The signs highlighting the short-term struggles Dubai’s tourism industry faces
Three things happened last week that highlighted the plight Dubai’s future tourism industry is facing, at least in the short-term.
On Monday Dubai International Airport (DXB) released its annual figures and revealed that a total of 25.9 million customers travelled through the airport in 2020, a decrease of 70 percent compared to 2019.
Also on Monday, Emirates Group held a media roundtable with the company’s COO, and a small group of journalists. The airline confirmed to Al Arabiya the COO, Adel al-Redha revealed to those present that it is operating to 80 percent of its destinations with 30 percent flights numbers compared to pre-COVID. This concerned flight schedule, and not the utilization of aircraft.
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An international study released by IMA (Institute of Management Accountants) on Tuesday highlighted the global impact of the COVID-19 pandemic on the finance function of organizations worldwide, with a specific focus on staffing, salaries and skills. Hardest hit were professionals in the tourism, travel and hospitality sectors, the findings indicated. Thirteen percent of those polled were furloughed, and 58 percent received pay cuts.
For Dubai's tourism, the effect of lockdown, exacerbated by a dependence on long-haul travel, will see a slow recovery. In such a scenario, international arrivals to Dubai could total just 7.2 million in 2021 compared to 16.7 million in 2019, prior to the crisis, according to Oxford Economics, Chief Economist, Scott Livermore. Based on overnight stays in Dubai, these figures don’t include those in transit through the airport.
Empty beaches in Dubai. (File photo: Reuters)
DXB’s footfall showed a positive second half of the year, with December exceeding industry expectations at 2.19 million customers, the airport’s released figures showed.
On June 23, 2020, UAE airspace was officially re-opened and travel to Dubai for tourism was permitted from July 7, 2020. These regulatory changes had a positive impact on flight movements and significantly increased passenger figures, through until the end of the year. The average customer traffic figures in Q3 and Q4 peaked at 1.3 million.
The easing of international travel restrictions saw a rebound in the tourist sector at the end 2020 with hotel occupancy rising strongly, Livermore said.
“Travel and tourism is an important pillar of the recovery for Dubai, accounting for over 30 percent of GDP. The stimulus given to the Dubai economy from the rise in visitor numbers at the end of last year was significant, and explains the authority’s desire to keep the city open to tourists,” he added.
The second wave of COVID-19 could hamper the recovery in Dubai tourism this year, and could be much weaker than anticipated, he projected.
“New variants suggest that there is a risk that tighter lockdown conditions persist around the world for longer in 2021,” he said. “Return to normalcy, tourism's recuperation, and for the economy as a whole, the road will be long and winding,” he explained.
Tourism Economics expects international visitor numbers to more than double to 10.5 million in 2021, but expectations are based on a vaccine rollout that sees restrictions globally being eased through the first half of 2021, reaching a meaningful and sustained easing of lockdown in the second half of this year, Livermore said.
The crew of a competing boat in the annual long-distance 60ft Dubai Traditional Dhow Sailing Race, work on the sail across from Burj Al Arab. (File photo: AFP)
If the recovery in international arrivals is more drawn out than expected, the increased role of domestic tourism will aid Dubai’s tourism's resilience. A marked uptick in staycationers has helped fill the void left by limited international travel, he suggested.
Livermore said that while feeling concern about the short-term prospects for Dubai’s tourism industry, when a recovery does take hold, there are plenty of reasons why it should be strong.
“A survey by IATA suggests that 80 percent of travellers will return to travel within six months of virus containment. And the surge in travel to Dubai at the end of 2020 illustrates the willingness of travellers to return. This also bodes well for the success of Expo, which creates an opportunity for a faster recovery,” he said.
The region’s political developments could be beneficial, with the UAE’s rapprochement with Qatar, and the Abraham Accord with Israel, and this should stimulate visitor numbers, he said.
“Prior to the Qatar issues, 1.3 percent of total visitors to the UAE - or around 242,000 - came from Qatar,” Livermore noted. “Based on Israeli visitors to countries of a similar size and distance to the UAE, such as Greece and Austria, the Abraham Accord could stimulate more than 250,000 extra visitors once travel conditions normalize,” he predicted.
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