36%), widely accepted (40%) and convenient (37%).
The most popular reason for using a credit is that it is more secure than cash (73% vs 77% in 1H2006). Other results from the latest survey show that across ME&L, 46% thought credit cards were widely accepted (against 39% in the last survey), 46% said a credit card gave them better control over their spending (against 34% in the last survey) and 43% thought a credit card gives better foreign exchange rates (as opposed to 33% in the last survey). This indicates that confidence in payment cards and the value they add to the traveler is increasing.