Even Dubai loses some glitter in hard times

For a few years now, we've been hearing that the new place to be is Dubai. Our magazines have been a glitzy cavalcade of news stories about its fabulous skyscrapers, its home developments shaped like giant palm trees, and its air-conditioned beaches.

Except it's not. The world economy is, well, a world economy, and everyone's connected. The fun-seekers of Europe and Russia, Dubai's primary markets, are just as mired in the recession as everyone else, and their visits to Dubai have dropped. The Dubai party, at least for now, is on hold.

While United Arab Emirates are still reporting good numbers for 2008, those reflect visitors who came and left a while ago. Things aren't so rosy now, and the area's tourism leaders are officially on edge.

With hotel occupancy down 25% from last year at this time, the travel industry is panicking and halving nightly rates. Reports are surfacing that at some hotels, guests are successfully haggling for lower rates. In one case, a luxury hotel that normally stands firm on its $229 rate a night took an offer for $44.