- Construction work on Dubai’s most ambitious project to date has continued at pace during the coronavirus pandemic, with 40 weeks to go until Expo 2020.
- Organizers expect 25 million visits over the course of the six-month event, despite concerns about the pandemic’s impact on global travel and tourism.
- Analysts say Expo will provide a platform for economic recovery, as the UAE’s budget shortfall widens to its highest level on record this year.
The Covid-19 pandemic has stopped many things – but not the construction work on Dubai's latest megaproject.
Rising from the desert on the outskirts of the UAE's financial capital is a new city twice the size of Monaco, and in less than 40 weeks, it will host what organizers say is the largest event ever staged in the Arab world.
"Expo 2020 continues to progress on all fronts," Manal Al Bayat, Expo's Chief Engagement Officer told CNBC. "We're all geared up and excited to host the world in October of 2021 and bring everyone together in the spirit of hope and optimism."
Recent vaccine news and a series of "in-person" events in Dubai has given organizers hope that tourists will travel to attend its long-vaunted world's fair, after it was delayed a year by the pandemic. The costly spectacle comes as Dubai navigates an economic contraction almost four times worse than during the global financial crisis in 2009.
"From a physical visitation perspective, do we expect people to come? Yes," Al Bayat said. "If we look at the malls, if we look all around the city, people have started to feel comfortable to come out again."
Billions of dollars have been poured into the project since Dubai was awarded Expo in 2013, seen as a bid to diversify its economy and enhance its global image as a financial and technology hub. Now, the UAE is hoping for a sizable return on its investment.
Planners still expect 25 million visits during the course of the six-month show. It's an optimistic forecast for an event that relies on tourism, when most of the world has been told to stay at home.
"It seems difficult to achieve the ambitious target for international visitors but, no matter, millions are still expected to descend on Dubai, and that is a huge positive," Tarek Fadlallah, Chief Executive Officer of Nomura Asset Management Middle East, told CNBC.
"Notwithstanding the availability of a vaccine, travel industry observers expect that it will be 2022 or even 2023 before the sector fully recovers," he added, with the trajectory of the virus and its associated lockdowns around the world still proving impossible to predict.
Will it be as big as hoped?
"I think the Tokyo Olympics will most likely go ahead in July and with confidence around mass gatherings restored, there's no reason why people would not want to travel to Dubai for an Expo," said Karim Jetha, chief investment officer at Longdean Capital, an emerging markets asset management firm.
Still, there is sentiment among some that world's fairs are a thing of the past, and not on par with universally captivating events like the Olympic Games or the World Cup.
Other analysts who spoke to CNBC say it's fair to assume the Expo probably won't be as big as originally envisioned. Nevertheless, Expo's team of organizers and consultants are optimistic that travel and tourism, two of the industries most critically affected by COVID-19, are starting to show positive momentum.
"Expo is still months away," Al Bayat said. "From our perspective, we're planning, we're ensuring safety, and we're ensuring that we handle everything responsibly."
Dubai tests 'build it and they will come' model
Dubai is a city that has long answered the question of "why" with a resounding "why not." A Middle East economic miracle, the city has transformed from a pearl trading post to a diversified financial capital in a single generation, with trophies like the world's tallest building and shopping mall offering testament to its success.
But Expo might just be Dubai's most ambitious project to date.
To put the scale of the Expo into perspective, the site itself is 4.4 square kilometers in size, equivalent to more than 600 soccer fields. It has dedicated highway exits and public transport lines, and even includes a 45,000 square foot exhibition center with halls capable of hosting 20,000 people at a time.
The centerpiece of the project is Al Wasl Plaza, a dome as wide as two Airbus A380s side-by-side that boasts the largest 360-degree projection surface in the world.
Now, Dubai's 'build it and they will come' model is being put to the test, as the pandemic accelerates a rapid transition to digital life, work, and learning.
"I don't see the digital Expo replacing the physical Expo," Al Bayat said, when asked how Expo might respond to the changing times.
Expo is, of course, more than just about the buildings. Planners say the pandemic will offer an even better platform for the 190 countries involved to showcase progress and international cooperation after a period of major upheaval.
"We have always prioritized topics like space, climate and biodiversity, travel and exploration, and the pandemic has really shed light on the importance of these issues and the importance of us to find solutions to tackle these challenges," Hind Al Boom, Expo's Content Development Manager, told CNBC.
Expo will also seek to address issues in healthcare and digital connectivity, which have grown in importance this year. At least 80% of the site will also be repurposed after the event into districts focused on technology and innovation, with planners seeking to avoid the wasteful and expensive mistakes of Expos in the past.
Milan's controversial Expo in 2015 is a cautionary tale, reportedly plagued by corruption and mismanagement and widely criticized as a waste of public funds. But others have worked out; Shanghai's Expo a decade ago saw a whopping 73 million visitors in total.
For now, Dubai seems comfortable taking a risk on a proven mantra: bigger is better, and it's working on the assumption that a world's fair still has power to captivate the curiosities of a world emerging from lockdown.
The opportunity cost
Expo will impact the UAE and regional economy, but assessing how is more an art than science, as COVID-19 shreds apart previous economic assumptions.
Analysis by EY from April 2019 shows the event was expected to contribute $33.4 billion to the UAE's economy from 2013 to 2031, and create almost 1 million jobs, but those figures are almost certain to change.
"Expo should coincide with a general recovery in economic activity next year and will provide a timely boost to the travel, retail and hospitality sectors that have been hit so hard by the pandemic. Property may also receive a boost," Fadlallah said.
Numbers aside, organizers say the benefits of Expo will ultimately outweigh its cost, with its theme of "connecting minds and creating the future" seemingly well-suited for a world after the pandemic.
"It's going to be priceless," Al Bayat said.
Correction: This article has been updated to more accurately reflect Expo 2020's projected number of visits.