Dubai Duty Free sales to reach Dh3.7 billion


DUBAI (TVLW) — Dubai Duty Free is expected to break its record again with revenues forecast of at least Dh3.7 billion by 2008 from this year’s Dh3 billion ($800 million) due to air travel boom, a regional business leader said at a conference yesterday.

Anthony Chalhoub, joint chief executive of Chalhoub Group, which has business networks in Egypt, Syria, Jordan and Iran, said key travel retailers across the Middle East have overtaken the regional sales growth of 15 per cent.

eTN Chatroom: Discuss with readers from around the world:

Speaking before the Middle East Duty Free Conference, he said the average annual growth of travel retail sales at Dubai Duty Free jumps 26 per cent while Abu Dhabi Duty Free has a 33 per cent rise in sales, Sharjah has 26 per cent and Qatar Duty Free has 50 per cent.

“The outstanding growth witnessed in air travel is mirrored in travel retail sales,” he told participants to the two-day conference at Al Murooj Rotana Hotel yesterday.

Sales of Dubai Duty Free this year reached Dh2.25 billion ($616 million) as of end-September, with perfume as the best-selling item at Dh308.2 million ($84.3 million) or an increase of 25 per cent from a year ago.

Chalhoub noted that in order to keep pace with growing travel industry, the region is expected to invest up to Dh11 trillion ($3 trillion) in tourism and related infrastructure by 2020. He said that related income is seen to rise to over Dh1 trillion ($280 billion) by 2020 from Dh548.34 billion ($150 billion) in 2006.

Passenger traffic in the Middle East jumped 18 per cent during the first half of this year, or three times more than the world’s average. By 2020, the region is expected to receive 170 million travellers, 68.5 million of whom are tourists compared to 40 million in 2006.

Chalhoub, who is also general manager of four luxury brand distribution companies in the region and president of the Middle East Duty Free Association (MEDFA), stressed that opportunities in the region “lie in the confidence that governments and airlines have placed” in their future growth by way of substantial investments triggered by tourism boom forecasts.

“Challenges, on the other hand, lie not only in the political stability of the region but also in the relative appeal of the local markets vis-a-vis duty free due to low custom duties and a ‘grey market’ that still needs tighter control,” he told the conference, organised for MEDFA by the Tax Free World Association.

Grey market is the flow of new goods into markets other than those authorised by the manufacturer.

He said the region had the highest worldwide growth in travel retail sales at 15 per cent last year, with Asia Pacific coming in a far second at six per cent. “While the industry’s global growth slowed down…the Middle East was the only region to record a double-digit growth,” he said in a welcome address.

The region has also experienced a double-digit growth in aircraft movements and the number of passengers which, again, were topped by Dubai with 237,000 and 28.8 million, respectively, in 2006. Cairo was second with 106,000 aircraft movements and 10.8 million passengers.

The present combined passenger capacity of regional airports is expected to increase four-fold to 400 million travellers by 2012, with the US global aircraft manufacturer Boeing saying that the Middle East will have to invest in 1,160 aircraft by 2026 due to the increasing air traffic.