When the global financial crisis stroke a few years ago, like many countries and cities across the world, Dubai also felt the negative wave. The results were frustrating and many expats and entrepreneurs left the emirates. After that happened, for years people believed that this will be the end of Dubai. Moreover, some continue to have the same opinion even now. A brief overview of the major sectors for development clearly underlines UAE’ growing economic potential.
Retail Sector
The retail sector in Dubai is far from that seen in 2007. For instance, the productivity sales levels in the city’s malls are similar to those registered in London and New York. That is mainly due to the concept of mega-malls which offer diversified shopping and entertainment experience.
Tourism
Dubai and Abu Dhabi’s hotel occupancy has never been higher. More expats and foreign companies are now returning to the region and setting offices. Today, Dubai enjoys a status of the travel hub and the financial center of the Middle East region. The emirate connects Asia with Europe and Africa.
Dubai, in particular, now attracts nearly as many tourists as hotspots like Las Vegas and Hong Kong. The only difference here is that the city is not a gambling center. Even more impressive is the fact that Dubai has an actual chance to dethrone London as a shopping destination and become the biggest travel hub in the world in only two years from now.
Opportunities for Entrepreneurs
One of the things with which Dubai is famous for is its open market philosophy. That is mainly the factor that successfully lures entrepreneurs from all over the world to the emirate. Many people still consider that Dubai’s economy relies primarily on oil revenues. The truth, however, is that there are many traders, financiers, entrepreneurs and merchants who invest in the city and its future.
UAE as a Luxury Market
The UAE, in general, impresses with its luxury market. Various luxury brands are courting the country in an attempt to win over not only nationals but tourists too. As a result, today, Dubai’s luxury retailers have the biggest concentration in the world after those in Hong Kong.
Abu Dhabi’s Potential
Since Abu Dhabi is the capital of the United Arab Emirates, people view it as a treasure-house, where all of the country’s wealth is kept and exhibited. But many refuse to see that the city has every chance of becoming the Gulf’s cultural center. After all, Abu Dhabi is where the New York University is located along the branch of the Paris Sorbonne. Also, in about three years, the Louvre designed by Norman Foster will be opened. In addition, the Performing Arts Museum of Zaha Hadid, the Guggenheim of Frank Gehry and the Maritime Museum of Tado Ando are all set to launch soon. As a matter of fact, the consumers purchasing power in Abi Dhabi is far stronger than that in Dubai.
According to Abu Dhabi’s new big redevelopment plan, the Central Business District will be constructed around Sowwah Square on Al Mariyah Island. That is schedules to happen next month. After the launch, the city will offer a new luxury shopping experience. A number of world-known luxury brands will make new statements in the area.
Challenges in the UAE
But the United Arab Emirates is not only a country of opportunities. There are many challenges, which hinder the success of luxury stores. First is the bureaucracy connected with the municipal building regulations and codes in the UAE. In addition, the state sanctioned sales periods allow retailers to organize sales and give discounts only during particular periods of the year.
The fact that Emirati women traditionally wear abayas is also not in favour of luxury fashion either. Despite that, a big part of them wear high-end branded clothes underneath. That is why bags and shoes enjoy more popularity in the UAE compared to many other countries.
With Emirati men, the situation is different. They wear only the traditional dishdash and no Western clothes underneath it. Consequently, the business for luxury menswear is not thriving in the country. Still, it should be noted that Emiratis make up barely 20% of the UAE’s population.
What can be concluded is that the future of the United Arab Emirates looks bright. In less than a half a decade, the museum areas in Abu Dhabi will be finished. Around the same time, the country will open a brand new international airport worth $7 billion. After 5 years, the redevelopment of Reem, Al Maryah and Saadiyat will be already in motion. When combined with Dubai’s revival, all that shows that the United Arab Emirates has a great potential to become a key economy not only in the region, but in the world as a whole.
