The World Expo challenge

The UAE has won the bid to host the World Expo 2020 in Dubai. With anything between a predicted 45,000–60,000 new hotel rooms being required for the event, Michael Jones considers on the opportunity this presents

Lasting for a six-month period and held every five years, World Expo trade conventions draw millions of visitors and are considered a potent catalyst for economic, cultural and social transformation. On 27 November Dubai beat off rival bids from Russian, Brazil and Turkey to become the first Middle Eastern city to hold the Expo.

As the announcement was made in Paris by Bureau International des Expositions (BIE), the international body of 167 member states responsible for deciding the calendar, selection and organisation of World Expo, fireworks exploded up the length of the Burj Khalifa, the world’s tallest building. The ruler of Dubai, Sheikh Mohammed Bin Rashid al-Maktoum, has vowed to “astonish the world” with the event.

“Dubai Expo 2020 will breathe new life into the ancient role of the Middle East as a melting pot for cultures and creativity,” he said.

Organisers in Dubai have predicted that the Expo 2020 will generate revenues of approximately $23bn (€17bn), while financing the six-month event will cost a total of $8.4bn (€6.2bn), with the UAE government spending around $6.5bn (€4.8bn) on infrastructure projects.

Previous expos have set an extraordinary benchmark for showcasing new innovation since the inaugural World Expo in 1851 in London when six million people visited The Great Exhibition. The commissioning of the Eiffel Tower, escalators, diesel engines, Ferris wheels, talking films. the introduction of the telephone to the general public, the commercial typewriter and Heinz Tomato Ketchup have all been launched at World Expos since.

The UAE’s organising committee has selected the theme ‘Connecting minds, creating the future’ for the 2020 event, with the Expo giving hundreds of exhibitors the opportunity to show off the latest in architectural and technological innovation as visitors explore pavilions, shows and cultural events staged by participants including nations, global organisations and businesses.

So, with a predicted 70% of the expected 25 million visitors originating from outside the host nation, making it the most international event in the history of Expo and with the creation of approximately 277,000 jobs, according to consultancy Oxford Economics, what are the implications for the hospitality industry in Dubai? A vast exhibition centre will be built to host the event, as well as a host of new hotels and an extension to Dubai’s metro line. Experts have predicted anything between 45,000-60,000 new hotel rooms needed to house visitors in projects in the surrounding area of the proposed 438-hectare Expo site in Jebel Ali, near Dubai’s new airport.

“Dubai’s real estate growth will be in this area,” Craig Plumb, regional head of research at consultants Jones Lang LaSalle told Reuters’ Treasury correspondent for the Gulf Martin Dokoupil earlier this year. “There’s a need for more hotels close to the Expo site.”

But there are also inherent risks with such investment as property developers may speculate too high and construct too many commercial projects in anticipation of demand. Such a situation occurred between 2008-2010, when the worldwide financial crisis caused property prices in Dubai to plummet in excess of 50%. It is also by no means certain that the Expo will make a profit. The World Expo in Shanghai in 2010 enjoyed an operating profit of over 1 billion yuan ($164 million), but the World Expo in 2000 in Hanover lost approximately $1bn when attendance fell short of forecasts.

Sheikh Mohammed bin Rashid al-Maktoum, remains defiantly optimistic that the Expo in Dubai will be both successful and profitable. “To take a risk and fail is not a failure,” he said in a book launched before the announcement of the successful bid. “The real failure is the fear of taking any risk… If we had waited for regional stability to be restored before launching our large projects, where would we stand today?”

Quite how many new hotels will be built to reflect the positivity of Dubai’s leaders remains to be seen, but already the city is well blessed with some of the finest hotels and restaurants in the world. The JW Marriott Marquis Hotel Dubai, named the world’s tallest hotel by Guinness World Records, made its debut in November 2012, boasting 14 restaurants, bars and lounges, including Levant, an Arabic restaurant, and Rang Mahal from Michelin Star chef Atul Kochhar. The Burj Al Arab, also grabbed headlines across the globe this year when it presented each guest with a 24-karat gold iPad upon check-in at the luxury hotel, where rooms start at $1,525 a night.

The next World Expo will take place in Milan, Italy, in 2015 with the focus: ‘Feeding the Planet, Energy for Life’.

Michael Jones



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