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Arab Tourism in London, why it's important

In the past month, the UK has played host to a variety of events that attracted high-end visitors: Wimbledon Tennis Tournament, Glastonbury, and Goodwood among these. These events highlight the already thriving London travel season, as tourists come from around the world to take part in all the luxury experiences the city has to offer. This is most clearly seen in the luxury travel scene, dominated during summer by Arab and GCC tourists.


Throughout the summer months, the West End and high streets in other major UK cities host large groups of Arab tourists looking for a unique, exclusive shopping experience. Around a third of the UK’s overall tourism income is from luxury tourism, totalling around £30 billion. Arab tourists come to London, and other major cities like Manchester and Edinburgh (in a small percentage), purely for the shopping experience.

 

High end Arab tourism is not only valuable for the luxury shopping and accommodation fields, but also has a halo effect, helping the country with employment, preservation, investment, and even marketing. Thousands of people within the UK are employed in the tourism and retail industries supported by these visitors. Top attractions for these tourists include not only historic estates, but also historic shops and shopping areas; the money they spend in these locations is then reinvested into their own preservation. When tourists come to London and discover a love for the city, they are more likely to seek to invest in its businesses, and also recommend a trip to their loved ones. Arab consumers are far more likely to trust a word of mouth recommendation and proceed with a purchase, as opposed to responding to a marketing campaign. This promotes the country and city of London internationally, better than any marketing scheme could.

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Luxury tourism is essential for the success of many businesses and organisations across the UK, but no area relies on it more than London. International tourism accounts for 50% of purchases made in the popular West End shopping area, with non-Europeans spending three times as much as European tourists. This is largely driven by high spending Arab tourists.

"Around a third of the UK's overall tourism income is from luxury tourism, totalling around £30 billion"

Why London?

 

Currently, London is a very popular destination among Arab tourists due to its established luxury shopping districts where they can access exclusive shopping experiences that they will not find anywhere else. In fact, many Mayfair shops are entirely focused on customers experiencing their products, rather than trying to sell them. This is especially appealing to Arab tourists, who highly value a pleasant experience while shopping, and will reward shops and brands that provide this with high value purchases.

 

While London is already very appealing to Arab visitors, the government is currently working on making it easier for these tourists to make it to London for shopping holidays; however, there is more to be done, and individual shops and brands must also work to become a priority destination for Arab tourists.  

How can the UK do more to appeal to Arab tourists?

 

Tax-Free Shopping

 

While the UK government is making promising steps with their move toward visa free travel from the GCC and negotiating increased trade deals, the country took a massive step backwards with the end of tax-free shopping under Brexit. Prior to the end of tax-free shopping, it generated about £3.5 billion per year; however now that it has ended, international shoppers can no longer claim back their 20% VAT on purchases. This puts shops and brands in London at a severe disadvantage in comparison to European counterparts, where Arab shoppers can claim their VAT back.

 

This must be addressed on a governmental level in order to bring back tax-free shopping and eliminate this disadvantage. However, in the meantime individual shops must make themselves more appealing to overcome this, or introduce shipping policies, which can still have VAT claimed back.

"Prior to the end of tax-free shopping, it generated about £3.5 billion per year..."

Sunday Trading

 

In the UK, there are regulations in place over business hours on Sundays. Arab shoppers are often shocked by this, especially since Sunday is not a part of the weekend for most of the Arab world. Other major shopping cities such as Milan do not face this regulation, and in the Arab world, places like the Dubai Mall are open 24/7. The government could change regulations on Sunday trading to allow this with relative ease and without spending any money. Shops should then consider adjusting their hours to accommodate these shoppers, either extending their hours throughout the week, or choosing a different day to operate under reduced hours.

