fbpx
https://blog.euromonitor.com/wp-content/uploads/2018/05/iconEMICroppedSquare-150x150.png

By: Kinda Chebib

Dubai’s successful bid to host the World Expo 2020, announced in November 2013 in Paris, is expected to attract more than 25 million visitors to Dubai between October 2020 and April 2021. Euromonitor International estimates the economic impact of hosting the event to approach US$24 billion (AED88.2 billion). Around US$7 billion is expected to be spent on tourism-related infrastructure in Dubai.

Expo 2020 to Drive Business Tourism and MICE Beyond United Arab Emirate Borders

Expo 2020 will be a six-month event held at the Dubai Trade Centre in Jebel Ali between October 2020 and April 2021. It is expected to boost the meetings and conference industry in the United Arab Emirates (UAE) and wider GCC and generate strong business event opportunities in the region.

Given the strong marketing impact Expo 2010 had on Shanghai, the event in Dubai promises to outperform Chinese tourism results and impact the entire GCC’s meetings infrastructure and industry. As the neighbouring emirates are expected to participate to Expo 2020, governments and private investors are aiming to develop tourism opportunities in the all seven emirates. For example, the InterContinental Hotels Group development pipeline includes Ras al-Khaimah and Fujairah.

The impact on travel and tourism will be significant, with the Dubai Expo expecting to attract more than 25 million visitors, 70% of which will be incoming, the largest number of international visitors ever reached through an Expo. In fact, the Dubai authorities are targeting 20 million visitors a year up to 2020, which would be a tremendous economic boost for the UAE. However, in light of the anticipated success of World Expo 2020, Euromonitor International expects this figure to rise to 25 million a year. To meet the demands of tourists, Dubai expects to see its hotel inventory double from over 82,000 to around 164,000 hotel and hotel apartment rooms by 2020. Euromonitor International projects a 67% increase in UAE tourism receipts by 2018, with the MICE industry in prime position to contribute to this increase.

As a preview of what to expect, the Milan 2015 Expo is already anticipating around 140 participating countries for its event which takes place from 31 May to 1 October 2015 under the theme ”Feeding the Planet, Energy for Life”. Among the policies developed to fulfil Italy’s ambitious Agenda 2015, the country has established agreements with airlines such as Emirates, Thai Airways and Air Canada – with Alitalia and British Airways on the agenda for 2014 – to create special travel packages for students and the elderly. The state railway company Ferrovie dello Stato (FS) also plans to add 18 connections with Switzerland, aiming to develop an ”integrated system of offers”. The retailing, construction, hospitality, transportation and aviation industries are expected to benefit from the Dubai Expo. Huge infrastructure investment from both public and private sectors will be needed to meet the demands of the expected 25 million visitors.

Dubai Expo to Offer the World-Class Attractions

As the city prepares for Expo 2020, several attractions will be created. The city is planning a crocodile park on Dubai’s outskirts, a fish market and the creation of traditional souks in Deira. Also expected are a zoo and a safari park covering 119 hectares, which will take visitors on a ‘journey’ through Africa, Arabia and Asia.

In addition, a three-storey Dubai Wetland Centre will include a museum and visitor centre and will be built at the far end of Dubai Creek near the Ras Al Khor flamingo sanctuary. A miniature park – the world’s largest – is also expected to be built in Dubai, including such local icons as Burj Khalifa and Burj Al Arab. Moreover, a palm park with 5,000 species of palms will be built as part of an educational botanical area. The Mohammed bin Rashid Library, designed in the shape of a book, will join other attractions on the Creek. Lastly, a large artificial lake will be created in Al Barsha, alongside a boat and fishing equipment market.

Airlines Expected to Experience a Hike in Business

The airline industry is also expected to benefit. It has established itself as a vital contributor to the UAE’s economy, accounting for 15% of national GDP. In the run up to Expo 2020, Middle Eastern-based airlines are expected to experience a hike in business. No less than 70% of the 25 million predicted visitors to the Dubai Expo are expected to come from outside the UAE. Moreover, the UAE’s expansion in terms of airport capacity and facilities is expected to create strong growth opportunities for the global airline industry. Dubai is expected to invest more than US$8 billion in new infrastructure to host Expo 2020.

Hotels – Expanding the Mid-Market

In the run up to Expo 2020, the UAE’s Tourism Vision strategy will focus on diversifying the range of hotels available to incoming visitors. Dubai currently offers 82,000 hotel and hotel apartment rooms. The plan is to almost double the number of rooms between 2013 and 2020, with a particular emphasis on increasing the industry’s mid-market offering. A new government incentive will provide a concession to businesses setting up 3- or 4-star hotels. These businesses will be exempt from the 10% municipality fee applied to room rates for each night of occupancy. Around 25 hotels incorporating 6,250 rooms are due to open by the end of 2014, 50% of which are 3- or 4-star establishments.

Dubai Hotel Supply (Number of Rooms ‘000)

Source: Euromonitor International

Note: estimate for 2014-2016

For example, the InterContinental Hotels Group alone has a pipeline of eight hotels, accounting for no less than 2,000 rooms, including three InterContinental, two Crowne Plaza and three Staybridge Suites properties. The group already has 18 hotels under five brands in Dubai, Abu Dhabi and Sharjah. Dubai Marina will host the first InterContinental this year, along with a Crowne Plaza in 2016.

Sustainability after the Expo

Without a doubt, the domino effect on other industries such as retail will be highly valuable both in the short and long term. Some AED120 billion will be allocated to the construction of new developments in Dubai’s hotel and retail space, and will include the expansion of its airport, new hotels and hotel apartments and expansion of the metro and Jebel Ali Port Terminal 3.

However, the plan for Dubai after the event will be as important as the strategy leading up to it. Maximising use of this infrastructure over the long term will be a key aspect of economic and tourism sustainability. For example, it has been noted that a large proportion of the facilities developed for Shanghai’s 2010 Expo have since been barely used, despite 70 million tourists and noticeable growth in GDP. It is hoped that the aftermath for the Dubai Expo will be different, particularly as Dubai is an emirate still under development and expansion. Among the 277,000 jobs which are expected to be created by the event, 40% are estimated to be in the travel and tourism industry. Therefore, ensuring real estate projects are developed with a long-term vision so as to create a lasting tourism legacy for the UAE and the GCC region will be a critical issue for the UAE government.

About Our Research

Request a complimentary demonstration of our award-winning market research today.