Dubai's travel and hospitality sector prepares for a bounce back

The easing of travel restrictions will provide a much needed boost for Dubai – and the UAE’s – economy

After months of uncertainty and anticipation, Dubai will finally swing open its doors to the world again, a move that will provide a much-needed boost to the emirate’s aviation and hospitality sectors.

In an announcement last week, Dubai’s Supreme Committee of Crisis and Disaster Management revealed that residents stranded abroad would be allowed to travel from June 22, with citizens and residents allowed to travel overseas from the 23rd. Under the directives, visitors and tourists will also be allowed to travel to Dubai from July 7.

For Emirates – and the rest of the region’s airlines – the news couldn’t come at a better time. Although the final financial toll of the Covid-19 pandemic on the sector has yet to be determined, early reports have been grim. According to statistics from the International Air Transport Association (IATA), Middle East airlines posted a 97.3 percent traffic contraction for April, compared to a 50.3 percent in March.

According to the data, the capacity of Middle Eastern airlines collapsed 92.3 percent and load factor dropped down 27.9 percent, down 52.9 percentage points compared to the same time period a year ago.

In the case of Emirates, the relaxation will provide a much needed boost, with the company reportedly making over 1,000 members of staff – cabin crew, pilots and support staff – redundant earlier this month.

“The next few weeks will be a big test for the whole aviation industry in many ways,” said Emirates chairman Sheikh Ahmed Bin Saeed Al Maktoum. “The moves comes at a time when the world is preparing to resume economic activities across sectors…travel and tourism are among the key industries at the forefront of spurring global economic recovery.

“Our airports and national carriers are resuming larger scale operations by stringently implementing globally benchmarked precautionary and preventative measures that protect the health and safety of travellers,” he added.

Tourism ready to bounce back

Similarly, Dubai and the wider UAE’s hospitality sector is in dire need of a boost. Statistics from market research firm STR show that hotel occupancy rates in the UAE were recorded at 35.6 percent in May, a whopping 30.7 percent fall compared to the same period in 2019. Meanwhile, average daily room rate (ADR) declined 35 percent to just $70.8, while revenue per available room (RevPAR) fell 54.9 percent to $25.2.

The easing of travel restrictions to Dubai is likely to accelerate the recovery that many industry insiders had already predicted would take place – creating ample opportunity for potentially rewarding investments in the sector.

“It is a time for opportunity and that is something investors will always look for. Investors are out there, and they will be in the future,” said former Jumeirah Group CEO Gerald Lawless.

The opening of Dubai to visitors from abroad will also have the added impact of allowing businesses and industries to relocate personnel to the emirate as required, particularly in the aftermath of the pandemic when recovery is more evident.

“Dubai has a lot of multinational companies who have established their regional headquarters here,” explained Issam Kazim, CEO of Dubai Corporation for Tourism and Commerce Marketing. “Dubai has a lot to offer these businesses in terms of systems and the different free zones, giving companies the opportunity to be able to practice their business in a way that is comfortable to them. The lifestyle of Dubai makes it very easy for people to relocate. It simply becomes an offer too good to refuse.”

Dubai goes on the offensive

As industry analysts have pointed out, the recovery of Dubai’s travel and hospitality industries are dependent on consumer confidence being high enough for visitors to return.

To this end, Dubai authorities have ramped up promotional activities – such as the #WeWillSeeYouSoon campaign – to provide up-to-date information on the situation in Dubai. Additionally, Helal Saeed Almarri, director general of Dubai Tourism, said this campaign has also involved being in constant communication with more than 3,000 partners worldwide to prepare for an eventual influx of visitors to the emirate.

“With travel behaviours remaining fluid and travellers set to become even more discerning and prudent in their choices, we welcome the commitment shown by our partners to work together to help prepare the ground for a meaningful tourism restart so that the industry is well positioned to capture growth when the situation improves,” he said.

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