Cultural Awareness Training

 

Arab tourists highly value the experience and treatment they get when they are shopping in London. They want to feel comfortable and like when they are getting the most exclusive, luxury shopping experience possible. Not only do they want to go home with luxury products, but they also want to have stories to tell about doing the shopping itself. If they are happy with the experience they had, they will share this with their loved ones, and anyone they speak to in London. This is the best form of marketing for the Arabs. Word of mouth travels incredibly quickly and you could end up with many more customers, simply by making sure one tourist has a very good experience at your shop.

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Unsure how to make sure you are providing the best possible experience for these tourists? We’re here to help.

 

By taking London Arabia’s Trust Me, I’m an Arab Cultural Awareness Training programme, you will be taught exactly how to tailor your in-store experience to achieve success with Arab shoppers. Our customised course will be focused entirely on your brand and store, to give you personalised advice on how to sell to Arab tourists in London.

UK remains prime spot for GCC investments

With the United Kingdom looking to make up for lost EU trade and the GCC countries attempting to diversify their exports, trade agreements are becoming a priority and the door is being opened for the UK and GCC to do business more closely.

 

There is already a very large flow of trade passing between the UK and GCC countries, but recently both parties have made it a priority to strengthen this relationship further. When combined, the GDP of the GCC counties is equivalent to the 13th largest in the world, yet their value of international trade has not matched this. In light of this, there is a clear opportunity for the UK and GCC to come together in a mutually beneficial free trade agreement. In steps toward this, Prime Minister Boris Johnson met with UAE President HH Sheikh Mohammad bin Zayed and announced investments of £10 billion in the coming years. A similar agreement was made with the Emir of Qatar, HH Sheikh Tamim bin Hamad Al Thani.

 

These large investments represent a path to recovery for the UK, following the damage of Brexit and decline in foreign investments since 2017. This could have massive implications for businesses based in either the UK or the GCC countries, with new opportunities being presented and markets expanding.

 

While international trade may feel like a far-removed issue, it is predicted a trickle-down effect could be felt as early as this summer. For individuals, wages in the UK could increase from £0.6 billion to £1.1 billion, depending on the agreement. For brands and businesses, the prioritisation of services such as tourism, could bring them a new customer base, with a higher spending power, throughout the summer travel season.

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Prioritising trade

 

Trade exchanges between the GCC countries and the United Kingdom increased steadily between 2010 and 2019, reaching £41 billion by the end of 2019. During this period, British exports to the GCC countries increased by 48% and GCC exports to the UK increased by 54%. However, exports underwent a significant decline in 2020 due to the Covid pandemic and corresponding restrictions, GCC exports to the UK decreased by 44% and British exports to the GCC countries decreased 16.3%.

 

The top products imported to the GCC countries from the UK are power generation engines (4 billion dollars), jewellery (1.5 billion dollars), cars (1.2 billion dollars), medicine and pharmaceutical products (730 million dollars), and transportation equipment (600 million dollars). While it is expected that large, specialised products like engines would be at the top of this list, as well as pharmaceutical products given the need for them in the past years, businesses in the UK may take note of luxury items also making the top five. This shows there is a demand directly from the consumers for luxury items, including jewellery and cars. Any luxury brand can take this as an encouraging sign that the GCC market could be very valuable to them.

"This could have massive implications for businesses based in either the UK or the GCC countries, with new opportunities being presented and markets expanding."

Top products imported to the UK from the GCC countries include oil derivatives (5.5 billion dollars), medium power generators (2.2 billion dollars) and gas (1.3 billion dollars). This is also a predictable result, but is expected to change in the coming years, with many GCC countries focusing on diversifying their exports through initiatives like Saudi Arabia’s Vision 2030.

 

In regard to services, including financial services and tourism, the UK has exported about 14 billion dollars to the GCC countries, and imported 6.1 billion dollars of services from the Gulf region. Tourism in particular has been given special attention from the British government, with the government recently announcing as of 2023, visitors from the GCC countries will no longer need a visa to visit the UK. In the meantime, they have now introduced an online visa waiver programme, just in time for the summer months, when many tourists from the GCC countries make their way to the UK.

