Plans to hold the 2022 by Expo present advantages and disadvantages, but the benefits appear to significantly outweigh the drawbacks. The following list highlights the imbalance that favors opportunities to the UAE economy:
• expansion and opportunities for Dubai as a global business hub
• transformation of the ancient role of the Middle East into a melting pot for culture and creativity (Dubai Expo 2020: Catalyst for Further UAE Growth, 2013.)
• The event would generate approximately $23 billion, or one quarter of Dubai’s current Gross Domestic Product.
• The 2020 Expo in Dubai would likely attract 20 million visitors as well as generating 300,000 new jobs.
• High profitability, since for every US dollar spent in Dubai the economy would benefit by its six fold return.
• The setting of Dubai for the event is likely to build confidence in Dubai’s housing market by promoting long-term demand dynamics and underpinning fundamentals as a key driver for the rebound of the property market (Dubai Expo 2020: Catalyst for Further UAE Growth, 2013.)
• The majority of the housing facilities associated with the infrastructure as well as other housing sites would be constructed in the more sparsely inhabited part of the area, and that will be a tremendous contributor to the overall expansion of Dubai.
• Regarding hospitality, the estimate is that 25 million people potentially may be visiting the Expo, 70% of which will probably travel from countries beyond the UAE. As a result, the expectation is that the number of hotels would need to be expanded, and in particular that is likely to happen in the area of the Expo itself. The occupancy rates of the hotels would be likely to climb throughout the duration of the Expo.
• A central point of attention for Dubai would be maintaining the flow of tourists afterwards in order to prevent an overage of the hospitality market.
• A bank in Egypt predicts that Expo 2020 will become evident in the market as soon as 2015 with the GDP rising 5.4% in comparison with its former prediction of 4.5%. Such growth is attributed to optimism of investors that resulted from a successful bid for the Expo.
The disadvantages of having the Expo in Dubai are:
• the improved market outlook has contributed to an increase in cost of living, complicating a situation in which residential rates have already risen by an average of 23% over the last 12 months.
• Any negative financial results of the Dubai Expo could result in a short term dip in sentiment levels, particularly on the residential and land sectors that have been seeing significant growth in prices over the last year because of all the expectations associated with the Expo (Nagraj, 2013.)
• The future development of Dubai must remain based on actual supply and demand dynamics, instead of expanding construction simply for one particular event.
- Dubai Expo 2020: Catalyst for Further UAE Growth. (2013, December 3). Retrieved from Zawya.com: https://www.zawya.com/story/Special_Report_Dubai_Expos_growth_impact-ZAWYA20131203062215/
- Nagraj, A. (2013, November 26). Dubai Expo 2020 Win Will Spur Property Market. Retrieved from Gulf Business: http://gulfbusiness.com/2013/11/dubai-expo-2020-win-will-spur-property-market-cbre/