Tax-free spending down

Gulf visitors post further drop

Tax-free tourist spending is still led by Saudi Arabian visitors, despite a 23 percent drop in 2012, according to Global Blue’s ‘insights into tourist spending’ report.

Spending by tourists from the KSA represented 17 percent of spending for which VAT was claimed. Emirati visitors came in second with 13 percent of spending, followed by Kuwaiti visitors with eight percent.

Barkev Atamian, Brand Manager at Atamian, agent for an array of middle and high-end watches brands, said that spending by Arab shoppers during 2012 represented less than ten percent of their sales. “Items bought had a wide price bracket. Some asked for affordable brands for $300, but others raised the ceiling up to $40,000,” he said.

According to the Ministry of Tourism, Iraqi nationals led tourist arrivals in 2012, representing around 28 percent of Arab tourists. Atamian said that although Iraqis visit their stores, they cannot be compared to Saudi clients: “Iraqi and Saudi tourists are incomparable, neither in terms of quantity of items purchased nor in terms of expenditure value.”

Tourist spending was mainly focused on clothing, accounting for up to 73 percent of the shopping basket, followed by jewelry and watches, with 12 percent. Spending on fashion and clothing dropped by eight percent year-on-year. Spending on jewelry and watches grew by 15 percent.

Zeina Annan, Marketing Director at Chronora, agents for Rolex, said that most of their clients last year were expatriates who found that prices of watches in the local market were very competitive. “We have very few Gulf nationals among our customers and they no longer have the same ample expenditures,” she said.