Industry leaders believe around 60-70% of business will be recovered in H2 in post-summer period
Corporate leaders and senior industry executives in the UAE are confident to recover incurred losses due to the coronavirus outbreak this year and said that businesses will do soul-searching over the next couple of months to cope up with the impact of Covid-19 while most of them believe that their sectors will reach pre-pandemic sales level in the first half of 2021.
Though the trend curve has moved upward a bit, they believe that around 60-70 per cent of business will be recovered in the second half of this year, when activity traditionally picks up in the post-summer period.
With local and international carriers also expected to resume their regular flights in the coming weeks, this will result in increased tourist inflow into the country, giving fillip to retail, gold and jewellery, tourism and hospitality sectors.
"We expect sentiments to begin improving in third quarter. By the end of September when economic activity picks up, we will match hopefully 60-70 per cent of business achieved during the same period last year. By second quarter of 2021, business will be as usual and hopefully normalcy return, reaching pre-pandemic period," said Tawhid Abdullah, chairman of the Dubai Gold and Jewellery Group.
In the second quarter, companies have managed reduction in business costs with closures, cutting salaries and with support of the government, he said, adding that "if companies manage to achieve break even, it will be good. Forget profits this year".
He pointed out that rise in gold prices have also helped gold and jewellery sector companies to sustain better in these tough times.
"We have seen good understanding from banks but we hope that there will be some initiatives from landlords and shopping malls as well," he added.
Baiju Kurieash, consultant to Dubai Shopping Malls Group, said with the gradual reopening of the economy, businesses will pick up and sustain momentum through the stages that are to follow.
"It is safe to assume that we are building up towards fourth-quarter business. The revised retail calendar with Dubai Summer Surprises running from July 9-August 29 is significant for the retail sector to address the pent-up demand and this is an important milestone to work towards," said Kurieash.
He pointed out that measures that help business to grow back are rent relief, loan waivers or deferrals, reduced cost of licensing, staffing and relaxed employment rules by allowing freelance jobs and short-terms contract, among others. "Until then for every business, saving cash is the most important," he added.
Farhad Azizi, chief executive officer of Azizi Developments, is confident that Dubai will be one of the first markets worldwide to see a very pronounced rebound, helped by impactful initiatives, policies and regulations announced by the government.
"With the economy and businesses worldwide beginning to open up, we anticipate a strong uptick in demand and sales that will become apparent by fourth quarter of 2020. This is when we believe pre-pandemic levels will be reached, and then exceeded," added Azizi.
Paras Shahdadpuri, chairman of Nikai Group, says coronavirus is now a part of "our life until a vaccination is developed".
"This may easily take another six months or the end of 2020. I feel that the most affected industries would be aviation, hotel, restaurant and hospitality related activities, and its snowball effect on tourism, retail and real estate," he added.
In order to restore investor confidence, he suggested that this is the most opportune time to open up 100 per cent ownership for retail and wholesale trade. "This will be a game-changing step and will provide unprecedented boost to sagging business activity. This measure will also attract more FDI and provide huge confidence to investing community," added Shahdadpuri.
Antonio Gonzalez, CEO of Sunset Hospitality Group, said hospitality industry was one of the first to be affected, and will be the last one to recover.
"A demolishing combination that has wiped billions in losses across hospitality companies in the UAE. For Sunset Hospitality, we have endured millions in losses over the last two months," said Gonzalez.
"We are already experiencing a small recovery, which will accelerate over the next six months. However, due to travel restrictions and economic impact of the pandemic, we do not expect a full recovery until the third quarter of 2021," added Gonzalez.