Compare pictures of Dubai from 1985 and today and you will be flabbergasted. To say much has changed would be the understatement of the century. How did the happen? One word: Emirates. But with demand for air travel deeply depressed, Dubai is feeling the heat like never before. As Emirates and Dubai shrink together, so does the economic fortune of millions.
Mutual Woes: Emirates And Dubai Shrink Together
If you want to understand how important Emirates is to the economy of Dubai, 2020 presents a prefect case study. As the pandemic has devastated air travel and tourism, that has had enormous ripple effects throughout the entire economy of Dubai.
Emirates has shed tends of thousands of workers, most of them expatriates. These foreigners are not just leaving Emirates, but leaving Dubai. The result has been catastrophic for restaurants, bars, gyms, hotels, and private schools.
As Sir Tim Clark, Emirates’ President, told the Wall Street Journal:
“It is extremely difficult for the hospitality sector, the restaurateurs, the hoteliers, but they are not alone. The number of people coming into Dubai has significantly reduced. Everything has got to go into a deep freeze.”
Take Rock Bottom Cafe, a familiar hangout and watering hole to anyone associated with Emirates. Located just blocks from one of the compounds that houses Emirates employees, it used be packed well into the night, every night of the week. COVID-19 devastated business for months.
Across Dubai, hotel occupancy rates have gone from 95% to in some cases 10-15%.
Combine Emirates’s woes with COVID-19 restrictions and many businesses have permanently closed or face risk of imminent closure. To that latter point, even if a bar like Rock Bottom Cafe was able to attract a crowd, all patrons must remain six feet apart. That makes dancing difficult…
The government infused Emirates $2 billion this spring, the first time it has directly poured in money since Emirates was established in 1985.
It might not be enough.
Emirates is carrying 12% of the passengers it carried at this time last year. That’s about how much Dubai’s economy will contract this year. And COVID-19 cases are ticking up again. In fact, Dubai just set a new all-time record this week for the highest number of new daily cases (1,231). Even as Emirates has offered free travel insurance, few are biting and many cannot due to international border closures.
Dubai is a stark reminder of how important air travel is to the wider economy and what an essential bedrock Emirates is for Dubai.