- By: Deepali Nandwani
Many markets in the UAE have opened to what is termed as the ‘new normal’. Restrictions have been eased out and there is a gradual return to economic activity and everyday living. The Federal Authority for Government Human Resources (FAHR) announced the return to work of all UAE government employees at a capacity of 100% by 5 July. UAE opens its international borders on 7 July.
The decision is based on a wide range of normative studies and research, especially the safe return protocol to the workplace, charted out by the relevant committee in the Ministry of Health and Prevention, in coordination with the Health Authority – Abu Dhabi, the Dubai Health Authority, and the National Emergency Crisis and Disaster Management Authority (NCEMA).
The opening of the local economy
PWC Middle East terms the UAE’s return to normalcy post-April as a “Nike-swoosh” curve, a slow pick up that will turn into a sharp curve soon. The country is dependent on global economic revival, which according to the World Bank will be a somewhat slow. Here is what it predicts:
In 2020, the world economy will contract globally: 5%
In 2021, the world economy will increase: 4%
While the World Bank calls it the biggest recession in almost 80 years, UAE is falling back on its domestic market to shore them up for a while.
UAE’s economy: GDP of USD 414 billion (AED 1.52 trillion)
In the last few years, the UAE had begun to diversify its economy, which was largely reliant on revenues from petroleum and natural gas. Travel and tourism formed a large part of its diversification plan.
What is the sign of a country returning to normal after a post-pandemic lockdown? The opening up of its salons and barber shops, its restaurants and bars.
The country has opened up its malls (up to 70% capacity), its beaches, its public transport and its offices, even as confirmed coronavirus cases spike. So there are temperature checks, social distancing monitors at supermarkets and outside the beaches, and marked empty seats in the Dubai metro. Abu Dhabi’s Department of Economic Development has ordered companies outside of free zones to test all their employees.
PWC’s survey of UAE economy
The survey was carried out amongst companies based in the UAE, including those in the hospitality and travel businesses.
Return to business as usual: 3 to 6 months is the verdict of 35% of those surveyed. Some put the time frame between 5 to 6 months.
While consumer confidence is picking up at a slow rate of expectancy, states PWC, and a cautious approach to spending, many are stepping out of homes, engaging with people beyond family, and eating out, though going to the movies hasn’t yet become the norm.
This kind preparedness and a rejuvenated infrastructure will instil confidence in travellers and help kickstart the economic revival.
The slow opening of the hospitality and travel segments
A major part of UAE’s economy is now dependent on travel and tourism.
Travel and tourism’s contribution to UAE’s economy: AED 159.1 billion (USD 43.3 billion)
The segment’s contribution to the GDP: 12.1%.
Forecast by 2027: Will rise by 4.9% per annum, to reach AED 264.5 billion (USD 72 billion)
Contribution to the GDP by 2024: 12.4%.
Courtesy Visiting and Exploring UAE
The country is taking effective steps to open up at the right time, with the right protocols in place. Among the first to open in June were the restaurants, cafes and bars, particularly in Dubai and Abu Dhabi.
The restaurants that have opened in the last 10 days: Big names such as Bombay Brasserie, Eloquent Elephant at Taj Dubai, Seven Sisters at JW Marriott, Al Nafoorah at Jumeirah Emirates Towers, Bull + Bear at Waldorf Astoria DIFC, Carine at Emirates Golf Club, The London Project, Netsu at Mandarin Oriental Jumeirah, and many more.
Jumeirah Al Qasr, a palatial luxury hotel, launched Dubai’s new dining address, called the French Riviera in June. At the waterfront dining experience, chefs will take guests on a French culinary journey, from St-Tropez to Monte-Carlo right up to the South of France.
McGettigan, a famous Irish bar chain in Dubai’s Jumeirah Lake Towers’ neighbourhood, quietly opened up last weekend but saw a queue of people waiting to get in. There is a night curfew on in Dubai, so the bar shut at 10 pm, but by then they had already served over a 100 people in one day with strict social distancing norms in place.
In a press communiqué in response to our questions, McGettigan told us, “We are even bringing back our weekly ladies nights, which were quite popular. Social distancing measures in effect include two-metre social distance stickers leading into the venue, tables spaced at two metres apart, and hand sanitisers and temperature checks on arrival. Everyone will need to wear a mask and gloves.”
