A change is about to come for Dubai.
The Great Recession that hit the world in Q3 of 2008 affected every country but its worst victim was Dubai. Business life of Dubai came to a pause as its economy primarily depends upon real estate, tourism, retail and finance.
The real estate prices started going down, tourisms suffered a 20% recline, the finance sector came into debts and the city’s construction work came to a halt that held 80% of the world’s cranes running. Job opportunities shut down for the expats forcing several foreigners to quit Dubai.
In Q1 of 2011, there was a slight rise from the recession but in Q2 of 2013, Dubai’s economy finally saw the lights as it burst back into progress and the stat lines started going up.
The new wave of enthusiasm was accompanied with a greater question that surfaced upon Dubai was who will get the obeisance for holding The Expo 2020, the third biggest global event.
As Dubai earns that honor, it is undergoing some mixed emotions.
There is a point of elation because Expo 2020 will open golden gates to many but it is also petrified due to the fact that mismanagement of the smallest level could leave hefty consequences.
The question now revolving around is the stand-out impact of Expo 2020 on Dubai.
World Expo puts a fast forward tab on the infrastructure of the host city. Shanghai, China that hosted Expo 2010 invested about $40 billion on its development which required 6 additional metro lines, roads, tunnels, bridges and bolt rail.
Dubai Expo 2020’s will put the same impact on its infrastructure. Sheikh Ahmed bin Saeed Al Maktoum, one of the top finance officials claims that at least $8 billion worth infrastructure will be required for the successful establishment of Expo 2020.
The host site of Expo 2020, Jebel Ali is a 480 hectare space which will require new roads, metro extension, buildings, hotels and facilities to accommodate tourists.
Standard Chartered report of Dubai will be directing its expenditure towards the growth of the city. The report added, “Capital expenditure will be directed to develop city-wide infrastructure that is not already in the pipeline and the Expo area and the immediate vicinity, such as the extension of the Dubai metro red line.”
An expected 25 million visitors in Dubai during the Expo 2020 is already increasing the economy charts of Dubai. There was a 4% increase in the stock market index of Emirates right after it won the bid on Expo 2020. For the first time since 2008, its index went beyond 3000 point level.
And this is just the start for Dubai.
With an increase in hotel business, transportations, communication, catering and facilities required in the making of Expo 2020, Dubai’s economy will experience a spike.
The construction works that were stopped due to recession years, will find their way to completion as the economy will have enough to recover completely out of the burst.
More flights into Dubai, more tourism, more retail and more transportation will lead to an increase in GDP, hence favoring towards the economic stability that Dubai has been starving for since 2008.
As per the Barclays report, over the next 3 years, Dubai’s GDP will experience a 6.4% growth and by 2020, there will be a 10.5% growth in the GDP.
3. Job Market:
Expo 2020 will bring a boom in the job market as it will need more hands for all the new construction projects, increased tourisms and more transportation facilities.
MEED reports, as of now, has anticipated 277,000 jobs opening in the making of Expo 2020, of which, 40% will belong in the tourism, travel and leisure sector. The construction sector will take up rest of the job percentage.
A new wave of excitement follows the employee sector as they hope for better pay or at least a bonus due on their way ahead.
“I believe Expo 2020 will bring significant changes in the market. With increased demand, it is highly possible that salaries will also be affected upwards,” says Konstantina Sakellariou, who is a Partner, Marketing & Operations Director at international recruitment firm Stanton Chase.
Even though there may be a salary hike for employees, it will come as a trickle-down effect and hence becomes a wait and watch situation.
4. Real Estate
Dubai is already considered a safe-haven because of its magnificent location and tourist attraction. With Expo 2020 coming home, Dubai will be splurged with tourist who would need accommodation. 71% of the 25 million visitors who are expected to visit Expo 2020 will be non-domestic visitors.
These numbers show that there will be many fold increase in the Real Estate business which is a good sign because even though there has been price rise since Q3 of 2011, it is still 45% below to the graphs it once hit in 2008.
Expo 2020 will not make an immediate impact on Real Estate. Even if it does, it will be almost invisible. The visible impacts will start showing by 2016 when most of the development works are scheduled for completion. The graphs start hiking up from 2018 as serious tourists, celebrities and event organizers will start booking apartments, buildings, office halls and event areas for Expo 2020.
“This is an opportunity for real estate developers to make a positive contribution to the future of Dubai,” says Khaled Al Malek, Group CEO of Dubai Properties Group.
The press media is now on its tip toes to fetch every minor details relating to Expo 2020. We can promise that the word “Expo 2020” will be the most occurring keyword in the many years to come.
The impacts on Media are equally great. Almost every website will have articles, news, reports and quotes relating to Expo 2020.
Where there is Expo, there are celebrities and this brings us to the fact that Dubai will now boom with more celebrities as they will be interested in either visiting it with their family or for their showbiz business.
There was an immediate effect on social media – Facebook, Twitter and Instagram on Thursday when a video of Crown Prince Sheikh Hamdan wearing an Expo 2020 t-shirt and waving the UAE flag on top of Burj Khalifa went viral.
Such media involvement in Expo 2020 will bring a new topic of discussion and a new spark of enthusiasm. Concert practices, dance performances and new endorsements are on their way.