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Dubai bets on lasting tourist appeal

Jul 22, 2008

As the mercury approaches an almost unbearable 45°C, it would appear a strange time to convince the world that Dubai’s next big hotel destination is going to transform the emirate’s tourism ambitions.

But the Atlantis Dubai, a 22-storey aquatic-themed complex on the Palm Jumeirah island, the first of six reclaimed offshore developments, represents a turning point. Its 1,500 rooms feed into Dubai’s growing range of hotels, while its on-site water park is the first in a string of next-generation theme parks the government hopes will turn the emirate into a Middle Eastern Orlando.

Tourism has played an important role in the diversification of Dubai’s economy since the 1990s, when the Emirates airline lobbied the government to build hotels, encouraging a revenue line beyond business travel.

However, as with so many of Dubai’s diversification initiatives, sceptics question whether growth can be sustained, let alone doubled, especially as some of Dubai’s hotels complain of poor occupancy this summer.

Already accounting for 18 per cent of the economy, the government wants to expand the sector further, more than doubling last year’s 7m tourists to 15m by 2015.

Nevertheless, Dubai naysayers have for decades been disproved at every turn. “The only issue for Dubai is can we build enough rooms – we can fill them,” says Sultan bin Sulayem, chairman of Nakheel, the government-owned developer that built the manmade Palm tree-shaped island and then lured Donald Trump to develop a skyscraper on the other end of it from the Atlantis.

Set to open as the summer furnace starts to ease in late September, the Atlantis is a joint venture between Nakheel and Kerzner International. Nakheel owns about 30 per cent of Kerzner, whose 72-year chief executive also believes in the Dubai tourism story. “It’s the weather, hotels, good operators, all combined with great marketing,” says Sol Kerzner. “It’s the combination of these things that take a bit of beating.”

Many of his other developments rely on casinos, outlawed in the United Arab Emirates, but Mr Kerzner is quick to dispel talk that the Atlantis is betting Dubai will in the future allow gambling to help drive tourism growth further.

Britons seem to love Dubai. Of the 1m visitors from the UK last year – the single largest national grouping – two-thirds say they plan to return soon, according to Dubai Tourism and Commerce Marketing, Dubai’s tourism promotion body, which has plans to raise that number of British visitors to 1.5m by 2015.

The UK government’s recent decision to raise the UAE’s terrorism threat to its highest level sparked concern that the emirate’s unblemished security record was in jeopardy, but Ian Scott, DTCM’s UK director, says media coverage of the threat prompted only a handful of inquires to his office about the safety of holidaying in Dubai.

Dubai may also sigh with relief if the arrest of British tourists accused of having sex on a public beach deters the party crowd.

Mr bin Sulayem says: “These rumours and threats are everywhere – no part of the world is immune.”

Over the next few years, Dubai will be rolling out a series of attractions, including names such as Legoland, SeaWorld and Universal Studios and more golf courses and shopping malls that will allow the tourist season to run through the summer months.

But Russel Sharpe, a Dubai-based hospitality consultant, says hotels are slashing rates as demand dries up with the summer onslaught.

“We are looking at a period of some softening in the marketplace – which is a good thing as, in my opinion, prices make the destination very expensive,” says Mr Sharpe.

Most beachfront land is so expensive that developers are reserving it for five-star resorts that do not serve the “bucket and spade” crowd, he says. “Don’t forget the back end of the bus – there is a need for hotel space to be filled by punters who can’t afford five-star hotels.”

Dubai bets on lasting tourist appeal
The Burj Al Arab Hotel in Dubai /

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