New survey reveals 70 per cent of Dubai businesses expect to go bust within six months
Three-quarters of travel and tourism firms expect to close in six months
A survey by the Dubai Chamber of Commerce has laid bare the sheer economic devastation wrought by the Covid-19 crisis on the emirate.
The body questioned 1,228 CEOs between April 16 and April 22, of which three-quarters ran small businesses. Of the respondents, more than two-thirds described the risk of going out of business in the next six months as moderate-to-high. Meanwhile, 43 per cent admitted that they expected to close their doors permanently by the end of October and a shocking 27 per cent stated that they expected to lose their businesses by the end of May.
As one of the Gulf economies least dependent on oil, Dubai is instead dependent to a great extent on tourism. While the emirate has a varied economy of thriving hospitality, property, retail and entertainment sectors, such diversification offers no protection when the steady flow of visitors is stopped by unprecedented global lockdowns.
According to the report, some 30 per cent of the region’s transport, storage and communications firms expect to close in the next six months, while 74 per cent of travel and tourism firms expect to shut down.
The pessimism evident in the survey could reflect the fact that it was carried out during the period in which Dubai’s lockdown restrictions were most severe.
Pointing to the lifting of some of these measures and the fact that fewer than 250 people have died from Covid-19 in the entire UAE, the mood in mid-May could be said to be lighter.
However, with key figures such as the CEOs of Boeing and Airbus publicly stating that international air travel could take years and not months to recover to pre-crisis levels, there is still genuine cause for concern.
Reacting to its findings, a spokesman for the Dubai Chamber of Commerce stated that the respondents' “sentiments were based on the expectation that the strictest lockdown phase would be prolonged.
"We anticipate that business confidence will improve significantly in the coming weeks and months as businesses return to more normal operation.”
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