Abu Dhabi’s popular Japanese restaurant, 99 Sushi, not just opened its outlet in the emirate, but also launched its new restaurant in Downtown Dubai on 2 July, says its general manager Jaime Castaneda. “It is very easy to socially distance in a restaurant like ours. You come to 99 Sushi to eat and not to hang out at a bar. We already have a two-metre dining distance. Fine-dining restaurants are all about serving quality to smaller numbers.”
But in keeping with social distancing norms, for the Dubai outpost, he recruited only 60% of the workers originally intended, and many of their Abu Dhabi employees have been moved to Dubai. There is also an increased focus on home deliveries.
Chef Rief Othman, who launched a cake and chirashi counter, and a donburi pop-up at Nakheel Mall in Palm Jumeirah in May-end (UAE began opening in the first week of May) as a prelude to his restaurant, Kushi by Reif, says, “We took the time out to train our team and come up with ideas. This pandemic has been a learning curve but we are seeing more people coming in and the confidence growing.”
Most hotels began opening in the first week of June. We wrote about the Fairmont Ajman property in the first edition. Fairmont Fujairah Beach Resort opened around the same time, on the Ei-Al-Fitr weekend.
The property, hidden deep within the valleys of the rugged Al Hajar Mountains, along the coastal region of Dibba, features 179 luxurious rooms and suites, a year-round outdoor pool and a sun terrace. Rabih Zein, the general manager of the hotel decided to open up all the restaurants and the expansive outdoor pools for guests checking-in, just in time for Eid. “In fact, during the entire Ramadan period, our all-day dining restaurant, Canvas, and the seafood eatery, Copper Lobster, were open for Iftar every evening,” he says. “We also made the private beach available to guests. We have put in place the government guidelines about restaurants, pool areas and the beach, including lowered occupancy, mandatory personal protective equipment, social distancing rules and hand-sanitiser stations.”
Families and friends gathering at the beach cannot exceed 10 people. Zein says they have opened only for staycations right now, as they are focusing on guests who can drive in from other emirates. “We have altered our operations. For instance, the sunbeds are now placed two metres apart, and the hotel is run at 30% capacity in terms of guests.”
The pandemic has been a new learning curve for hoteliers.
He sees leisure travel picking up first. “COVID-19 may have changed many things but what it hasn’t changed is the basic desire in people to travel and experience the simple pleasures of life, be it dining or entertaining. Staycations are an interesting trend. The pandemic has only shown how a quick break, which is a short drive away, can be as uplifting to the spirit. This is the time for travellers to explore more of the outdoors: wellness breaks, nature escapes, culinary indulgences, beach or desert getaways, and cultural discoveries. A lot can change.”
The UAE government has laid out strict protocols for opening. “The focus on health and safety of residents, and the country’s ability to reinvent itself, definitely puts it at the top of the list of countries that can swiftly emerge from this pandemic, stronger and faster,” says Walia, who while claiming to possess no crystal ball, remains cautiously optimistic. “We are beginning to see green shoots and early signs that indicate an inherent desire in people to begin to travel.”
In the UAE, Marriott International is focussing on launching campaigns to support local communities to reignite the desire for travel. “Our initial focus will be on local travel first, as people reconnect with friends and family who have been missed, take staycations, and travel to domestic locations. We believe that there will still be a demand for travel—initially, this will be closer to home as people travel domestically and inter-regionally, and then gradually evolve.”
Marriott International has also reimagined their F&B experience, which involves dropping all-you-can-eat food stations and buffets in favour of serving smaller portions on the table, contactless menus, and the use of technology to enable e-menus.
“Technology will be a huge enabler,” observes Walia. “We will see guests embracing technology and exercising the choice to go touchless at various touchpoints of their journey. From growing popularity for keyless check-ins and mobile keys, to contactless menus or e-menus, to increased use of digital modes of payment, technology will be woven into the guest experience seamlessly. We are introducing electrostatic sprayers to ensure cleaning of all public areas.”
Besides staycations, hotels in UAE are gearing for Phase 2 of the opening.
The group has used the lockdown to create a stronger workflow, upgrade the health and safety standards, and make sure their employee retention policy pretty much retains the best and most loyal talent. “We have initiated the first stage of the hygiene and social distancing programme.
In phase 2, we might launch safety standards reviews or scores, with global and regional certification, which we are working on right now. People can go on to review platforms and leave reviews based on those certifications,” he adds.
Under the larger Millennium Hotels umbrella, the group has deployed the ‘We Care, We Clean and We Welcome’ programme in partnership with global hygiene leader, Ecolab. “There are 10 steps, which we call our pillars: Rigorous cleaning and sanitation procedures, a paperless process during check-in and check-out; touch-less transactions; sanitizer stations; social distancing norms with floor stickers; reduction in contact points in the F&B outlets; and the insistence of wearing protective equipment by both guests and staff at all times.”
