Jose Silva said the event will help Dubai grow in the long term, though it may lead to slower market conditions at first
While Expo 2020 is expected to bolster Dubai’s position in the international field, it might result in a sluggish hospitality market, according to the group CEO of hotel giant Jumeirah.
Speaking to Arabian Business, Jose Silva said an oversupply in hotels, built to accommodate an estimated 25 million visitors to the city, may lead to slower market conditions for up to three years after the exhibition takes place.
“You may have a small stagnation after [Expo 2020] for a few years, 2-3 years, but my experience is that it only helps [markets] grow, because once you have more supply and offerings, inevitably, you will have more tourism. And it will soon after be fully consumed and growth will continue,” he said.
Silva, who took part in a number of world exhibitions during his career, said Expos have been “transformational” in most cities where they have taken place.
“Expo 2020 is certainly the perfect moment to increase tourism infrastructure, be it in hotels, restaurants etc. It really allows you to invest and increase your tourism infrastructure,” he said.
The CEO said Dubai is the Middle East’s economic hub for the services sector, particularly with regards to consulting, banking and advising.
“Dubai is what I call the economical nerve of the Middle East. It is the London of Europe or the Singapore of Asia. Once you become the economic anchor of a destination, growth is unstoppable,” he said.
While exhibitions such as Expo 2020 may cause temporary stagnation in the city’s hospitality sector, it will not hinder its growth as a regional destination.
“When you have events like the expo, you may have a burst of construction then stagnation for a few years, but it will never be [permanently] stagnant. [Dubai] will keep being the growth of the Middle East. I would invest more in Dubai than any other destination,” he said.
In January this year, Emaar Hospitality CEO Olivier Harnisch said hotels are not built for six-month events such as Expo 2020, but for long-term market development.
“I don’t know if anyone would build hotels just for expo. We’d be foolish if we built hotels just for Expo,” he told Arabian Business at the Gulf and Indian Ocean Hotel Investors’ Summit (GIOHIS) in Abu Dhabi.
The chief executive warned against constructing hotels just for the event, which will see developers add 50,000 rooms to accommodate 25 million visitors expected to visit Dubai.