 

Currently Qatar, the UAE and Saudi Arabia are the top investors in the UK in the region, but six GCC countries are involved in negotiations over opening a free trade agreement with the UK.

 

 

Qatar

Qatar is one of the largest non-European investors in the UK, with the country being the first major destination for Qatari investments. Direct investments in the UK from Qatar amount to approximately 43 billion dollars. The volume of trade exchange between the two countries to 5.8 billion dollars, of which 3.2 billion were imported to Qatar, and 2.6 billion were exported from Qatar.

"Trade exchanges between the GCC countries and the United Kingdom increased steadily between 2010 and 2019, reaching £41 billion"

UAE

 

The UAE was the UK’s first trading partner from among the GCC countries. It is now ranked as the 24th trading partner of the UK, with trade exchanges between the countries constituting 1% of the total trade exchanges of the UK.

The total volume of trade between the UAE and UK is about 16 billion dollars, with the UAE importing a total of 10 billion dollars from the UK and exporting a total of 6 billion dollars. In 2020, British investments in the UAE amounted to 9 billion dollars, and UAE’s investments in the UK amounted to 14.9 billion.

 

Saudi Arabia

 

The Kingdom of Saudi Arabia is currently ranked as the 27th partner of the United Kingdom, with the volume of exchange between them accounting for 0.9% of the total trade exchanges of the UK.

 

Trade between the two countries is valued at more than 13 billion dollars, of which 10.6 billion dollars are imported to Saudi Arabia from the UK and 2.8 billion dollars are exported to the UK. In 2020, British investments into Saudi Arabia amounted to 6.7 billion dollars and Saudi Arabia invested 1.2 billion dollars in the United Kingdom.

 

In 2018, the two countries signed a Memorandum of Understanding, pledging trade exchanges and mutual investments that amounted to about 79 million dollars.

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Conclusion

 

According to estimates by the British Department for International Trade, the trade demand for the GCC countries will reach 270 billion dollars by 2035. According to the same source, the UK could increase its share of exports to these countries by 6% in reference to what it exported in 2020, an increase of up to 30 billion dollars.

 

This could see massive opportunities arising for British businesses looking to expand into the GCC countries. New trade agreements could give them the chance to begin exporting products to the region or begin establishing bases there.

 

However, in order to be successful with this, the companies and employees must first be aware of Arab culture and how to do business within the GCC countries. If they invest sufficiently in doing so, they are sure to see massive returns. Luxury brands and any company or organisation that can market towards tourists will feel the direct effects of the government’s efforts this summer when the peak travel season begins.

 

Reinvest in your business to get the most out of the changing trade landscape and new markets available to you, by training your employees and yourself to understand the GCC countries and how to successfully do business with them.

 

If you are looking to help your business transition to make the most of these new opportunities, we are here to help with London Arabia’s Trust Me, I’m an Arab Cultural Awareness Training programme. This programme is customised entirely to your business, to help understand the GCC countries and the growing market available there.

 

For more information or to register for a free consultation, email allison@londonarabia.com or visit
our website at
https://www.londonarabia.co.uk/middleeastculturalawarenesstraining
.

London missing an opportunity in the Arab world?

 A musical performance, joking with James Corden, and ‘banging the drum for London’ were all on the itinerary for London Mayor Sadiq Khan’s five-day trip to the United States earlier this month. His trip was designed to promote London tourism, an important aim that will hopefully lead to rising tourist numbers, with many Americans interviewed saying they would like to go to London now. Great, but this brings the question, is London missing out by not making similar efforts in the Arab world? Will the Mayor plan a visit to any of the Arab countries to advertise his city to the valuable tourists there?

