The city state Dubai is dubbed a safe city in the
Gulf where tourists and business travellers find many places to visit and many deals
to strike. Although the 2009 debt crisis has almost demolished the ability of Dubai
to project the image of successful city state it has not exhausted the spirit
of the ruler and the people of Dubai to bounce back. Yet something went
missing:
Yes! It is business strategy that went missing. The metropolis had
three areas of revenue generation: tourism, commerce (domestic &
international) and the logistics. The latter was highly visible with ports as
well as cargo storing & handling facilities spread throughout the country.
To support these three pronged revenue drivers Dubai relied more on her
property sector and the carefully planned and strictly monitored
administration. However, there was no visible sign of any business strategy
being executed.
Tourist arrival that braced on 16 million in 2018
crumbled to 8.4 million in 2019 slicing off almost half of the previous figure.
Out of the visitors India accounted for 2 million, most of whom are medium
spenders and Saudi Arabia about 1.5 million whose overnight stay is fairly
shortened one despite their spending spree. Traffic in the shopping malls was
high. None the less the volume of purchases was not commensurate with the high
traffic.
Number of nationalities throngs the busy streets in
Dubai new city as well as the old quarter where the famed gold souk enjoys
fealty. In fact, more gold jewellery is bought in Dubai than in any other city
in the world despite heavy tax imposed on the sale of gold. The classical tactics
of foregoing high margin to improve sales is resorted to by the gold souk in
particular and most traders in general leading towards razor thin profits for
them.
Real estate, the lead sector that supported economic
drivers is the next casualty. Even though real estate prices boomed in 2014
this could not be sustained. A free fall
of almost 30% completely wiped out the margin of the property developers.
Moreover, the re-sale value of prestigious villas almost dropped by half.
Unless Dubai set in motion of formulating and
implementing a viable business strategy the revival of Dubai as tourist and
commercial centre is questionable.
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business
Strategist
No comments:
Post a Comment