On October 1st 2021 Dubai was finally able to welcome visitors to the Expo 2020, a wonder that had been delayed for close to 18 months due to the coronavirus pandemic.
It isn’t news that the virus wreaked havoc on the global economy, but this six-month fair – the largest global event since the pandemic – is meant to balance out the strain and offer a new boost to businesses across multiple sectors.
Did You Know That The United Arab Emirates Invested Nearly $7 Billion In Expo 2020?
With over 190 countries invited to a site that’s two times bigger than Monaco, the exhibition is expected to bring at least 25 million visits to help the economy recover from the losses.
According to the Financial Times, the economy shrunk by 11 percent in 2020, but the government might witness a 3.1 percent growth in 2021, which would increase to 3.4 percent in 2022 in various sectors, particularly transport and hospitality – most likely because of the Expo 2020. The Expo’s timing also coincides with the busiest business cycle in the UAE, which will further support the country’s growth and prosperity.
An Ernst & Young report also highlighted that the economy is expected to see a massive surge of around $33.4 billion as Dubai prepares to host visitors from different nationalities in the Expo 2020. The hospitality, construction, and event organisation sectors were expected to make sizable contributions in Dh11.4 billion, Dh27 billion, and Dh68.9 billion, respectively, to aid the event’s success.
But how is Dubai able to host such a gigantic event during a pandemic? Turns out, Dubai’s aggressive vaccination campaign for visitors and tourists has been responsible for its early recovery – one that has paved the path for a promising future.
Dubai’s Hospitality Sector is on the Rise
According to the STR forecast on the hospitality industry, hotel occupancy in Dubai is expected to see a 77 percent rise year-on-year, which includes an increase in revenue by 86 percent per every available room. The numbers are highly optimistic, almost like a ray of sunshine after the past difficult months.
The hotels near the Expo 2020 site are bound to benefit, but the impact will also be felt in other areas, such as Yas Island Abu Dhabi, that are expected to host visitors.
A Boost in the SME Landscape
As one of the largest global gatherings amidst the pandemic, Expo 2020 celebrates innovation and human resilience.
With more than 25 million visitors expected in a six-month span, reports suggest an increase in foreign direct investment – anywhere from $100 billion to $150 billion.
Major sectors to receive the investment include –
- Financial Services
- Real Estate
The increase in foreign investment in the UAE will fuel an economic boost in the region, positively affecting the business ecosystem and national economy. It also means small and medium enterprises will witness a boost in business and activity.
In addition, the enhanced economic activity will create more jobs, attracting talent from all across the globe. It will only pave a path for new and better business opportunities for entrepreneurs and SME owners.
The Private Sector Stands to Benefit
The IHS Markit PMI (or Purchasing Managers’ Index), representing economic indicators from surveys taken in the private sector firms, indicated positively towards future activities. In October, the PMI rose to 55.7, which is the highest recorded reading since mid-2019.
Even David Owen, an IHS Markit economist, mentioned that Expo 2020 is responsible for massive growth in the non-oil private sector.
He said, “the increases in both output and new business were sharp and the most marked since July 2019. In addition, the boost to sales led more companies to predict a rise in activity over the next 12 months, as optimism jumped to the highest level since the beginning of the pandemic.”
The Expo 2020 Has Good News for Insurance Companies
An economic impact study reported that Expo 2020 would offer a Dh100 billion investment bonanza, and it could easily be much higher. It is expected to increase opportunities, particularly in the insurance sector, as there will be a steep rise in commercial and housing development ventures.
As employment opportunities are expected to increase for expatriates and UAE nationals across all industries, the environment will be conducive for innovation. Furthermore, employment contracts will also lead to employee benefits insurances, along with additional insurable projects.
As real estate will continue to witness growth, engineering and construction-related insurance covers will be on the rise.
More than half a million homes need to be created, providing numerous economic opportunities for construction companies, developers, and other associated industries, including the insurance industry.
The insurance industry had to deal with several pay-outs in the last two years, but Expo 2020’s spirit of innovation will help set the scales in their favour.
A Bright Future Ahead
By the end, this massive exhibition will most likely generate a revenue of $35 billion, along with foreign investments of around $150 billion in various sectors, such as real estate, hospitality, and retail.
When the economy is thriving, it creates more room for business opportunities. Though Dubai has traditionally been an investment ground for start-ups and major corporations, the economy was hit hard due to the recent pandemic and halt in global travel.
With Expo 2020, Dubai is all set to show the world that it is on the road to recovery – one that will be the foundation for future economic growth.