Dispatch, Dubai 2: Hotel occupancy down, but confidence isn't

Dubai Dispatches series

jeriOMANUAE162x120Travel Weekly's Jeri Clausing is on a trip to Dubai and Oman. Her second dispatch follows.

Dubai has always been near the top of my list of places to see, mostly because as a college student I spent summers visiting my parents in the much more conservative Saudi Arabia, where my father worked.

So I have long been curious to see the more liberal side of the Middle East. A flight attendant friend of mine refers to Dubai as Las Vegas on steroids.

My first impression on the drive from the airport was that Dubai is more like L.A., with lots of modern buildings but not as many lights as Vegas, and no fake Eiffel Tower and such.

But Dubai certainly has its share of massive hotels like Vegas, not to mention the man-made Palm and World islands.

"Biggest" and "first" seem to be integral parts of Dubai's vision. The Burj Dubai will be the tallest building in world. The brand-new Dubai Mall claims it will have more shops than any other mall in the world. Dubailand will be bigger than Disney World.

The fountains outside the Dubai Mall shoot higher than those at the Bellagio. Near the port is the world’s largest aluminum plant. And so on and so on.

The big question is this: How long can the building continue? Tourism officials say the vision of Dubai's ruler, Sheikh Mohammed bin Rashid al-Maktoum, is only 10% complete.

Indeed, the city’s skyline is dotted with construction cranes. But many of them are idle these days.

Sentences often begin with "before the credit crisis." Projects already announced are all still on track, insists Eyad Ali Abdul Rahman, Dubai's commerce and tourism spokesman. Many in the planning stages, however, are on hold indefinitely.

Rahman admits he expects the recovery to be slow. But he refused to ponder whether the global economic meltdown would alter the long-term plans for Dubai, saying only that the sheikh is a "genius."

He points to visitor numbers, which he says are up this year. The total number of hotel guests was up 7.5% in the first quarter compared with the same period last year, he says.

But hotel rates and occupancy are definitely down as new hotels continue to open. Some 50,000 new hotel rooms came on line last year.

Some say room discounting, which reportedly has gone as high as 60%, is a good thing because prices had risen too high in a city that brags the most luxurious and expensive hotels in the world.

Jumeirah chief Gerald Lawless told the Gulf News that his company had offered discounts of up to 30% on all but its famous Burj Al-Arab hotel.

DUBAI-JumeirahBeachHotelLawless says average daily rates are now about $570 at the company's luxury beach resorts, the Jumeirah Beach Hotel and the Madinat Jumeirah.

Even at those prices there seems to be plenty of visitors, at least at the beaches.

I was surprised to see a crowded lobby and aquarium at the newest massive resort, the Atlantis Palm, which was built as a gateway from the Arabian Sea to the man-made Palm Island. Resort officials said occupancy is in the mid-70s.

And Jumeirah officials say occupancies at their beach resorts, which were in the 70s earlier this year, are back in the 90s.

Lawless, however, refused to tell the Gulf News what the occupancy was at the Burj.

At the Jumeirah Emirates Towers, the business hotel where I am staying, a hotel worker says occupancy is a mere 48%.

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