Expo 2020 will give an encouragement to the economy during the construction phase of 2015-2020, improving Dubai’s international brand and additional boosting its position as a regional hub.
It was approximated that direct expenses of $7 billion on the event to amount to around one% of GDP each year between now and 2020. Meanwhile, other estimates suggest new prospects worth $36 billion developing in the area of infrastructure and facilities development projects over the next seven years.
It was stated that the disbursement is not very large, and in the context of the $670 billion of projects under way in the UAE, is not a significant stimulus.
Moreover, it stated that the competence of the impact of this expense on the local economy was likely to be limited and short-lived as the majority of contractors and workers preparing and managing the event would be foreign.
The occasion will be held during the peak tourism period between October 2020 and April 2021, and the authorities are expecting around 18 million foreign visitors.
At the recent rate of improvement, Dubai’s existing tourism infrastructure as well as transportation and hotels will be competent of accommodating this level of tourists, particularly as Abu Dhabi will provide additional capacity.
Effectively, the Expo should mean a bumper tourism season of close to 100% tenancy, but Dubai runs at extremely high tenancy levels during the peak season anyway, so taken as a whole impact should be rather less than the visitor numbers entail.
There are major breakdowns to 50 to 60% tenancy during summer month of July and August, but these are about immediately followed by robust rebounds back to the 80% territory for the rest of the year.
The pushing out of maturities in many occurrences is designed to give time for Dubai’s holding companies to see resurgence in their underlying asset values. Compensations are to be made using the proceeds of asset sales when this occurs.