PARIS — Luxury retailers and local officials across the Gulf are adapting their stores and services to cater to future waves of younger, digital savvy and luxury-hungry tourists, Chalhoub group president Patrick Chalhoub said Tuesday.
“An enormous amount of investment in tourism and, in particular, luxury tourism is taking place in the Middle East in conjunction with the 2020 World Expo in Dubai,” said Chalhoub, speaking at a breakfast press event at the Hôtel de Crillon in Paris. The group presented its seventh white paper on the subject, drawn up with Condé Nast Traveller Middle East, before heading to London and Milan for similar presentations.
The Dubai-based company operates more than 600 luxury boutiques in the Middle East, and owns labels including silverware-maker Christofle and fashion brand Ingie Paris.
Tourism to the Middle East has reached 64 million, up 10 percent compared with a world average of 6 percent growth, likely more than doubling the number of visitors in the next two decades, noted the group, citing Word Tourism Organization figures.
“For us this luxury tourism is an opportunity,” added Chalboub. Regional efforts to draw tourism include “shopping festivals,” which last year in Dubai drew a high proportion of foreigners, around 60 percent for a two-month event, according to the group.
That country saw 12 percent growth in Chinese visitors last year, which now rank fourth in terms of visiting nationalities, and is home to Dragon Mart, which bills itself as the world’s largest Chinese trading hub outside of China, drawing more than 40 million shoppers a year looking for deals on items like household goods, building materials or clothing.
Religious tourism, amusement parks, cruise ship tours, cultural institutions like the Louvre in Abu Dhabi and an increasing number of ecology-geared destinations, like turtle reserves, are also drawing visitors to the region, according to the presentation.
“The number-one priority is really to focus on experiences, not just products, which can be found anywhere in the world,” noted Chalhoub, adding they should be adapted to the type of client, no matter where they are from.
Noting an increasing number of younger generations purchasing luxury goods and services, this tends to be a population that prepares not just lodging ahead of time, but also shopping destinations, the executive observed. The group has set up a web site in China called the Golden Circle, to follow Chinese clientele.
In Dubai, “today we don’t yet have an offer that’s best adapted to the Chinese clients,” Chalhoub noted.
Speaking of luxury consumers of all nationalities, Chalhoub said he saw the need to offer more differentiating factors to attract consumers — “the brand of a product alone is no longer sufficient to capture their attention.”
He recalled the days when the dream of a luxury boss was to have the same store with the same products, displayed in the same manner around the world, noting that such an approach these days would likely cause a good proportion of stores to be deserted.
The executive cited an example of a collaboration with a local artist — he declined to name the brand — working with calligraphy and poetry, and noted that they were surprised that it generated interest from a large proportion of tourists in addition to the local shoppers they had in mind for the project.
Daniela Riccardi, chief executive officer of Baccarat, which is controlled by Fortune Fountain Capital attended the presentation, noting that she had observed a decreasing proportion of business generated with local clientele in locations around the world, estimating the figure around 30 percent or 40 percent for luxury brands, which has affected the label’s approach to setting up its stores.
“Since we are a bit late in retail, as we were mostly sold through wholesale channels, I told my teams ‘Let’s try to be fashionably late,’” she joked, noting the company’s stores include bars and lounges, putting its crystal glass ware in a lifestyle setting.