Dubai: Not Built On Sand

AV Magazine

Preparations for World Expo 2020 and Smart City status have put Dubai’s mega-projects back on track with massive AV potential. http://www.avinteractive.com/features/dubai-not-built-on-sand-14-10-2015/

Where else but Dubai can you find Smart palm trees? Las Vegas possibly with which the desert playground is often compared. But not even Vegas can compete with the sheer ambition of the Emirate’s drive to be the world’s show, business and tourist capital.

“Some have labelled Dubai as New York on speed and rightly so,” remarks Jan Tarakji, general manager at Dubai-based Powersoft distributor, Pro Lab. “It is one of the most competitive and fast-paced markets in the world. The name of the game is bigger and better than the guys next door.”

Smart City status

Smart palm trees (see below) dovetail into the emirate’s hope to become the first in the region, if not the planet, to qualify for United Nations Smart City status and to prepare the state for hosting World Expo 2020. The Smart City project, launched in 2014 off the back of winning Expo 2020, intends to make more than 1,000 government services ‘go smart’, and to increase co-operation between the emirate and its residents by 2017.

A key part of the Expo 2020 and Smart City vision is environmental sustainability. The Dubai Municipality aims to transform eight per cent of the urban area into green and planted spaces by 2020. Consequently, green credentials have rocketed up the list of must-haves for AV technology.

“As Dubai inches closer to world Smart City status, demand will grow for energy efficient AV solutions and there will be a large opportunity to meet this demand provided that manufacturers supply environmentally friendly products,” suggests Tarakji.

Opportunities around Smart City status include command and control functions and infrastructure for security and monitoring.  “AV technology is very high on the list of requirements when it comes to making government facilities into smart buildings,” says Mig Cardamone, marketing director, Sennheiser Middle East.

“Smart AV technology is a massive market as each government department has its own requirements,” says Steve Scorse, v-p EMEA, SiliconCore. “They’re all looking for high resolution, seamless large format displays as the hub of their systems.”

High demand

Digital signage is in high demand among Dubai clients wanting to keep connected with potential customers, passengers and guests during their stay. “There are exciting opportunities for digital signage in a wide range of Smart City outdoor environments,” confirms Gordon Dutch, md, Peerless-AV EMEA. “New fully-sealed displays are capable of withstanding high temperatures and harsh desert conditions, making them a viable option for any business wishing to make a lasting impression.”

And making an impression is the name of the game.  The pessimism that engulfed the UAE post-2008 has faded, replaced with an astonishing ramp-up of activity.

“If projects in Dubai were over-hyped in the past, now it is a real adopter of technology with a stronger local skills base and potential to finally realise its ambition,” reports Jamie Adkin, strategic sales manager, Adder.

“We’re again seeing announcements of mega-projects that Dubai had become renowned for, most of which have extensive AV requirements, but hopefully with a little more realism than was previously the case,” says Cardamone. “It remains to be seen whether all of these come to fruition but there is certainly a lot more activity in the pro-AV market here.”

The 2020 deadline has re-animated $12bn worth of mega-projects, say Deloitte. Among them: the world’s largest man-made adventure park (Dubai Design District and Wire World); the 400-hectare Dubai Safari Project; Legoland Dubai featuring 40 interactive rides; and Bollywood Parks Dubai.

“While technology is the primary driver of excess when it comes to the AV industry, scale is also an important driver when it comes to clients in Dubai,” says Tarakji. “Size matters in Dubai.”

Record breaker mall

The largest mall in the world (called Mall of The World) is a $6.8bn, 48 million sq ft temperature-controlled glass-domed development featuring Vegas casino-style streets modelled on Las Ramblas, Broadway, and Oxford Street. Naturally, it will house the world’s largest indoor theme park.

“The theme park and entertainment industries are going through a massive expansion phase,” says Holovis ceo Stuart Hetherington. Holovis is involved in three theme parks, seeing its business double in the region in a year. “The nature of this work is also diversifying, ranging from providing full turnkey e-ticket attractions to interactive dark rides and smaller systems for the Family Entertainment Centre market as well as the more conventional AV work.”

Hotels opening to cater for the influx of visitors include the InterContinental Dubai Marina, Palazzo Versace Dubai, and the Hard Rock Hotel Dubai Marina.

“Clients are looking for an impact from their AV solutions to stand out from the crowd,” says SiliconCore’s Scorse. “Projects in hotels, hospitality, transport and leisure are all geared towards tourism, so these need to make the right first impression and establish each place as a destination, rather than just provide a functional solution.”

