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.
Work on a 3,281-foot-tall tower was just halted, ending (at least for now) the emirate's bid to draw visitors to the "Kilometer-Tall Tower." Plans for a Trump Tower were killed last month, and countless other projects have also been quietly shuffled to the back burner. Still on, for now: versions of Busch Gardens, SeaWorld, Universal Studios, and Legoland, all still many years away from opening.

The hangover from the tourist building boom is starting to set in on a wide scale. Dubai's government just reported its first budget deficit. Tourism prospects couldn't have been helped much when last year, two British tourists were tossed in jail for three months for having sex on the beach (not the cocktail -- the real thing), diminishing the Middle Eastern locale's reputation as a place to strip down and soak up sun.

For the super-rich for whom such things don't matter much, Dubai, with its ultra-luxury hotels (average rate: $375 a night -- the world's top average) and glittering shopping malls, will still be a lure for some as long as the sun still shines there. As prices approach more earthbound levels, though, perhaps more Americans will finally be able to check the place out. For now, though, Vegas shouldn't cash in its chips just yet.

Update, 2/4: Busch has now shelved its plans to build four parks, including Busch Gardens, and SeaWorld, in Dubai.
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