Archive for November, 2013
Courtesy of Arabian Business – full story here
Aviation and transport According to the organiser’s forecasts, over 17.5 million people will flock from around the world to visit Expo 2020 in Dubai, or up to 300,000 every day. This is not to mention exhibitors from more than 180 nations. Preparations are already well under way for this, with aviation authorities busy expanding and upgrading existing air infrastructure. DIA is currently undergoing $7.8bn of renovation which will eventually allow the facility to cope with 90 million passengers per year. To add to its existing hub, Dubai is also placing the finishing touches on the new Al Maktoum International Airport at Dubai World Central, just a short journey from the proposed Expo 2020 site in Jebel Ali. With an eventual capacity of 160 million passengers per year, the airport will easily surpass London Heathrow to become the largest in the world.
Tourism and hospitality Dubai welcomed more than 10 million international visitors for the first time during 2012, according to official estimates, representing an increase of over 9 percent compared to the year before. Not only this, but Dubai’s hotels reaped a bumper AED18.82bn ($5.12bn) in revenues, a 17.9 percent year-on-year hike. This is just the start of the mirate’s tourism push, however, as by the time the Expo is held in 2020 Dubai means to have doubled its number of visitors to 20 million annually. Given that the Expo would be held over six-month period between October and April, one analyst believes that the positive impact on the emirate’s hospitality sector will be enormous, and even surpass that of the World Cup 2022 in Qatar. Figures from Dubai authorities estimate that winning the rights to host Expo 2020 will create a whopping 111,000 new jobs in the hotel and restaurant sectors. Much of this work will be created by the new hospitality projects due to come online between now and 2020, including the more than 100 properties planned as part of the Mohammed Bin Rashid City megaproject.
Real estate and construction Dubai’s real estate market has rallied in 2013 on the back of strong economic fundamentals and a rising population. Of the 300,000 or so jobs that are expected to be created by a successful Expo bid, Standard Chartered forecast that approximately 90 percent will come between 2018 and 2021. The lender predicted that many of these are anticipated to be turned into permanent positions, creating further demands on the emirate’s housing supply and further pushing up prices.
The Expo site itself, to be located in Jebel Ali, will sprawl across 1.2 million sq m and house around 180 purpose built pavilions. The masterplan for the site will not receive approval until the end of 2015, with work expected to commence shortly afterwards with completion for 2019. According to a research note from Bank of America Merrill Lynch, it is anticipated that the Dubai government will spend about $6.8bn on building works to improve infrastructure in the run-up to 2020. Overall, about 80,000 new jobs in the construction sector will be created, it is estimated.
Banking and equities There is precedent for local bourses rising sharply in the weeks before and after a country is awarded the rights to host a major event. In 2010, Qatar’s stock market increased 16 percent in the months prior to its winning World Cup 2022 bid, with the exchange rising a further 14 percent in the following weeks.
Research by PKF based on data from previous Expo events shows that an additional 20 percent of annual international guest arrivals would come to Dubai over the six months period attracted by World Expo 2020. PKF also predicts that hotels during the period will operate at more than 90 percent capacity, putting pressure on room inventory. However, a spill-over effect would benefit hospitality sectors in neighbouring emirates such as Abu Dhabi, PKF said.
A key pillar in Dubai’s Expo 2020 bid is the site in Jebel Ali itself, which will encompass 438 hectares and will be developed with a raft of new hospitality and tourism amenities. One question that the emirate must address is the legacy of this infrastructure, namely what it will be used for once the event has closed. Analyst Wilkinson says that this is one area that Dubai has a track record of success in. “Whatever is built for Expo 2020 must have a purpose beyond the event, and Dubai has proven itself well able to create new projects and districts that prove sustainable — just look at Al Barsha, which has grown up around the Mall of the Emirates since 2005, and is now a buoyant and thriving community,” he believes.