“Clients look at AV technology as a facilitator to create this world class experience, and therefore they often demand the best that is available, from optimal screens to the best sounding audio systems,” says Jaffer Sadique, marketing and business development, Mediacast Systems.

Biggest and best

A reputation for delivering the ‘biggest and best’ projects has fostered “an environment of innovation and a can-do attitude that pushes the boundaries of AV technology,” says Cardamone. “The Smart City and Dubai Innovation Hub initiatives show it is striving for a leadership position by adopting the latest technologies. The government wants this to be a part of what Dubai is defined by.”

The city state’s dual paths of tourist mecca and business destination has seen visitor numbers rocket, dwarfing the resident population of 2.1 million. There are steady opportunities in education, medical and especially, municipal transportation, to serve them.

“Looking at Dubai from the outside in visitors may only see the touristic elements,” says Issa Makhamreh, sales director MEA, Navori. “But there are verticals in Dubai which are very advanced in AV with major projects in government, retail and transportation. Most of these fly well under the radar as they are deployed by local companies working closely with the end user from initial project design to handover.”

Dubai Metro is being expanded at a cost of $1.4bn to connect to the Expo 2020 site; the site itself features plans for an underground tube network to link the pavilions; and by 2018, Dubai International Airport will have upped capacity from 60 to 90 million passengers a year.

Residential doesn’t mean nondescript either. Under construction: the Arabian Nights-inspired Aladdin City with three towers connected by bridges; and the Union Oasis with 16,000 sq ft of residential, commercial and retail space, landscapes and streetscapes.

Healthcare

Healthcare is a growing industry throughout the UAE, with Dubai positioned as its hub. Dubai Healthcare City’s 120 clinics and hospitals and a new three million sq ft ‘wellness district’ are primed to attract 500,000 health tourists annually by 2020.  “While it may have taken time for Dubai to catch up compared to other markets in the world, the growth of healthcare and ICT have been significant,” says Sadique. “There are dedicated zones for these, such as Dubai Internet City and Dubai Silicon Oasis which are drivers of these segments, creating requirements for high-end solutions and for which AV is an indispensable part.”

The UAE’s AV industry is projected to grow to $1.24bn by 2016 (from $700m in 2012) driven mostly by large infrastructure projects including, but not limited to, Expo 2020. Dubai is the AV industry’s regional hub with around 50 per cent ($550m) of the UAE’s AV market.

“AV companies here face new competition daily,” says Makhamreh. “It creates a major bidding war and companies need to lower the bottom line, in turn lowering profits and increasing the risk of failure.”

Tarakji reports “well established global players” that lacked a presence in Dubai but dominated the market between 2000 and 2010 “are being pushed out by extremely professional, nimble and highly competitive, locally based companies.” These are more in tune with client requirements and more importantly “are always available to serve their needs,” he says.

“Clients realise more than ever that they need to work with strong partners who have a local presence,” notes Vincent Philippo, Crestron’s UAE regional director. “Not a company from abroad, but someone who can assist them immediately when support is required.”

Peerless-AV has seen its ME business double since it opened a warehouse in the Jebel Ali Free Trade Zone in January. “We’ve seen a very split business,” reports Dutch. “For the volume and entry level market, there is a very aggressively priced, low-end approach. For major projects, we’ve seen good demand for the ‘best of the best.”

Adder recently swapped its long-standing UAE distributor for UK-based control room furniture specialist Lund Halse and has seen enquiries take off. “They spend two to three weeks a month on the ground giving us increased visibility in the market,” explains Adkin.

The government market is huge in Dubai. “I would say the biggest sector in the UAE,” says Scorse. But the private sector is equally energetic. Either way, the keys to success are based on relationships.

“Word of mouth recommendation goes a long way in this market so there is no point biting off more than you can chew,” says Hetherington.

“In the Middle East it’s all about trust,” says Makhamreh. “Clients need a face to face interaction with vendors to gain their trust and assure their presence for after sales support.”

Adkin puts it succinctly: “Trust the people; trust the technology.”

All is not entirely rosy in this desert paradise. The long term decline of oil reserves is the economic imperative behind Dubai’s reinvention but recent sustained declines in petrodollars have eroded government coffers.

“The oil sector represents at least twenty nine per cent of the UAE’s GDP but the drop in the price of oil has impacted business revenues negatively during the first two quarters of 2015,” suggests Tarakji. “Projections vary, but if the trend continues, the period up to Expo 2020 will be turbulent for Dubai and more so for the rest of the UAE and the greater Gulf.”