RIYADH, April 11: Economy in Dubai thrives on shopping and tourists from all over the globe. And when the region is faced with a crisis, like the current uncertain situation in Iraq, it definitely affects the overall psyche and the business sentiments. Owing to the crisis and despite certain measures by the government, economic activity in the otherwise bustling city of Dubai is definitely touching a new low.
A visit last week to the metropolis was more than enough to prove the point. The number of passengers in the Gulf Air was much less than the carrier capacity. Indeed these are not very conducive days for the airlines industry and Gulf Air is no exception.
However, the stark difference was visible at the airport. There were visibly less passengers using the airport. Being a very regular traveller to Dubai, mostly on business assignments, one could easily recall that in normal circumstances, passengers seem to be getting on to the long concourse leading to the immigration hall from almost every gate. Endless people seem normally to be adding on to the group heading towards the immigration hall. This was definitely not the case this time. Even at the lower level, where some passengers wait for the visa, there were less number of people waiting than the usual case is.
The difference became all the more stark, when one got out of the main airport hall to take the car into the city. Fewer people were seen there waiting for the passengers. Even the normal crowd welcoming guests on behalf of various city hotels at the main entrance was significantly less.
At the airport parking lot, where almost without failure in normal circumstances, people need to look around for a suitable parking lot, was emptier. The driver of the car rental company, which was carrying us, myself, and a colleague of mine, to the hotel complained of severe downturn in business. “Before the current crisis we were required to put in three hours of over time every day, without failure. Not any more,” he said. The number of customers is reportedly down by at least 40-50 percent, some said.
Cases of SARS have also hit the industry at a time, when it was already faced with severe disruption owing to the Iraq crisis. The number of passengers from some of the Far-Eastern countries, who often used to stop-buy Dubai, has also reportedly gone down. Many cancellations to East Asia were also reported by the travelling agencies. This also seems to have contributed to the overall slack in business at the Dubai airport.
Even the hotel industry is beset with problems. “Already retrenchments are in the air. Some of the hotels have asked their non-essential staff to go on forced long holidays, until the environment improves,” a senior business executive of the daily Khaleej Times told this correspondent.
The hotel rack rates have also plummeted. In the same hotel, about a couple of weeks back, when we were there, we were required to pay UAE Dhms. 260 net, without breakfast and taxes. This time it was down to UAE Dhms. 230 inclusive of all. A five star Dubai hotel was advertising daily rates as low as Dhms. 199. Things had indeed changed over the last two weeks. The industry seems to be fighting for its survival.
The receptionist at the hotel we checked in said, “right now we were not doing as bad as some other hotels were doing. But we are very apprehensive of the future. We don’t know how things would impact us.” The occupancy at the hotel was comparatively better than others, because the teams taking part in the Sharjah Cricket Cup were lodged at the same hotel. Now that the event is over, the occupancy may have gone down considerably, one could safely argue.
The lobby of the hotel was wearing a deserted look in the evenings. At times throughout in the entire lobby we were the only ones to be seen sitting out and sipping our cups of coffee.
Shopping Malls are also reporting unusually less activity. At the Sahara Mall at the Unity Road, a shopkeeper selling artificial jewellery complained about considerably low business. “There are very few real buyers in the Mall.” The number of westerners in the Mall was also negligible. We could hardly spot one westerner in the evening. My colleague sighed, “Where have they all (Westerners) evaporated?”
Hashim Khan our taxi driver also was complaining of fewer passengers. “The number of passengers has definitely gone down. It seems we will have to live with it.”
The government seems to be putting up a brave face to the turn of events. It went on with the horseracing tournament, despite some last minute cancellations. The Sharjah Cricket Cup also went ahead on schedule, despite the refusal of New Zealand and South Africa to participate in the tournament, owing to the crisis in the region. Kenyans were the last minute entry into the tournament. The governments were indeed trying to portray that things are close to normal and it is business as usual in Dubai, Sharjah and other emirates.
However, one has to concede it is not business as usual and unless the situation normalises in the region, businesses would stay topsy-turvy in this part of the world. They cannot be oblivious to what is happening, just round the corner.
