COVID-19 is something straight out of the dystopian fiction and movies of yesteryear. From the sunny beaches in Australia to the rainforests of Brazil, everything came to a standstill. The vibrant nightlife of virtually all metropolises and the usual hustle and bustle during the day vanished. The city that never sleeps, NYC, looked like a ghost town as it became the epicenter of the COVID-19, with over 23,000 deaths in the city alone. And the toll in the USA has crossed 190,000, as of 9th September 2020.
The Middle East was largely spared from the virus in terms of infection and death toll, but economically it devastated the region. The UAE, and in particular Dubai, faced the music and endured a double blow as its economy was hit with dwindling oil prices too. With a total lockdown in place for several weeks, the economic meltdown, especially for small businesses and startups, was evident.
Let me explain what has happened in Dubai in the past six months. And then, I will turn to what can be done to make the situation better for businesses by focusing on the positives.
In May this year, a report by CNBC posted a bleak scenario for businesses based in Dubai. Almost half of the restaurants and hotels surveyed by the Dubai Chamber of Commerce were expected to go out of business within the next six months. The chamber surveyed 1,228 CEOs across a range of sectors in April this year, and most of them were pessimistic about the long-term impact of the deadly virus.
Thankfully, that report and prediction didn’t turn out to be totally correct, but the dire consequences as a result of the virus and its aftershocks are still evident. Tourism and real estate, two primary sources of income for the desert city, has shrunk considerably. With the World Expo 2020postponed till next year, the chances of a sudden turnaround are less likely.
The United Nations World Tourism Organization estimated that the global industry would see a decline in revenue in the range of 20-30% in 2020, with a loss to the tune of up to 50 billion dollars. Dubai is a regional hub for tourism with its skyscrapers, parks, and many other recreational activities that attract millions of tourists annually.
Now that the virus has lost its steam in this region, tourism started in August, with many airlines having started their operations in and out of the UAE.
The real estate market also crashed with the prices now very low, but still, not many buyers are eager to buy properties in Dubai. A recent article published by Reuters also predicts that the prices for real estate in Dubai will fall sharply, and it’s a big letdown for the city looking to bounce back.
Over 90% of Dubai’s population is expatriates, and a sizable population left Dubai or were trying to, as businesses closed down rapidly during the epidemic. The return to business is steady, but a dramatic turnaround in tourism and real estate is a distant possibility as of now.
The most feared outlook for the epidemic is the second wave, which could be bigger and more catastrophic than the first one. Spain and France are likely to be the first countries to see this as the number of new cases is near record levels, as seen during the peak of the first wave. USA, India, and Brazil are still reeling from the deadly virus, and it seems that chances are decreased for them to see a new wave as the first wave hasn’t finished yet.
Countries in the Middle East are less likely to see a second wave as the first wave was also not a severe one, but there is no guarantee that what would happen in the future. Thus, no leniency is required, and all the precautions must be taken to ensure the virus doesn’t return in the winters, as is widely feared.
In the last six months or so, we have seen mind-boggling growth for Amazon and other tech companies. The figures are equally astounding for all the major players in the industry. Amazon, Apple, Facebook, Google, and Microsoft all posted healthy profits, which send them share prices skyrocket. For instance, just on Friday, 31st July 2020, the combined total of the share prices of Amazon, Apple, and Facebook was a whopping 274 billion dollars!
Cloud platforms are seeing an enormous and rapid increase in their market share. Online businesses flourished during the epidemic. From restaurants to online shopping, the demand increases as consumers were left with no choice. For the time being and into the future, in the wake of another pandemic or economic slump, this is the way to go.
Seasoned services like AWS and Azure received the attention, along with other small players too, and doing brisk business. The survey of Fortune 500 CEOs revealed that more than 45% of them were of the view that it will take at least the start of 2022 for the economic activities to return to pre-pandemic levels. This can be devastating for small businesses, but by taking their business online, they can save much cost and get the attention of consumers who are still wary of going to physical stores.
“Never let the future disturb you. You will meet it, if you have to, with the same weapons of reason which today arm you against the present.” – Marcus Aurelius (AD 121–180)
Optimism and hope are two essential factors as to how humans have survived through tough times banking on these two. With some form of a vaccine on the cards at the end or early next year, the outlook is bright as we might see the end of this epidemic, sooner rather than later.
Consumers are now likely to use technology so that they could avoid face to face interaction. Your business can grow by reaching new consumers and offer them products and service innovation for the best results. That’s where your digital infrastructure needs to adapt to the changes to meet the demands of the consumers.
Investing more in collaborating technologies like remote working and knowledge-sharing tools are crucial aspects for sustained and robust growth in the future.
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