OBG talks to Colm McLoughlin, Executive Vice-Chairman, Dubai Duty Free

Interview: Colm McLoughlin

How sustainable is the current growth experienced within the aviation sector?

COLM MCLOUGHLIN: The fact is that, at the moment, the capacity of Dubai International Airport (DXB) is 60m passengers. In January 2013, Concourse A opened, which will be dedicated to Emirates 380 Airbuses, bringing DXB’s capacity to 75m passengers. More recently, the government approved the unveiling of a fourth concourse, which will require an investment of approximately $7.8bn. As part of its expansion programme, Emirates Airlines has ordered more than 200 new aircraft; and given their track record, they would not place an order of that size without having done their due diligence. In addition, Flydubai is now the second-largest carrier in the emirate, servicing 51 destinations at 410 flights a week, with a strategic growth pattern worked out. Naturally, as both these airlines expand, traffic at DXB will increase and thus our business will grow. Of course, we must ensure that we sell more to these growing passengers. From 1984-2011, the number of passengers through DXB grew from 3.6m to nearly 51m, while sales during that period saw a dramatic rise. We have doubled our sales six times since we began and by 2018, we will have done so again.

What is the impact of the influx of Chinese visitors?

MCLOUGHLIN: A decade ago Russian travellers were the emerging market and we had to buy special merchandise and reinvent our customer service to meet the demands of our new Russian clients. Now we must do the same for the Chinese. In the coming years our focus as an industry should be on how to accommodate the large number of Chinese – and to a certain extent Indian – tourists that have begun to arrive in the market. Chinese visitors are now one of the fastest-growing groups and now they are staying longer than in previous years. Hotels, malls and retailers should move quickly to ensure we are prepared to meet their needs.

We must make the effort to conduct research such that we develop the correct type of product offering so that we can capitalise on this burgeoning sector of the market. A growing number of Cantonese- and Mandarin-speaking staff will be required, especially for companies that tailor to luxury needs. However, hiring Chinese staff is becoming more and more difficult due to rising salaries in their home country.

Chinese tourists tend to purchase luxury items such as branded leather goods, handbags, footwear, specialised beauty products as well as premium tobacco products and alcohol. These shoppers now rank alongside those from Russia, India and Europe as our biggest spenders. Chinese credit card company UnionPay has emerged as the largest credit card company in the world, which we now accept for payment, and we also accept the yuan at all of our duty-free terminals.

How can Dubai enhance its international brand?

MCLOUGHLIN: DXB, along with some of the more established Dubai-based companies, have a certain responsibility to promote Dubai on an international level. Players such as ourselves, Emirates Airlines, Jumeirah Group, Emaar and Nakheel have always been at the forefront in this regard. However, beyond that, essentially all businesses that operate within the emirate have a certain obligation to help promote and support Dubai, as they benefit from the growth in tourism. Whether it is by sponsoring shopping festivals, sporting events or conferences, a range of these types of events will help strengthen Dubai’s international image and attract more visitors across the board.

However, from a more “big picture” perspective, it is vital that Dubai ensures that it does not become too expensive, and that it maintains and enhances its approach to first-class customer service. Despite the emirate’s reputation as a destination for luxury and opulence, Dubai has always offered great value for comfort and style, and that quality has been one of the most influential factors that continues to attract new and returning visitors; maintaining that will surely be crucial to keeping it as one of the top destinations.