EXPO 2020, the Big Wind-Fall for Hotel Investments

On 27th November 2013, Dubai won the bid to host the World EXPO in 2020. As Dubai was announced the winner, dazzling celebratory fireworks kicked off from the Burj Khalifa.

What are the big WINS? And where are the Opportunities?

Why is the Dubai EXPO 2020, such a big deal?

World Expos are a key meeting point for the global community to share innovations and make progress on issues of international importance. Famous innovations revealed include the Telephone (Philadelphia 1876), Statue of Liberty (Paris 1878), The Ferris Wheel (Chicago 1893), X-Ray Machine (New York, 1901) and so on.

The DUBAI EXPO will be first ever held in the region and will run for 6 momths, celebrating culture, collaboration and innovation. 190 participating countries and millions of visitors from across the globe will attend.

While 250,000 new jobs will be created there is one specific place of opportunity;

To Understand THE Biggest Opportunity, Understand some key figures;

27 million expected tourist arrivals by 2020 (14.2 million in 2017),Source: EuroMonitor International

60,000 Hotel Rooms still needed by 2020. Currently at 104,000 and target of 164K (2017),Source: Dubai Tourism

Clearly you can see there is a large discrepancy between the numbers of tourists expected to visit Dubai in 2020;

“When you look at the number of visitors that are expected to arrive in the UAE for EXPO 2020, then it is clear that you will need more supply in the hotel inventory”. Laurent A. Voivenel, Senior Vice President,  Swiss-Belhotel International.

One would question; Are these tourist numbers sustainable beyond EXPO 2020? I believe yes, and below are my reasons:

Dubai does it Big:

Dubai believes and follow the mantra, build it and they will come. This was very evident recently when I attended the Tony Robbins event at the Coca Cola Arena with 10,000 people. No queues, no traffic jams, the entire experience was amazing. (Check out my review of the Tony Robbins Events here).

The arena has a 17,000 person capacity and people traveled to Dubai from all over the world for this event. Dubai has now opened the doors to future such mega-events.

Fun 10 X:

The head of strategy for a major Dubai firm was asked in 2009 how the Emirate would fare, given the meltdown in financial and property markets. “We’re not worried”, he argued. “Basically, if you live between Cairo and Karachi and you want to have fun, you’ll come to Dubai”.

This still holds true today.

Leveraging to grow stronger:

The old perception that Dubai is only about sun, sea and shopping is changing. We have the Dubai  Opera a now, and in Abu Dhabi, the Louvre Museum has been attracting tourists from the entire region –  so there is a huge diversification in terms of offerings and attractions.

In short, Dubai is a Dream. Either you come and live here, or work here or travel here for a short or a long.

Fdglobalproperties

Dubai gives cities like New York, Toronto, Paris, London, Tokyo a run for their money when it comes to attracting tourism.

For this reason, one of the best opportunity I have identified is investment in a Hotel Room or Hotel apartment in Dubai.

In simple words you own a hotel apartment, and your apartment is managed by a professional hotel operator, and then profits are distributed to you quarterly. No headaches, No Fuss.

Hotels will benefit immensely from the increase in the number of tourists and Dubai already has a high occupancy rate of 75% (2018) and an Average Daily Rate (ADR) of USD $ 172, which is $40 more than the ADR recorded in Shanghai during Expo 2010.

To benefit from such a high Average Daily Rate with no rental caps, look at hotel investments especially before EXPO 2020.

However a word of caution, not every developer can and will be able to successfully deliver a Hotel project, for which due diligence, over sight of terms and conditions, past track record and more needs to be looked at on a case to case basis.

In the end Dubai will again do it big and deliver on the world stage, and with the theme of the EXPO being “Connecting Minds, Creating the Future” it is clear that Expo 2020 will go beyond a local showcase of commerce, technology and infrastructure.

The opportunity surrounds us, will you take your part?

Speak soon,

Fahd Dawood 
CEO | FD Global Properties

+971 55 421 8943

Author: “The Intelligent Real Estate Investor”
YouTube: Fahd Dawood