As 2021 started with barely a pop elsewhere, the UAE Mall Airport was swarmed with tourists from Britain, France and Russia flocking to what has recently become the most open city in the world, where visitors can enjoy restaurants, bars and even socially distanced raves.
After a difficult lockdown, the city began to gradually open up its economy in May. With the UAE’s rollout of a rapid vaccination program, bookings for city hotels are booming and a dying real estate market is reborn.
“Dubai has removed the barriers – people see a relatively safe place and are therefore willing to travel,” said Simon Casson, president of hotel operations in Europe, Middle East and Africa for the Four Seasons Group. “There are few hotels in the world today that are benefiting from the level of demand at Four Seasons Dubai.
Since November, occupancy and rates at its two Dubai hotels have increased, reaching over 90% on the beach in December, compared to single-digit lows during the summer, he said. . In the first week of December, occupancy in Dubai hit 66%, according to data provider STR.
Dubai, hit harder than the wealthier UAE capital Abu Dhabi, has adopted easier entry requirements to boost tourism. Dubai is forcing some visitors to present negative Covid-19 tests on check-in and take another on arrival, although Brits and Germans, like other Gulf nationals, only need to take a PCR test at Dubai airport.
A new, more infectious variant of the virus is present in the UAE and cases have increased since the new year. So far, authorities have only reminded people to follow social distancing protocols.
The two-month revival of tourism, which together with the real estate sector accounts for about a third of the economy, is part of the emirate’s resurgence story, as many foreigners it relies on have left due of the pandemic. No less than 10% of the 10 million inhabitants, the vast majority of whom are expatriates, have fled the country, according to Western officials.
Since then, the UAE, which has recorded around 700 deaths from the coronavirus, has led the way with its vaccination campaign. Dubai this month rolled out its BioNTech / Pfizer vaccination program, which aims to vaccinate 70% of the population by 2021, building on the UAE’s campaign using China’s Sinopharm vaccine. The United Arab Emirates are now second behind Israel in the global vaccination race, at 9 doses per 100 people, and are planning to outdo their new ally.
“This is the only place I know of where you can really live your normal life – they got it all – there are masks everywhere,” said John, a banker from New York, who has just moved his family to Dubai. .
As years of real estate overproduction continue to weigh on a market that is 40% down from its 2014 peak, some neighborhoods are now starting to rebound.
Ben Kirkland, a commodities trader who agreed to buy a four bedroom house on the man-made Palm Jumeirah before the virus hit, believed he made a terrible mistake when he got stuck in the abroad during the pandemic.
But he and his wife went ahead with the purchase and the value has since increased by 20%. “It was a good decision to buy as close to the bottom of the market as possible.”
Apart from tourism and real estate, many sectors are still suffering. In November, managers reported sluggish activity and the weakest new business growth in five months, with production “falling sharply”, according to the IHS Markit Purchasing Managers Index, which examines the business climate. As jobs continue to be lost, the rate of destruction has reached its lowest level since the start of the pandemic.
To spur recovery, the government has introduced a series of reforms to improve quality of life and attract foreign direct investment, including removing the requirement for an Emirati to own 51% of a business.
While concerns remain about the emirate’s overall debt burden, Hasnain Malik, a Dubai-based analyst at emerging markets research firm Tellimer, said these would be alleviated by low interest rates. global interest, the resumption of tourism activity and the implicit support of Abu Dhabi, which bailed it out. previously.
“Debt is an Achilles heel, not a deciding factor,” he said. “If this continues, exposure could become a driver, with investors seeking exposure to highly tourism oriented economies.
For now, the party continues. The city’s New Year’s celebrations were topped off with the traditional sound, light and fireworks show around Burj Khalifa, the world’s tallest building, but with yellow “#staysafe” stickers marking the physical distance.
The highlight of the show featured a slogan coined by Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and de facto ruler of the United Arab Emirates, assuring audiences of the country’s ability to deal with the coronavirus: ‘Don’t worry not.