The rich economies of the Gulf are growing strongly but amid a mammoth array of discounts, raffles and promotions at this year's Dubai Shopping Festival, there are signs that consumers are becoming more value-conscious and thinking twice about spending after months of instability in the global economy. Daily light shows and fireworks along the Dubai Creek, night souks (markets) extending until after midnight , lotteries to win 19 kilos (42 pounds) of gold, and hotel promotions are features of the 32-day long festival for shopaholics. Now in its 17th edition, the festival started off in 1996 as a government initiative to promote retail sales and trade. “The Dubai Shopping Festival plays a major role in supporting the economy of Dubai and boosting it in various sectors,” said Laila Suhail, chief executive officer at organiser Dubai Events and Promotions Establishment. In 2011, the contribution to Dubai's economy from retail, travel and hospitality spending in the emirate during the festival totalled 15.1 billion dirhams, DEPE figures showed, including 5.9 billion dirhams spent by regional and international visitors . Total spending was equivalent to about 5 percent of Dubai's 2010 gross domestic product. Suhail said 4 million visits were made to the festival in 2011, of which 884,660 were regional and international visitors, mostly from India, the United Kingdom and Saudi Arabia. Total spending may climb further at this year's festival, which runs until February 5. Tourism has been strong — passenger traffic through Dubai's international airport rose 8.9 percent year-on-year in November — and the government of the United Arab Emirates has been boosting handouts to its citizens, partly to mark last month's 40th anniversary of the country's founding. But while overall sales may rise this year, there are indications that many individual consumers may be less free-spending and hold out for better bargains. Rose Sebuco, a sales assistant at Vipera, a Polish cosmetics and skin care brand, said: “Sales are not going well at all this year. We had a lot of visitors from Saudi and Kuwait last year. But nowadays it is really quiet.” Simon Williams, chief economist for the Middle East at HSBC, said consumer spending in Dubai, which is more exposed to global economic conditions through trade and tourism than many other Gulf economies, would be vulnerable this year.