 

    Mayor Khan is overlooking and failing to appeal to the largest source of tourist income for the city: the Arabs. In New York City he launched the first international branch of his Let’s Do London campaign, investing £10m in promoting tourism in the United States, Germany, and France. In his two terms in office, he has made many international trips to promote the city but has never been to the Arab world. While his recognition in the importance of bringing international tourism back to London is commendable, he is not recognising the needs of luxury tourism and retail in his city.

Changing look of tourism

 

Tourism today is unrecognisable from the industry prior to the pandemic, making targeted marketing in light of these changes more important than ever. Motivations for travelling, popular destinations, and tourists’ desires have all changed since international travel reopened, presenting an opportunity for destinations if marketed correctly. At the ATM in Dubai, surveys found Arab travellers were more likely to be looking for experiences and attractions that may be new to them than they were previously. Many cited London as a desirable destination, despite having been before, but did mention they would be interested in seeing new sites. Experts have stressed the importance of marketing the diverse and unique experiences London has to offer in order to cater to the needs of this evolving Arab consumer base to maximise the recovery rate of London’s tourist industry.

 

"Prior to the pandemic, only 4% of travellers to the UK came from the GCC or China, but these visitors were responsible for 60% of international purchases."

Arab visitors come as families to London, and they are also staying for longer. This presents a huge economic opportunity for London, a city that is very dependent on money from tourism; nearly 1 in 7 jobs are in the tourism industry and it accounts for over 10% of the city’s GDP. Prior to the pandemic, only 4% of travellers to the UK came from the GCC or China, but these visitors were responsible for 60% of international purchases. GCC travellers spend an average of 6.5 times as much as European tourists, with people from Saudi Arabia spending the most.

West End shopping

 

Even despite the preference for new experiences and attractions rising, shopping still remains very high on Arab tourists’ priority list and there is nowhere better for shopping than London’s West End.

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London’s West End is known worldwide for its unparalleled luxury shopping and has now established itself as the most popular tourist destination in the city. People travel from around the world to take advantage of the streets packed with their favourite designer brands, and when they arrive, they are willing to spend big. Although international visitors only accounted for 25% of the visits to West End in 2019, they were responsible for 50% of the spending and those from the Arab world and China spent three times more than European tourists. However, the Mayor of London is still not seeing the value of marketing to them. With continued Covid restrictions keeping Chinese tourists from being able to resume their international travel plans, the Arab tourists are even more important. They are now the single highest international spenders, and investors, in London.

 

"Arab tourism is key to London’s economy and the survival of many brands that choose to base themselves there."

Luxury travel is recovering more quickly than any other section, and in reaction, many new luxury hotels have been opened in the city and even more are undergoing extreme renovation in order to meet the ever-increasing standards of luxury customers. Retail in London is also investing more in a luxury experience, and more specifically becoming increasingly mindful of Arab culture, preferences, and styles. These efforts come at a time when tourists are spending more while abroad, on average, due to being unable to travel and spend during the pandemic, meaning they could see massive returns from Arab travellers who are willing to spend big for these accommodations.

New destinations

 

Due to the newfound preference for new experiences, Arab travellers are looking to alternative destinations such as Turkey and Greece, where they can explore a variety of experiences, landscapes, and authentic cultures within a single destination.

 

Convenience was also listed as important to Arab travellers in 2022, making it unsurprising many are opting for ‘staycations’ in their own countries or neighbouring destinations. Saudi Arabia for example has seen a huge rise in tourism from fellow Arab countries, looking to explore their authentic heritage and culture, even aside from the country’s religious significance.

 

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Even when shopping is one of the main purposes of travel, tourists are turning their attention to Paris and Dubai, rather than going directly to London.

 

London is failing to market to Arab audiences to compete with these emerging options. The city is home to a culture of its own and incredible experiences that cannot be found anywhere else, but these are only being promoted across the ocean in the United States. American and European tourists are valuable, but alone are not enough to help the London tourist industry thrive.

