Although felt by all, the impact of Covid-19 varies by segment. Businesses that are more heavily reliant on travel and human interaction are the hardest hit, while those which are indispensable (for example, pharmacy and food retail) and/ or aid business continuity (for instance, essential services) are relatively resilient.
- A significant reduction in personal and business travel is impacting the sector with occupancy and revenue per available room severely affected. While some locations have closed, other have opted to promote staycation packages in order to cut losses.
- Hotel operators in Dubai believe that their FY 2020 revenue may contract significantly.
- How deeply the sector is affected will largely depend on travel restrictions and traveler sentiment. Hotel operators, the airline industry and governments will play a key role in re-establishing confidence.
- A key component of the local economy and lifestyle, bricks-and-mortar retailers have been heavily impacted, as consumers turn to e-commerce. Some stakeholders have attempted to use technology to remain connected to their customers.
- Certain sectors have been able to adapt, such as food and grocery delivery, and even cinemas: drive-in movie theaters were established as a result of social distancing protocols.
- As the weather gets warmer and most people refrain from travel in the near future, the immersive Dubai shopping mall experience may again become a key part of daily life for residents, assuming consumers are positive about being with large crowds.
- Increased acceptance and promotion of remote working is expected to become a permanent feature of corporate culture in the future.
- Dependent on the sector, some businesses will likely require less dedicated space per head due to a shift towards hot-desks and remote working. This may be balanced out by social distancing requirements (externally or internally imposed) in the short to medium term.
- Softening of the residential sales and rental markets is expected to continue.
- Future handovers will be impacted by the duration of the pandemic, buyer sentiment, easing of restrictions and supply chain issues.
- The Central Bank of the United Arab Emirates’ incentives include a 5% increase in the loan-to- value ratio for first-time home buyers and a 50-basis point reduction in the benchmark interest rate. It is hoped that these measures will spur market activity. Major developers are also offering attractive payment plans for properties sold off-plan, enabling buyers to pay a minimal down payment during construction.