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Bad Economy Gives Dubai a Good Kick in the Shins

January 22, 2009 at 11:08 AM | by | Comments (0)

The blue skies of Dubai's tourism boom have darkened with the faltering economy, and now the proud Emirate is having to descend its high horse in order to keep visitor numbers and room rates up. Although we cannot expect Dubai to publicize any statistics regarding the drop, rest assured that the hotel specials and package deals are on the way as tremors of the worldwide economic crisis create cracks in Dubai's gilded foundation.

Since nearly 4/5 of Dubai's population are expats and the source of the Emirate's wealth has shifted from oil to tourism, every Dubai Dirham spent in the world's largest shopping mall or the on the world's tallest building makes a difference for the country's future as a global hotspot. No time is more crucial than right now, as Dubai hosts its annual shopping festival from January 15 to February 15, where over 6,000 retailers pull out all the stops to grab both the interest and cash of those who can still afford to freely spend on luxury items.

Of course the recent temporary closure for "security reasons" of the US Consulate in Dubai isn't helping matters, and it's already understood that a decline in corporate travel for 2009 will mean major struggles as the year progresses. It does seem, however, that Dubai has been overdue to take a punch in the gut. Anwar Abu Monassar, General Manager of a Dubai-based tour operator, sums up the situation best:

In August, Dubai's rates were the highest in the world. I am not happy when I see rates that are so high. You are limiting yourself. In just ten years hotel rates went from $50 a night to $1,500 per night. Today we have so much supply, but four months ago we were all crying because there was no supply. I think the market will find a better balance when all of the new hotel projects being built are open.

Let's not even get into the debacle that is Dubailand, the amusement park/everything world plagued by delays from the get-go. They've been working on that thing and it's 6,500-room hotel--which will be the largest in the world--since 2003, with no end in sight. Let's just hope that they don't sink their newly-acquired QEII due to budget constraints.

Related Stories:
· Dubai Hotels Seeks to Lure Guests With Discounts [AME Info]
· Global Woes Hit Dubai's Fragile Economy [BBC News]
· US Consulate in Dubai Closes for Security Reasons [Reuters]
· Dubai Travel coverage [Jaunted]

[Photo: hopehubris]

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