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As a world meeting point for luxury tourism, Dubai is affected at its heart by the coronavirus crisis. Renowned for its luxury shopping but also for its prestigious real estate and 5-star hotels, the emirate of the United Arab Emirates is struggling to recover. Companies and employees working in the luxury sector remain today plunged into uncertainty as they face a crisis of unprecedented proportions.
In the heart of Marina, an ultra-tourist district of Dubai, dozens of white yachts are desperately screwed to the quayside. The usual crowds of tourists lining the canal in the midst of the multitude of skyscrapers have disappeared.
The world capital of luxury has not escaped the crisis either.
“It is almost 95% of turnover that has been lost, if not 100%” the co-manager of a yacht charter company told Agence France-Presse (AFP).
With the interruption of air transport and containment measures, and while the Emirates have officially recorded more than 546 cases and 11 deaths due to Covid-19 disease, Dubai has suddenly seen its business cut off.
Although the country is gradually coming to the end of its containment measures, most luxury industry players are still in a state of total uncertainty at this point.
A sharp drop in demand
From the very beginning of the health crisis, the Emirates has announced a $70-billion stimulus package and other measures to support the economy, including tax relief and exemption from fees, while allowing businesses to lay off foreign employees, reduce wages, or impose unpaid leave.
But demand, which is in freefall, is not enough to reverse the curve. “We can hold out until the end of the year or the beginning of January” said the two partners of the yacht charter company.
The company has lost “between 200,000 and 300,000 dirhams” (about 50,000 to 75,000 euros) since the beginning of the crisis and “the employees only received 50% of their salary (in March) and were asked to take unpaid leave last month.”
Same perspective for the big hotel groups as for the gigantic shopping malls: all the places that support Dubai luxury have been abandoned since the interruption of air traffic and travel restrictions.
Demand, already very weakened, is even more so in these times of Ramadan, in a city where Islam is the official religion.
And yet, Dubai has built its reputation by becoming the showcase of luxury and high-end services, between its gigantic shopping centres – the famous “malls” – and its countless skyscrapers, including Burj Khalifa, the world’s tallest tower.
Luxury, a crucial sector for the city-state
The collapse of tourism is all the more problematic as services represent about 80% of Dubai’s economy and “all will be affected by the coronavirus crisis to varying degrees” according to James Swanston, an analyst at Capital Economics, a London-based consultancy firm, who specifically refers to tourism, commerce and hotels.
The emirate, which welcomed more than 16 million foreign visitors in 2019 and hoped for 20 million this year, is relying mainly on international tourist flows to stimulate its economy, which has been experiencing difficulties for several months.
“We estimated that if measures of social distancing and travel restrictions are in place for 3 to 4 months that this would knock around 5% to 6% off GDP (gross domestic product) at least this year“, the specialist warns.
In the Gulf, this situation is criticized by human rights organizations because the emirate employs hundreds of thousands of low-income foreign workers and struggling businesses are now likely to lower even more the income workers. Vani Saraswathi, associate editor at Migrant-Rights.org asked: “What measures will these states put in place to prevent further distressing workers?”
In Dubai, a financial, commercial and tourist hub for tourists and expatriates in search of extravagance and excess, uncertainty remains the order of the day.
Read also > Global luxury industry to contract between 20% and 35% in 2020, according to Bain
Featured photo : © The Dubai Mall / Facebook
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As a world meeting point for luxury tourism, Dubai is affected at its heart by the coronavirus crisis. Renowned for its luxury shopping but also for its prestigious real estate and 5-star hotels, the emirate of the United Arab Emirates is struggling to recover. Companies and employees working in the luxury sector remain today plunged into uncertainty as they face a crisis of unprecedented proportions.
In the heart of Marina, an ultra-tourist district of Dubai, dozens of white yachts are desperately screwed to the quayside. The usual crowds of tourists lining the canal in the midst of the multitude of skyscrapers have disappeared.
The world capital of luxury has not escaped the crisis either.
“It is almost 95% of turnover that has been lost, if not 100%” the co-manager of a yacht charter company told Agence France-Presse (AFP).[/vc_column_text][vc_cta h2=”This article is for subscribers only.” h2_font_container=”font_size:16″ h2_use_theme_fonts=”yes” h4=”Subscribe now!” h4_font_container=”font_size:32|line_height:bas” h4_use_theme_fonts=”yes” txt_align=”center” color=”black” add_button=”right” btn_title=”I SUBSCRIBE!” btn_color=”danger” btn_size=”lg” btn_align=”center” use_custom_fonts_h2=”true” use_custom_fonts_h4=”true” btn_button_block=”true” btn_custom_onclick=”true” btn_link=”url:https%3A%2F%2Fluxus-plus.com%2Fen%2Fabonnements-et-newsletter-2%2F|||”]Unlimited access to all the articles and live a new reading experience, preview contents, exclusive newsletters…
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As a world meeting point for luxury tourism, Dubai is affected at its heart by the coronavirus crisis. Renowned for its luxury shopping but also for its prestigious real estate and 5-star hotels, the emirate of the United Arab Emirates is struggling to recover. Companies and employees working in the luxury sector remain today plunged into uncertainty as they face a crisis of unprecedented proportions.
In the heart of Marina, an ultra-tourist district of Dubai, dozens of white yachts are desperately screwed to the quayside. The usual crowds of tourists lining the canal in the midst of the multitude of skyscrapers have disappeared.
The world capital of luxury has not escaped the crisis either.
“It is almost 95% of turnover that has been lost, if not 100%” the co-manager of a yacht charter company told Agence France-Presse (AFP).[/vc_column_text][vc_cta h2=”This article is for subscribers only.” h2_font_container=”font_size:16″ h2_use_theme_fonts=”yes” h4=”Subscribe now!” h4_font_container=”font_size:32|line_height:bas” h4_use_theme_fonts=”yes” txt_align=”center” color=”black” add_button=”right” btn_title=”I SUBSCRIBE!” btn_color=”danger” btn_size=”lg” btn_align=”center” use_custom_fonts_h2=”true” use_custom_fonts_h4=”true” btn_button_block=”true” btn_custom_onclick=”true” btn_link=”url:https%3A%2F%2Fluxus-plus.com%2Fen%2Fabonnements-et-newsletter-2%2F|||”]Unlimited access to all the articles and live a new reading experience, preview contents, exclusive newsletters…
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