Expo 2020 is all set to provide two lakhs seventy-seven thousand new jobs opportunities and will have a positive impact on the small and medium enterprises. It is predicted to expand the economy of the Emirates by an average of 6.4 per cent every year from 2014-2016, which is ultimately escalating to 10.5 per cent by 2020. The Expo 2020 is assumed to have twenty-five million visitors, seventeen million of which will be international, this will naturally create significant opportunities for the tourism and hospitality industries.
Dubai is making a massive new city which has an area of one thousand and eighty-two acre. This project itself has generated fifteen per cent of the City's new jobs. The number is assumed to double up as the City gets closer to 2020. Dubai Expo 2020 decides to focus on sustaining growth.
Dubai Expo 2020’s Focus
Expo 2020 is the most significant event the UAE has ever hosted and judging from the anticipated after-effects and extended awareness the event is about to bring, particularly in a city that has generally outpaced development predictions, it would come as no surprise to anyone that the effect will be intense.
Based on the projections concerning the Expo as well as tourism targets, the Government has estimated future necessities at about one lakh sixty thousand hotel rooms. Dubai Tourism website states that the supply as of April stands at one lakh eighteen thousand five hundred rooms. There are six thousand active Airbnb listing on their website approximately.
A further twenty-five thousand hotel or hotel apartment units are expected to deliver by 2020. It is vital to note that Dubai isn't just building solely for the Expo. The City is evolving to keep up with its growth. The Expo is expected to be viewed as a significant stimulus in attaining long term growth aspirations.
Once you factor in the escalating number of tourists and expanding the population, which is expected to reach five million people by 2027, it becomes evident. The total demand for real estate would rise. The construction sector has sustainably been one of the most extensive contributions to Dubai's GDP, accounting for Dh24.6 billion or 6.3 per cent in 2017.
The Government has announced that the GDP will rise from 2.1 per cent this year to 3.8 per cent in 2020, and also by a drop to 2.8 per cent in 2021. This expands because of the influx of visitors during the Expo event and the direct, indirect and persuades impact that this will bring to the GDP.
The specific time the GDP dropped compared to the past year was in 2009 as a significant result of a majorly global crisis. The growth rate may abate following the Expo year. It is expected to continue to expand.
Impact of Expo 2020 on Different Industries
The other question is one the impact the event will have on different industries. The spike in the anticipated number of visitors during the Expo year will unavoidable have a knock-on effect on other sectors. As per an economic impact assessment conducted by consultancy firm EY, the event will grant 1.5 per cent to the GDP of Dubai.
Local banks will be involved in different real estate related projects. They often provide asset-backed finance on operational assets, which is based on their income-producing potential but are expanding and also involved in construction finance.
Beyond the Expo is a vastly debated and speculated subject. All essential indicators including population, GDP, tourism, a geographical footprint, which indicated a growth trend.
The fact is recognized that major events like Expo, Fifa World Cup, Olympics direct to massive amounts of investment which is neglected and abandoned in the upcoming years. A legacy programme has been created which will ensure that approximately eighty per cent of the Expo's structure and the building will be incorporated into a new business zoned District 2020 — with major corporations such as Accenture Siemens said to be confirmed as significant tenants.
Another major exhibition centre will be generated at this site to host other significant events. There are remaining risk debts repayments owed by government-related entities, which is estimated at sixty billion dollars. At about half of which is due by 2021.
The real estate sector's contribution to the GDP is assumed to remain constant. The economy and the real estate market especially move in a cycle. Several factors have generated the slow down over the last three to four years, which includes a stronger dollar, lowering oil prices, political headwinds, regional instability, negative sentiment, etc.
It is necessary for one not always compares to the peak of the cycle. To compare job creation, property prices, license issuances, GDP growth, property sales, etc. to its highest point is bound to generate negative sentiment. If evaluating long-term averages and absolute figures, the relatively modest growth that is predicted in the years to come will begin appearing to be a new standard and more importantly, will be more achievable.
Naturally, the Government have a vital role to play. Reforms are an ongoing theme in this market. The various government initiatives during the early years in the 1970s the present day have been impactful. Some recent and current reforms to encourage the market and make it more attractive for businesses and people to relocate include an aim to make the City easier at cost, enable the issuance of long-term visas, company licenses the creation of various incubators to estimate start-ups and knowledge economy. As well as softer initiatives such as creating an environment of tolerance where all nationalities are welcome to conduct business and live in unity.
Like the city, the country, the region and the construction sector are continuously evolving, and it is essential to keep pace with every change. Dubai has regionally been the most progressive and active City in this regard.
In forward, the existing relationship between the private and public sector may be intensified to create and exchange ideas, implement best practices, escalate transparency and embrace technological disruption to ensure greater relevance and constant progress.
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