5 Reasons Why Dubai Is Set To Win From Expo 2020
featured blog
5 Reasons Why Dubai Is Set To Win From Expo 2020
—
By Naam Chakravorty, Gulf Region Analyst, Botho Emerging Markets Group
July 16, 2021
Mega-events can stimulate economic growth and improve international cooperation, but organizers often prioritize short-term rewards over long-term gains. From the summer Olympics to the Fifa World Cup, these events are typically billed as the prelude to a gold rush of tourists, big infrastructure investments, and a boon to GDP. The same holds for the World Expo, now 170 years in existence. However, the path to even reach break-even—let alone profit—is complicated, as the cost of achieving these goals frequently surpasses the benefits.
As Expo 2020 approaches, the UAE government appears determined to avoid the missteps that other nations have made when hosting mega-events. Since winning the Expo bid in 2013, the UAE government has doubled down on investments in areas like transportation, logistics, marketing, and tourism to make the Middle East’s first World Expo a success—and a sustainable one at that. Dubai is expected to enhance its economic growth as a result of its meticulous preparations for Expo 2021, striking a balance between short-term gains and long-term impact on the country's diversification strategy. Here are five reasons why:
1. Expo 2020 Will Turbo-drive the Growth of Dubai's Booming Hospitality and Tourism Industry
In the last two decades, the city has successfully hosted major events including the Dubai International Film Festival, Dubai World Cup for Equestrian Sports, and Dubai Shopping Festival. While these events have prepared Dubai to accommodate roughly 3 million visitors, the country's hospitality and tourism industry will need to prepare substantially for the Expo, which is estimated to draw 25 million people. Since 2018, the UAE’s hospitality sector has observed a year-on-year demand of 7.4 percent. To keep up with the demand, Dubai increased the city’s capacity from 94,000 hotel rooms in 2009 to 187,000 in 2021. The UAE's hospitality sector is predicted to reach $7.6 billion by 2022, with a five-year CAGR of 8.5 percent between 2017 and 2022. Expo 2020, regular tourism, and new models like "workcations" will all be major draws for visitor traffic, and Dubai is ideally suited to that model, as evidenced by offerings like fast internet in every corner and affordable rental options such as co-living spaces and monthly apartments with full amenities.
2. Policymakers Have Adopted Lessons Learned from Previous Expos
The UAE has used lessons learned from previous mega-events, both positive and negative, to prepare for this influx. In 2010, for example, the Shanghai Expo introduced urban best practices such as ecological resource management, public participation in planning decisions, and advocated for future development focused on environmental sustainability and efficiency. In contrast, the 2015 Milan Expo was heavily criticized for the unsustainable construction and organization of the event, sparking environmentalist protests days before the event. Moreover, the event's theme, "Feeding the Planet, Energy for Life," caused outrage because of its narrow focus on agricultural product shortages and distribution. To avoid such missteps, Dubai has already put in place a legacy strategy to ensure that the Expo 2020 site and associated infrastructure do not become obsolete. Dubai's expo plan also focuses on long-term economic benefits. The city has followed Shanghai's approach by building sustainable infrastructure and avoiding the event theme flaws made by the Milan expo such as celebrating healthy eating but with McDonald's and Coca Cola as major sponsors. Furthermore, in keeping with Expo 2020’s theme of “Connecting Minds, Creating the Future,” the country has announced several regulations and practices relating to artificial intelligence and blockchain technology.
3. Dubai Is Set to Benefit from the Post-Pandemic Boom
Although COVID-19 continues to cripple many economies, Dubai’s events and exhibition sector has remained resilient and attracted millions of visitors. The Dubai World Trade Centre (DWTC), the city's largest event and exhibition hub, kicked off its events season last year with the AI Everything Summer Conference, an annual artificial intelligence summit for governments, and businesses. While the event was small in scale with 4500 visitors, it received a 94 percent rating for visitor safety and is a positive testament to Dubai’s ability to host a major event while practicing COVID-19 compliance and safety measures. This success led to Dubai hosting the December 2020 edition of GITEX, the annual electronics trade fair, which attracted 50,000 people from 113 countries. Furthermore, the UAE has one of the highest covid vaccination rates in the world, with 122.39 doses per 100 persons and more than 62 percent of the population inoculated. Dubai has effectively implemented a gradual economic reopening that prioritized safety while minimizing the pandemic's effects, putting them in a strong position to lead the post-pandemic recovery. The city is well-prepared to welcome millions of people securely during Expo 2020 as a vibrant tourist destination and a global center for the events and exhibitions industry. Expo 2020 and its legacy will unite a worldwide audience, driving economic growth not just in the UAE but throughout the Middle East, and so the city has also strategically developed certain business and policy practices to leverage the same.
4. The Expo Strategy Is Aligned with Long Term National Priorities
In developing the long-term strategy for Expo 2020, Dubai has focused on three key goals: attracting a worldwide audience, developing sustainable infrastructure, and developing policies and a business climate that would bring value to the economy. To foster a more favorable business environment, Dubai is leveraging Expo 2020 as a launchpad for its efforts to transform into a smart city by championing technology including but not limited to paperless government services, one-stop application for payments for utilities, transportation, health, and business, and a city-wide data initiative guiding the opening and sharing of city data across the public and private sector. This strategy is in line with the UAE's goal of making Dubai the happiest city in the world, as well as delivering and promoting an efficient, safe, and memorable city experience for inhabitants and visitors, all while empowering strategic collaborations with the public and private sectors. To achieve these goals, Dubai has invested heavily in the city and infrastructure planning: for instance, US$4 billion has been earmarked for road projects alone, and a new “smart” metro line was constructed to connect the Expo site with major transport hubs across the city. As a result of this urban renewal, over a quarter-million jobs are predicted to be created in various industries, including aviation, finance, hospitality, retail, real estate, technology, and tourism. Finally, as part of this program, Dubai aims to be the first city in the world to be powered by blockchain and artificial intelligence, based on three strategic pillars: government efficiency, industry creation, and global leadership. Smart city initiatives are already yielding results, with four out of five UAE citizens believing they will benefit in the long run.
5. Dubai’s Strategic Approach to Expo Construction
Unlike the 2018 FIFA World Cup in Russia, where 90 percent of the initial investment that was intended to establish infrastructure for the long-term needs of cities and communities was instead spent on unsustainable event-specific infrastructure, Dubai has been deliberate in its Expo site construction. 85 percent of the event site will be retained after the Expo has concluded and renamed District 2020 as a permanent residential, cultural, and business hub. This approach has largely focused on improving the project’s sustainability by integrating energy, water, and waste management solutions. Renewable energy provides 50 percent of the site's needs. If all goes according to plan, District 2020 will house 90,000 people in residential areas, with more than 2.3 million square meters of floor space accessible for development by third parties. The project's size has sparked enthusiasm for the Expo 2020 legacy period, which is expected to create $16.9 billion in gross value added between May 2021 and December 2031.
Through Expo 2020, the UAE can broaden its reputation as an oil and tourism-driven economy and flex its strength in rapidly growing, emerging sectors like construction, logistics, retail, hospitality, and business services. Over the next five years, improvements in sustainability, technology, and infrastructure will boost Dubai's economic growth by 3.8 to 4.5 percent. And between 2013, the year that the UAE won its Expo bid, until 2031, the predicted economic benefit for the UAE is estimated to be $33 billion—with more than 900,000 new jobs projected. Expo 2020 is leaving a lasting legacy by establishing a new urban model for the city and refocusing attention on economic development through the creation of jobs and investment.
Naam Chakravorty is the Gulf Region Analyst at Botho Emerging Markets Group.
For more information, contact Naam here.