Weak Sterling to impact UAE tourism
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The devaluation of the British pound will be felt by the UAE’s tourism sector, analysts have agreed.
While the pound had been relatively stable in much of the third quarter of 2016, it plunged 6.5 percent in the first 10 days of October, with the currency now down by more than 17.43 per cent versus the dollar for the year.
With the UAE’s currency pegged to the US dollar, which has been strengthening lately, the plunge in the pound has eroded the spending power of British tourists visiting the UAE.
Monica Malik, chief economist at Abu Dhabi Commercial Bank (ADCB), said she expected a “marked deterioration” in tourism numbers and expenditure from UK visitors.
“UK visitors were the third largest source of tourism to Dubai in the first quarter of 2016, accounting for eight percent of the total. UK citizens were also the third largest group of hotel visitors to Abu Dhabi in Q1 2016 — excluding UAE nationals — with growth of six percent year-on-year,” she told Gulf News.
Western Europe (including the UK) was the second largest source of tourists to Dubai by region, accounting for 23 percent of visitors in Q1 2016. This is significant if the Brexit vote results in a worsening of the Eurozone crisis,” Malik told Gulf News.
Within the UAE, the impact may be stronger for hotels in Dubai compared to those in other emirates as Dubai is one of the primary destinations in the region for British travellers, according to Rashid Aboobacker, associate director at TRI Consulting.
However, he predicted the impact of currency fluctuations would be short term, offset by the UAE’s key selling points – accessible by air and blessed with year-round sunshine.
“The country is also home to a large expatriate British population, which brings a lot of families and friends here throughout the year,” Aboobacker said.
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