Dubai Expo 2020 and its impact on the UAE’s economy and job market
With Dubai winning the bid to host Expo 2020, United Arab Emirates is all ready to set out on a path of rapid growth and development. The World Expo is an international event held every five years, which attracts millions of visitors from across the world, and brings along tremendous growth opportunities for local residents and economy.
As the whole UAE comes to term with the fact that Dubai will be hosting an event of such great scale and magnanimity, from drawing rooms to office board rooms, there are discussions about how World Expo 2020 is going to impact, not only the country but also the entire MENA region and its two billion inhabitants. Global consultancy firm Deloitte says that Dubai Expo 2020 will undoubtedly have its influence inside and beyond the borders of Dubai and UAE. The significance of the victory can be assumed from the fact that World Expo has never been held in the Middle East, Africa and South East Asia in the history of event. The six-month event will run from October 20, 2020 to April 10, 2021 at Dubai Trade Center and is expected to attract 25 million visitors.
Expo 2020: A unique opportunity
The World Expo 2020 is a once in a lifetime opportunity for those who will be lucky enough to witness this event. As per a survey conducted by strategic research company, Insight Discovery, majority of UAE residents expects Expo 2020 to positively impact their lives. The survey, which considered responses from 1000 residents, revealed that 95 % of the respondents are interested in the Expo, out of which 62% expressed strong interest.
When asked about the sectors which would benefit most from the Expo, mentions included advertising, media, financial services, real estate, retail and tourism or hospitality. While earlier only real estate and tourism appeared to be the most favored sectors by Expo 2020, the survey revealed that 40 percent of respondents believed financial sector will also be a leading beneficiary in the near future.
Nigel Sillitoe, CEO of Insight Discovery, had this to say about the Dubai Expo in relation to its effect on UAE’s residents and economy, “The survey confirms that there is huge interest in the event, but identifies a number of aspects that are of concern to the country’s residents. The survey examines why Dubai Expo 2020 is unlike previous World Expos, and why it is a high stake event for Dubai and the UAE.”
Dubai has already made its mark as an international business hub and Expo 2020 will help strengthen this image further.
Effects on the overall economy of UAE and beyond
According to estimates of Dubai World Trade Center, the economic impact of World Expo 2020 in the Middle East and North Africa (Mena) is valued at 17.7 billion Euros (Dh89.89 billion). Infrastructural costs for hosting the event are alone estimated at 6.45billion Euros. Bank of America predicts a jump of $23 billion in Dubai’s economy between now and 2020 while Arabia Monitor puts it even more optimistically, estimating total inflow of $60 billion from visitors to the event. Taking a cue from earlier versions of the World Expo, experts are expecting a boost in the previously predicted growth rate of 4 per cent in the economy in the run up to the event. Shanghai, which played host to the 2010 Expo experienced a GDP growth of 13 per cent in the five years leading up the event.
Hospitality sector the biggest gainer from Expo 2020
Expo 2020 is going to positively impact Dubai’s economy which will automatically benefit the real estate market. The segments that will most benefit are hospitality and logistics and for other segments like office and residential, the effects will be less visible and significant. Although most people think that 2020 is still a long way to go, construction has already started and people who are willing to invest with a long term approach can expect to reap the maximum benefits.
However, buyers have to remain cautious in their optimism as property is essentially a long-term asset and shouldn’t be purchased expecting to make a quick profit. This attitude led to the last property bubble burst, as too many people purchased real estate thinking of making a quick profit. The Expo 2020 can also lead to a situation where there is excess supply against the demand. Prices are expected to remain on the higher side in lieu of the speculations.
Realtors are advised to invest in the hotel apartment market, as Expo 2020 will bring in shortage of rooms, even with all the current hospitality projects. This investing concept is expected to bring a good return from rent and capital appreciation.
World Expo 2020 and its impact on UAE job market
If the $7billion Expo 2020 masterplan is implemented, there will be a massive increment in the number of job opportunities. Christopher Scott, Director of Investment and Development at Dubai World Trade Center and one of the masterminds behind the successful bid, said at an event, “In terms of employment, we forecast that the Expo will [create] 277,000 jobs, almost all of those will be permanent jobs, although 80,000 will be temporary, in addition to 30,000 volunteers.” 40 percent of these jobs will be created in travel and tourism sector. The surge in employment opportunities will also be partially due to multinationals opting to invest in Dubai for handling their operations in Middle East, giving it a more prominent place in their expansion plans post Expo 2020.