UAE Raises Travel Expenses by 30%, Only Few Consider Cancelling Plans

The high demand for travel in the wake of the epidemic has not been dampened by the many causes that have contributed to a spike in travel costs. According to Visa's 2023 Global Travel Intentions Study, about 77% of UAE travelers have observed a rise in travel expenses.

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Despite this, only three percent are considering delaying or canceling their trips. According to Mohamed Bardastani, Visa's chief CEMEA economist, travel expenses, including airfares and accommodations, have risen significantly post-Covid and have remained high due to various global factors such as inflation, geopolitical tensions, and energy market constraints.

However, consumers' demand for travel remains robust, with many prioritizing travel experiences as a valuable aspect of their lives. While 77 percent of consumers are aware of the rise in travel costs, 45 percent stated that this increase is unlikely to affect their travel plans.

Raheesh Babu, COO of UAE-based online travel agency Musafir, noted that all aspects of travel costs have increased, including flight prices by 20–30 percent and hotel rates by 20–30 percent. Despite these hikes, travel demand has surged, especially for leisure purposes. The Visa survey revealed that travelers took an average of two international trips lasting around 10 days in the last 12 months, with India, Egypt, and Saudi Arabia being the top destinations. Relaxation, visiting family and friends, exploring new places, and seeking adventures were among the primary reasons for travel.

Travelers are increasingly opting for independent trips over packaged tours, as it offers greater flexibility and control over travel arrangements, especially in the face of last-minute changes. Premium experiences, such as bookings in 4- and 5-star hotels and first- or business-class travel, have seen an increase, indicating a willingness to invest in quality experiences despite cost increases.

Payment concerns remain prevalent among travelers, with worries about card acceptance, currency conversion costs, and ATM withdrawal fees. Digital wallets have become integral for spending during travel, with nearly 70 percent of respondents using the same card for both domestic and international expenses.

To offset travel costs, many travelers plan to vacation outside peak seasons, take children out of school to save on expenses, choose destinations with a lower cost of living, and avoid long-haul flights. These strategies aim to make travel more affordable and accessible amidst rising expenses.

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