The Wall Street Journal has a fascinating story on Dubai today, which, it notes, is still recovering from a "spectacular" property-market collapse that scuttled many extravagant projects. But in spite of the economic concerns, plans are underway for a luxury underwater hotel, at a cost of as much as $120 million.
The reason for the newfound confidence: Tourists are flocking in huge numbers to Dubai, seen as an oasis of calm in a tumultuous region.
The city's hotel developers and investors are benefiting because other traditional holiday locations in the Middle East—like Egypt, Tunisia and Bahrain—are battling, or recovering from, political and civil unrest. In addition, Dubai's government continues to invest aggressively in its ambition to be a top global holiday destination.
New guest arrivals rose to 2.6 million in the first quarter, the latest figures available, up 9 percent from a year earlier, according to Dubai's Department of Tourism and Commerce Marketing. The number of nights that guests stayed surged 22 percent in the same period, resulting in a 24 percent jump in hotel revenues.
To meet this demand, about 5,000 new guest rooms will be completed in Dubai during 2012—or about 54 percent more than will be added in Manhattan in the same period, according to property consultant Jones Lang LaSalle. By comparison 2,308 were delivered in Dubai in 2011.
Nearly every major luxury operator now has a presence in Dubai. On Monday, state-owned developer Istithmar World said it would renovate the ocean liner Queen Elizabeth 2, which it bought five years ago at the height of the economic boom, and convert it into a luxury 300-room hotel.
Hotel executives say they expect Dubai's tourism industry to be more resilient. "These are great times in Dubai," says Guido de Wilde, senior vice president and regional director for U.S.-based Starwood Hotels & Resorts Worldwide. He calls Dubai "an integral focus in our overall Middle East growth strategy." Starwood manages 15 hotels in Dubai, making it the largest concentration of Starwood hotels in any single city outside New York.