Football stars, actors and television personalities from Cristiano Ronaldo to Maya Jama were among those who enjoyed the holiday period in Dubai, working and playing in the tourist hotspot in the Gulf, as Europe suffers from a strict blockage of the coronavirus.
With the start of 2021, barely appearing elsewhere, the airport in the UAE’s shopping center was hit as British, French and Russian tourists flooded into what has recently become the world’s most open city, where visitors can enjoy socially spaced restaurants, bars and raves.
After a hard blockade, the city began to open its economy gradually in May. With the launch of a rapid vaccination program by the United Arab Emirates, reservations for hotels in the city are booming and a dying real estate market is returning.
“Dubai has taken a stand – people see somewhere relatively safe and so they are ready to travel,” said Simon Casson, president of hotel operations in Europe, the Middle East and Africa at the Four Seasons group. “There are few hotels in the world today that enjoy the levels of demand that Four Seasons Dubai has.”
Since November, occupancy and rates at the two hotels in Dubai have risen to more than 90 percent at the beach location in December, from lows in simple numbers over the summer, he said. In the first week of December, occupancy in Dubai reached 66%, according to data provider STR.
Dubai, more affected than Abu Dhabi, the richest capital of the United Arab Emirates, has adopted easier entry requirements to boost tourism. Dubai requires visitors to take negative Covid-19 tests at check-in and take another on arrival, although the British 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 United Arab Emirates, and cases have increased since the new year. Authorities have so far reminded only people to adhere to social distancing protocols.
The two-month revival in tourism, which together with the real estate sector accounts for about a third of the economy, is part of a story about the emirate’s resurgence, as many of the foreigners it relies on have left because of the pandemic. Up to 10% of the population of 10 million, the vast majority of whom are expatriates, have fled the country, Western officials estimate.
Since then, the United Arab Emirates, which has reported about 700 reported coronavirus deaths, has led the way through its vaccination push. This month, Dubai launched its BioNTech / Pfizer vaccination program, which aims to inoculate 70% of the population in 2021, building on the UAE campaign using China’s Sinopharm jab. The United Arab Emirates is now in second place after Israel in the global vaccination race, at 9 doses per 100 people, and intends to overtake its new ally.
“It’s the only place I know where you can really live your normal life – they’ve discovered everything – there are masks everywhere,” said John, a New York banker who has just moved his family to Dubai.
While years of oversupply of property continue to weigh on a market down 40% from its peak in 2014, some districts are now beginning to recover.
Ben Kirkland, a merchant who agreed to buy a four-bedroom townhouse on the artificial Palm Jumeirah before the virus struck, thought he had made a terrible mistake when he was stranded abroad during the pandemic.
But he and his wife continued with the purchase, and the value increased by up to 20%. “It turned out to be a good decision, buying as close as possible to the bottom of the market.”
Apart from tourism and property, many sectors still suffer. In November, managers reported a decline in activity and the weakest growth in new business for five months, with a “solid decline” in production, according to the IHS Markit Purchasing Managers’ Index, which looks at business sentiment. While jobs continue to be lost, the elimination rate has fallen to the lowest level since the pandemic.
To stimulate recovery, the government has introduced a number of reforms to improve the quality of life and attract foreign direct investment, including eliminating the requirement for an emirate to own 51% of a business.
Although concerns remain about the total debt burden of the emirate, Hasnain Malik, a Dubai-based analyst at emerging market research firm Tellimer, said it would be eased by low global interest rates, renewed tourism activity and support. default from Abu Dhabi, which previously saved.
“Debt is an Achilles’ heel, not a business break,” he said. “If this resists, the exposure could turn into an engine, as investors are looking for exposure to very well-targeted tourism economies.”
For now, the party continues. The city’s New Year’s holidays were overshadowed by the traditional sound, light and fireworks show around Burj Khalifa, the tallest building in the world, albeit with yellow “#staysafe” stickers marking physical distance.
The highlight of the show included a slogan coined by Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and the de facto leader of the United Arab Emirates, assuring the public of the country’s ability to cope with the coronavirus: “Don’t worry.”