A $23 billion boost to the economy by Expo 2020 has been predicted by the Global Emerging Markets report by Bank of America Merrill Lynch. As Dubai celebrates its Expo triumph, Gulf Business takes a look at the diverse areas which are expected to experience growth and development across the cityscape in the lead up to the 2020 event.
Some of the world’s most powerful luxury brands fill the 95 malls, markets and souks in Dubai and during the city’s short history it has become internationally recognised for its retail market.
“The retail sector in Dubai has always been strong, underlying the nation’s growth,” said Majid Al Ghurair, chairman of the Dubai Shopping Malls Group.
“As Dubai increasingly becomes recognised as a centre of commerce for the Southern Hemisphere, the Expo could potentially boost this reputation with exponential growth of up to four times [the current retail sector],” Ghurair said.
Another highly anticipated key-gainer from the Expo 2020 is the banking sector. The event, which is the third largest in the world behind the Olympics and the Soccer World Cup, is expected to bring an increased confidence in Dubai’s financial centre, further boosting the reputation of the UAE as credible economic force on the world stage.
According to a recent report by Bank of America Merrill Lynch Expo will improve the GDP of the UAE.
“We estimate a successful Expo 2020 bid would provide a modest lift to GDP growth, leading up to the period, and a more material one around the event itself. It should lead the award activity pipeline to show strong improvement.”
Middle East airlines are expected to experience a hike in business during the run up to 2020, as 70 per cent of the 25 million predicted visitors to Expo are expected to travel from outside of the UAE.
However, according to Helel Almarri, Director General of Dubai’s Department of Tourism and Commerce Marketing (DTCM), the planned aviation development between 2013 – 2020 fits within long-term growth plans for Dubai’s tourism industry, irrespective of the Expo 2020.
“The tourism vision for 2020 includes the target figure of welcoming 20 million visitors per year to Dubai by 2020. Clearly hosting Expo [will] help us achieve that ambitious target, but our plans are not reliant on it,” Almarri said.
In the run up to Expo 2020, there are plans in place to diversify the range of hotels available to people visiting Dubai. Playing a key part in this is a new government incentive that will give a concession to businesses setting up a 3 or 4 star hotel. These business owners will be exempt from the ten per cent municipality fee which is currently applied onto room rates for each night of occupancy.
“Part of the strategy to deliver our Tourism Vision for 2020 is to continue to grow our hotel offering. We intend to almost double the number of rooms between 2013 and 2020 and part of this is increasing the mid-market offering. Approximately 25 hotels with a total of 6,250 rooms are due to open by the end of 2014, 50 per cent of which are 3 and 4 star and hotel apartments so you can already see that there is growth in this range” said HE Helal Almarri.
Some business leaders however may look to high land prices as an obstacle in achieving monetary value from expanding into the mid-to-lower hotel market for the Expo event.
The effect on the job market has been one of the most talked about factors surrounding Expo 2020, with the Department of Tourism and Commerce Marketing predicting 275,000 jobs being created between 2013 and 2021. An impressive figure, the government has said that the growth within this figure will be felt most across construction, engineering, transportation, retail, hospitality and aviation.
Konstantina Sakellariou, a partner at recruitment firm Stanton and Chase has emphasised the need for sustainable investment in the job market. “ A number of sectors will benefit. [Expo] will boost demand for human talent, while it will also attract additional investments, funds and residents, which will increase consumption, having a positive impact in additional sectors of the economy.
“However, one needs to be cautious in order to avoid opportunistic reactions in the human talent market, which were experienced in the past. This will be the biggest challenge the overall human talent sector will have to face, and we hope that the experiences of the past will allow both candidates and companies to be wiser and more professional.”
In a recent World Bank report, Doing Good Business 2014 DEWA (Dubai Electricity and Water Authority) was ranked first across the Middle East, and fourth in the world for adept electrical output. The main electricity and water supply for Expo 2020, the event is likely to further promote the international credibility of Dewa.
This is something which is welcomed by the company’s CEO Saeed Mohammed Al Tayer, who has said Dewa’s electrical and water supply which maintains a safe excess of the amenities to current demand will provide the basic formula for reliable expansion for 2020.
Al Tayer has repeatedly voiced his support of Dubai’s Expo campaign over recent months and is confident that the company’s plans for expansion for the 2020 event will be successful.
The CEO has also emphasised that DEWA will keep reliability and availability at the core of the company’s expansion. “We will spare no efforts to achieve Dubai’s goal of development and support preparations for hosting Expo 2020,” said Saeed Mohammed Al Tayer.
In true Dubai style the planned 438-hectare site for Expo 2020 is set to be the largest ever created for a World Expo.
The construction industry as a whole is expected to gain from the event, with 30 per cent of the jobs created by Expo 2020 expected to be in construction. The government has also announced that all new and existing construction projects are going to be fast-tracked to be ready for 2020. These projects will be distributed across hospitality, transport and amusement facilities.
A reinvigorated confidence in the construction industry is also set to take hold with projects such as The World being fast-tracked to be ready in time for the Expo.
An estimated Dhs5 billion is to be invested in transport to and from the Expo event. Central to this expansion will be the new Dubai ExpoRiders, which will include 750 zero emissions buses that will cover the entire city scape through 35 stations.
Expansion to the Dubai metro will also be fast tracked for the 2020 event, with the current Red metro line being expanded to the event site. Levels of the use of public transport are also expected to increase, with a zero-private cars policy being applied to the event, in order to encourage the support of Expo’s green living aim.
Sustainability is one of the three core themes of Expo 2020 and is set to play a key part in the infrastructure of the Dubai event site. Site planners are aiming for the Expo site to generate at least 50 per cent of the energy the site will use, including the latest photovoltaic technology whereby electrical currents will be produced using solar energy. In line with Dubai’s Expo transport policy the event will also be a zero emissions site.
Although the UAE is currently one of the world’s biggest carbon emitters, the emphasis that will be placed on sustainability over the next seven years in the lead up to the 2020 event will no doubt help to promote this fundamental issue with the UAE and help communicate the need for sustainable lifestyle on a global platform at the event in 2020.
After the Expo event, the site itself is to be recycled and used as a research centre and university, based around the study of the aims related to Expo, including sustainability. This development in particular could help many generations benefit in the quest for sustainability
Perhaps the biggest person set to gain from Expo 2020 is ‘you’, the resident of Dubai. With a focus on sustainable development, transport infrastructure and a boost to the local financial market, the long-term benefits of hosting Expo are perhaps to be felt, undoubtedly most by those living in the city.
According to Bank of America Merrill Lynch the real estate sector will experience a positive momentum over the remainder of the year, reacting positively to the Expo win. “ [Expo will] be a great accolade for the emirate, opening a new window to the world to promote Dubai’s status as a global city, and one with world-class infrastructure. Importantly, it would also help to drive demand in the emirate’s property sector, helping to reach new and untapped markets and ultimately increasing Dubai’s global reach.”
CBRE global research consultancy has also confirmed that Expo is expected to boost the residential market in Dubai.
Majid Al Ghurair added: “Dubai is considered as a safe haven and hence hosting the World Expo 2020 will not only have a positive impact during the event but also after the event. The whole region will be able to take advantage of the economic upgrade, improved employment and enhanced regional integration. It will also give an opportunity to enhance the Emirate’s repositioning of the Middle East as a centre of innovation.”