Opinion: Is Dubai going off the boil?

Danny Rogers, editor, PR WeekDubai knows how to throw a party. Last week it threw a £13.5 million shindig to launch the Atlantis the Palm hotel.

It was organised by South African entrepreneur Sol Kerzner, who invited 2,000 guests, including Robert De Niro and Denzel Washington. Kylie Minogue played a set at the party.

As one newspaper journalist wrote on Friday, having clearly enjoyed the largesse of the night before: “There’s nothing shy about the Atlantis. If it were a person, it would be Simon Cowell.”

Indeed, there’s nothing shy about Dubai as a destination, but one wonders whether it may be beginning to sober up a little, and a rather nasty headache may be kicking in.

The last time I was lucky enough to visit the gleaming emirate was five years ago, on a British Airways press trip. At that time celebrity icons such as David Beckham and Formula 1 driver Michael Schumacher were said to be splashing £5 million each in apartments on the Palm Jumeirah – the world’s biggest artificial island – before it had even been built. Jumeirah beach was a haze of sand from the manic construction, and tourism was in a euphoric haze of success, as wannabes planned their holidays in this new land of plenty.

Today, however, a four-bedroom villa on the Palm is now selling for closer to £1.8 million. In fact, property prices are falling throughout Dubai, as fears grow that the global recession could even be affecting this burgeoning economy. State-owned developer Nakheel is also said to be scaling back work on the Palm Deira project, the largest of the three palm archipelagos.

Dubai has added hundreds of miles to its coastline in the past five years, as well as dozens of five-star hotels, but could supply be starting to exceed demand?

Not only have many of the global super-rich been stung by stock market collapses around the world, some UK tourists are now finding Dubai prohibitively expensive.

Airline tickets have risen significantly over the past year, not helped by the demise of challenger entrants such as Silverjet. And the more recent fall of sterling against the dirham could have pushed holiday costs up by as much as 20%.

Don’t get me wrong, Dubai is still a shining frontier for the tourism sector. It is full of innovation, my experience was that the hotels were top-notch and the service levels on a par with Southeast Asia.

But it could be time for its tourism chiefs to stop partying for a moment and take stock of a fast-changing market.

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