Dubai businesses brace for tough Q2-20, with many expecting over 75% sales decline

Dubai: A majority of UAE businesses – 56 per cent – are bracing for a drop in revenues by more than 75 per cent in the second quarter, with those in the travel and tourism space the worst affected.

Disruption in cashflow and being cut-off from access to customers in the UAE remain the biggest concerns for these businesses, based on a survey by Dubai Chamber and shared with business houses.

Among key sectors, all those from the travel and tourism sector said their sales will be down by more than 75 per cent, and next came those real estate, with 62 per cent saying they will see declines by the same level between April to end June. And 56 per cent of respondents in the hotel sector stated their sales would dip by this level.

What’s most disturbing is that 48 per cent of respondents in the survey said they “don’t have a plan” to handle a global disaster. While 37 per cent said they were developing such a plan, only 15 per cent said they were actually implementing one.

Industry sources say that the UAE’s investments in the telecom and digital infrastructure ensured businesses and organizations were able to switch most of their processes online once it became clear that the COVID-19 was not confined to be a China issue.

Remote work, remote everything

In this regard, businesses, local and international, managed to get their people armed with means to work remotely. It helped even those businesses that had to manage everything on the fly.

Fear of imminent failure

But businesses and their owners maintain short-term fears about what’s next. A fairly high 27 per cent of respondents said they fear going out of business within the next month, and 43 per cent said it could happen in the next six.

Only 9 per cent rated such a possibility as “low-risk”.

Who participated in the survey

Dubai Chamber conducted the survey among Dubai-based companies between April 16-22 to collect information on how COVID-19 pandemic impacted them and what challenges companies faced.

The survey was answered by 1,228 CEOs/managers of companies across sectors. The companies also provided measures taken by them to mitigate the impact of COVID-19 on employees and operational continuity.