Mon. May 20th, 2024

In 2019, retail tourism contributed 6 percent — or about $178 billion — to the gross domestic product (GDP) of the global travel and tourism industry. This is according to a report released by the World Travel and Tourism Council (WTTC) and Hospitality and Tourism Research Center of The Hong Kong Polytechnic University in September last year.

The report, done in collaboration with The Bicester Collection, revealed that in some destinations, the contribution of retail tourism even exceeds 15 percent. While more recent figures have yet to be unveiled, one thing is clear: shopping remains a vital driver of global tourism and economic growth.

More than just souvenirs

Shopping is an essential part of the travel experience. From the perspective of travelers, it allows them to explore local culture and products. Meanwhile, for the local economy, retail tourism means more revenue and job opportunities.

Today, many tourists visit global destinations just to shop. Data from YouGov reveals that about 18 percent of global travelers stated that shopping is their main reason for traveling. This underscores just how potent shopping destinations can be in boosting the international tourism sector.

Whether tourists travel mainly for shopping or as casual visitors, every dollar spent contributes to the host economy. In 2023, the global retail sector saw significant financial contributions from international tourists, with the average expenditure per tourist reaching $244.86. This spending highlights the critical role of shopping in the travel experience — not only as a leisure activity but also as a key economic driver.

WTTC President and CEO Julia Simpson remarked, “Retail tourism is no longer just about buying souvenirs; it’s a driving force behind the recovery of the Travel & Tourism sector, contributing significantly to revenue, job creation, and overall economic growth.”

“Travelers are looking for authentic brands that capture the culture and uniqueness of their destination, as well as luxury brands in a luxurious setting,” added Simpson.

A wealth of retail destinations

Dubai, the most populous city in the United Arab Emirates (UAE), is undoubtedly a world leader in retail tourism. It’s home to around 100 malls that come in many shapes and sizes. One of the most popular, if not the most popular, is Dubai Mall.

According to recently released figures by the mall, about 105 million visitors went to Dubai Mall in 2023. This marks a more than 19 percent jump from 2022 figures. In the first two months of 2024 alone, the mall had already welcomed an impressive 20 million people.

“These numbers reflect Dubai Mall’s impressive status and mirror the forward-thinking leadership and strong economy of Dubai. Our mall embodies the city’s vibrant spirit and dedication to excellence, turning the leadership’s vision into a reality. Being an integral part of Dubai’s economic fabric, we play a crucial role in the city’s success and innovation,” said Mohamed Alabbar, founder of Emaar Properties, the company that developed Dubai Mall.

“This wide range of nationalities not only underscored the mall’s worldwide charm but also reflected the cosmopolitan culture of Dubai itself,” added Alabbar, emphasizing the mall’s appeal to tourists.

Beyond expansive malls like Dubai Mall, the city boasts other smaller shopping districts. City Walk, a notable example, features an open-air collection of sites, restaurants, and other entertainment attractions. Meanwhile, the Deira-located Gold Souk teems with independent traders where tourists can purchase gold and other precious commodities.

retail tourism

The rise of ‘retailtainment’

Dubai Mall is more than just a home to around 1,200 retail outlets. It’s a prime example of “retailtainment,” a trend that merges retail shopping with entertainment to create a more engaging consumer experience. Within the mall, there are other tourist destinations to discover, including the Dubai Aquarium and Underwater Zoo.

About a thousand kilometers from the UAE city, Riyadh is also rapidly evolving into a premier shopping destination. In the city, tourists have many options for a great shopping experience — from luxurious malls to boutique shops to conventional marketplaces.

Apart from these existing areas, the city will soon offer more options, as a number of “retailtainment” projects are underway. The Avenues – Riyadh, soon to be the largest commercial mall in the Middle East, exemplifies this expansion best. It’s an extensive 390,000-square-meter mixed-use development that will feature hotels, apartments, and event spaces.

Another ambitious project is being developed by Saudi Al Akaria and Arabian Dream Triple Five Worldwide. Aligning with Saudi Arabia’s Vision 2030 — whose main goal is economic diversification — the $5 billion venture located within the Al Widyan site will include theme parks, water parks, and a mix of recreational, retail, and dining facilities.

As WTTC highlighted in the report, “Newly evolving destinations such as Saudi Arabia can enhance their attraction by including retail tourism in their strategies.” These endeavors demonstrate the commitment and eagerness of the country — and the broader region — to develop destinations that can attract more tourists and boost the tourism sector as a major economic driver.

Read: Middle East travel market set to boom as tourists loosen purse strings

Sustainability in retail tourism

As retail tourism grows, there’s also a greater emphasis on sustainability. WTTC stressed how sustainability is becoming a significant factor influencing consumer choices in its 2023 report.

Data indicates that about 35 percent of tourists are likely or very likely to consider sustainability when making purchases during their travels. Moreover, 86 percent of these environmentally conscious shoppers are willing to pay at least a 5 percent premium for sustainable products.

Particularly notable is the response from tourists in the UAE, the U.S., India, and Saudi Arabia — they are willing to pay more than a 20 percent premium for sustainable products. This indicates a strong potential market for eco-friendly goods in these regions, which retailers can tap into.

For Professor Haiyan Song, “Sustainability in Travel & Tourism will continue to grow in significance after the COVID-19 pandemic.” Song is the Director of the Hospitality and Tourism Research Center in the School of Hotel and Tourism Management at The Hong Kong Polytechnic University.

“[I]t is imperative that retailers understand how much shoppers and travelers are willing to pay for sustainable products,” he added.

The evolving landscape of retail tourism — marked by the integration of sustainability, cultural immersion, and entertainment — points to a future where shopping becomes a vital pillar of global travel and economic development.

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