Economy

Dubai reopens to tourists: 'We have to be realistic' but 'confident' on sector rebound

Key Points
  • Dubai reopened to international tourists on Tuesday, in hopes of a much-needed boost to an economy hard hit by the coronavirus.
  • Before the pandemic struck, the emirate expected 20 million visitors in 2020. Tourism accounts for 11.5% of Dubai's GDP.
  • Dubai sees its aggressive testing and sanitization campaign, from hotels and malls to airports, as playing a major role in its reopening.
VIDEO2:5602:56
Be 'realistic' about pandemic impact, CEO says as Dubai reopens to tourists

DUBAI, United Arab Emirates — Dubai opened its doors to tourists Tuesday after nearly four months of closed borders and grounded flights, the latest in the desert city's efforts to revive an economy slammed by the coronavirus pandemic and deflated oil prices.  

The glittering commercial capital of the United Arab Emirates, known for its high-end hotels, balmy beaches and superlative attractions like the world's largest mall and tallest building, is among the first Middle Eastern destinations to restart tourism. But it comes at a challenging time: air travel remains at multi-decade lows, many would-be travelers fear catching the virus, and the Gulf region's infamous summer temperatures are hitting scorching levels of 100 to 110 degrees Fahrenheit. 

Nevertheless, Dubai Corporation for Tourism CEO Issam Kazim is confident. The emirate has invested heavily in health and safety measures, he told CNBC, and is ready to welcome restless travelers who've been grounded in their homes for months. 

"We're very excited about this because tourism is a key pillar for Dubai," Kazim told CNBC's Capital Connection. "We have been making sure that the public and visitors' health and safety is of utmost importance." Tourism accounts for 11.5% of Dubai's gross domestic product. 

Addressing challenges of the current climate — both in terms of health and weather — Kazim was prudent but hopeful. 

 "I think we have to be realistic. What happened on a global scale, it's not something any one of us would have imagined," he said. "We of course still are very confident, optimistic in a growth surge, and of course we've made sure that during this period of time... Dubai remains top of mind." 

In an effort to achieve this, Dubai Tourism launched a series of marketing campaigns, one of which, from June, was called "We Will See You Soon" and promised to welcome visitors in the near future. Its latest rendition, "Ready When You Are," is a showcase of Dubai's most famous attractions and adrenaline-filled activities announcing that tourists are welcome once again.  

"This has helped us again to rise up on the search lists across different digital platforms, which means that this has been getting the positive impact that we were after, and we've worked with our friends and visitors, whether they're influencers or others," Kazim said.  

Already, social media influencers are taking up the opportunity: Nas Daily, a travel vlogger with 1.8 million Instagram followers, has been posting Instagram Live videos this week from the Burj Khalifa and showcasing his visits to iconic Dubai landmarks. It's not clear whether his visit was sponsored; he did not reply to a CNBC request for comment.

Tourism sector fighting for a comeback after a devastating three months

Dubai has one of the most diversified and non-oil dependent economies in the Gulf. It relies on sectors like hospitality, tourism, entertainment, logistics, property and retail — all of which saw business plummet, not just in the emirate but the world over, as government-mandated lockdowns were imposed to stem the spread of the virus.  

During Dubai's strictest lockdown period in April, when all but essential businesses were shut and residents had to apply for police permits to leave their homes, 74% of local travel and tourism businesses surveyed by the Dubai Chamber of Commerce said they expected to go out of business in the next month. 

Data is not publicly available as to how many tourism businesses have had to close permanently. But research firm STR Global estimated in May that some 30% of jobs in Dubai's hotels alone would likely disappear over the summer months until demand rebounds. 

Some hotels have closed altogether, while major brands like Atlantis and Le Royal Meridien have seen bookings pick up after offering special discount packages to residents who want a luxurious staycation away from their homes. 

Dubai sees its aggressive testing and sanitization campaign, from hotels and malls to airports, as playing a major role in its reopening. It was recently awarded a Safe Travel Certification from the World Travel and Tourism Council, and it plans to offer Covid-19 testing to every arrival that doesn't provide a recent negative test result. Quarantine will only be required for those that test positive, though travelers will need health insurance covering the virus or risk bearing the costs of the quarantine. In terms of whether Dubai would bar visitors from high-risk countries, as the EU has done with Americans, Kazim said that was still being studied.

An abra driver wears protective gloves and a face mask on March 18, 2020 in Dubai, United Arab Emirates.
Francois Nel | Getty Images

Notably, UAE capital Abu Dhabi remains closed to tourists and even to Dubai residents who don't provide a recent negative Covid-19 test result. That means visitors to Dubai can't make the 90-minute drive to see the iconic Grand Mosque or the Louvre Abu Dhabi. But that comes down to a difference in strategies, Kazim said.

"From a Dubai perspective of course we put our measures in place which align with the UAE's overall approach, but I guess every emirate also has their own method of reopening, their own plans and strategies for reopening as well," he said.

Dubai's tourism authorities will have to wait for more data to come in before they can assess the reopening's success. But Kazim and his team believe this will be a welcome opportunity for travelers after an entire season in lockdown. 

People "are looking at the next destination," he said. "They've been locked up in their homes for quite some time, and they want to get out and about again."

VIDEO2:5902:59
What investors should be doing during the pandemic