National efforts

 

Nationally the UK has recognised this and made significant progress in appealing to Arab tourists. The government recently expanded the e-visa waiver programme to cover all GCC countries. This is especially important post-pandemic, as many Arab travellers are preferring to book holidays at the last minute, so must choose destinations where visas are not required or easy to obtain. However, in the aftermath of Brexit, tax-free shopping is no longer available, putting the London shopping scene at further risk.

Conclusion

 

We believe Sadiq Khan’s efforts to increase tourism are admirable but, they would be far more beneficial if he would put equal effort into welcoming Arabs into the city. He should take full advantage of the relaxing of visa requirements and the changing tourist preferences to market London to the Arab world in a new light. By not doing so, he risks the livelihood of West End, luxury tourism, and all that depend on it in London. Currently the city is missing out on the high-spending Arab tourists in favour of other destinations, even when the purpose of their trip is shopping.

 

Changing travel preferences, increased ease of travel from the GCC, and a continued willingness to spend big present a wonderful opportunity to revive the tourism industry; but London risks missing out if the mayor and his marketing campaigns do not give the Arab world the attention it deserves.

 

When looking to increase London tourism and help the industry and retail recover from the economic turmoil of the pandemic, it would be good to see Mayor Sadiq Khan travelling to the Arab world, to present London as a place where they can travel with ease, where new experiences and attractions are always possible, and that the West End is the first choice for all luxury shopping and hospitality. A more diverse and inclusive approach to marketing is needed to ensure London gains the greatest benefits from tourists from all around the world and does not miss out on the incredibly valuable Arab tourists.  

UK makes exciting progress in relations with Saudi Arabia and Bahrain

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Beginning June 1st, citizens from Saudi Arabia and Bahrain may apply for an electronic visa waiver to enter the United Kingdom for up to six months. This move represents huge progress for the United Kingdom, as they seek to strengthen relationships with the GCC. Previously only the UAE, Kuwait, Qatar, and Oman had this privilege and travellers from the remaining countries had to go through biometrics and obtain a visa to enter the United Kingdom for any reason.

 

The evisa is very easy to apply for and does not require any appointments, it can be completed on a computer, tablet, or mobile device. It not only takes less time and is simpler to apply for, but it also only costs £30, removing a huge financial barrier for people looking to travel. Once completed, people with the waiver may stay in the UK for up to six months as a tourist or student.

 

This is a huge move for the United Kingdom, and its connection with the Arab world. By opening the door for tourism, cultures can mix, resulting in an increased understanding and appreciation. It also allows for innovation and shared insight between students and academics, athletes can more easily compete, and businesspeople can invest and collaborate with one another, to name just a few of the advantages.

The perception of Saudi Arabia in the West is massively improving, with football star Lionel Messi announcing this week he will be the country’s tourism ambassador and Wizz Air, a popular European discount airliner, looking to begin flights to Saudi Arabia.

 

Saudi Arabia is becoming more and more open to the outside world, as these developments all prove, and opportunities are being presented. For tourists, the country is full of rich heritage and culture, for those looking to expand their businesses, there are opportunities for new investments and markets to be reached and for sports players and fans new and exciting competitions are emerging.

 

At London Arabia Organisation, we are looking forward to welcoming more people from Saudi Arabia to the United Kingdom in the coming months and beyond. We are confident the relationship between the two countries will only grow stronger and are delighted with the progress that is taking place.

 

If you or your business are interested in taking advantage of this progress but need assistance understanding how to approach the other culture or how these developments could open opportunities for you, please email info@londonarabia.com to enquire about our personalised cultural awareness training programme.

 

If you are looking to learn more about Arab culture and how to do business with the Arab world, both at home and abroad, Trust Me, I’m an Arab by London Arabia CEO Omar Bdour, is a valuable resource. It contains all the essential information you need to know to avoid making damaging cultural errors, in an approachable way. Trust Me, I’m an Arab is available for purchase on Amazon at:

https://www.amazon.co.uk/Trust-Im-Arab-Unwritten-Business/dp/1838291105?