Domestic tourism and staycation business over May and June have seen beach properties and luxury hotels report 40-50% occupancies.
However, the UAE’s domestic market is rather small when compared to the tourism infrastructure that the country has built. Jain offers a perspective: The total population is 9.9 million. Last year, total visitors to the different emirates were 16 million, and it was expected to touch 20 million in 2020.
Inbound and outbound: how the travel segment will evolve
The UAE has announced the opening of its borders and will target various markets, phase-wise, depending on its bilateral agreements with various countries. “To give you an idea on the action plan, this is what it looks like: Domestic tourism and staycations; GCC markets; the Far East and China; and then the European market,” adds Jain.
The travel and hospitality industries heaved a sigh of relief on the announcement that the country will open up its inbound and outbound travel on 7 July, and create travel bubbles with different nations.
International travellers planning their trip to Dubai will be guided by new protocols which explain clear steps to ensure a safe trip: They must take a PCR test up to four days (96 hours) ahead of their date of travel; a PCR test may be carried out on arrival at Dubai airport; tourists will be encouraged to check their country’s travel advisory for guidance on outbound trips, and a complete health declaration form will be required, as well as travel insurance that covers COVID-19.
Many in the UAE are pushing their government to set up travel bubbles with not just Europe but also countries they have had strong ties with, such as India. “UAE has the location benefit, particularly from India—just 3hours 30mins away and several flights connecting the two from Dubai, Abu Dhabi, Sharjah and Ras Al Khaimah. All these emirates are connected by road to Dubai, with a distance of 30 min to 1hours 30 min maximum, which is a great advantage,” adds Jain, whose business focuses on the crucial MICE segment.
India is UAE’s key market. About 80% of Jain’s business comes from India, while the rest is from the Sri Lankan and Malaysian markets. Kiron refers to India and GCC’s historical bilateral trade, culture, commerce and diplomatic relationships. “One cannot do without the other. Once international borders are reopened, there will be a big rush from both sides. This will naturally form a travel bubble. The GCC seems to be opening up first (especially UAE, followed by Qatar). If this happens, India will follow suit as Gulf carriers will require a feeder into India, since this is a very large market for them.”
MICE and destination weddings are the two big segments everyone is keenly watching.
Jain contends that it will be a while before MICE recovers. “We are getting mixed reviews from corporates—some do not want to take even 1% risk with their staff and channel partners, while others are confident that UAE is safe and can try with a smaller group and smaller conferences. Once the leisure business picks up speed, it will lay down the base for MICE. One very important factor for UAE’s MICE industry is our huge capacity, which allows us to follow a proper social distance norm of two meters during conferences and gala dinners,” attests Jain.
To their delight, the Dubai World Trade Centre is gearing up to resume events and exhibitions in the second half of the year. They are working aggressively towards restarting and accelerating the return to normalcy of business events—a critical goalpost.
Experienced companies such as Equifax are receiving requests for destination weddings in January and February 2021, with smaller group size and charter flights. “Families are looking to buy out entire hotels and staging all their functions within one resort.”
For Aarti Manocha, Founder, Milestones to Memories, a destination wedding company, India is a huge feeder market for weddings in the UAE. “The short halt and excellent connectivity; great weather during the winter months; opulent and luxurious hotels and resorts with beautiful venues to host functions; easy access to resources; superb quality cars for logistics; and the support from the tourism boards make UAE a big destination for Indians.”
Most in the UAE are looking forward to the time between October and March, when the inbound leisure and MICE season typically falls. Right now, Manocha says, there is a lot of uncertainty in the minds of her clients. “We cannot predict when we will see revival. We are working on different formats: intimate and home-style weddings, for instance. However, a dipstick I did with some of my clients who we were in talks for weddings in the last quarter of 2020 and early 2021, revealed that they are not looking at making it smaller or intimate. Instead, they are willing to postpone it.”
Some optimistic views believe that the post-October period will see a comeback of a few smaller MICE and destination weddings. “Clients will benefit from very good rates offered by hotel properties and other ground handling agents. Value for money, as a concept metaphorically speaking, will hit the roof,” states Kiron.
Several factors are in favour of UAE: its vast modern infrastructure, its ability to social distance due to availability of space and luxury establishments, its enthusiasm to launch new travel experiences in keeping with the times, and the variety of hotel properties and unique venues to choose from and suitable for all budgets.