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Tourism will lead the economic recovery in Dubai

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Yesterday three large cruise liners were docked at the new Port Rashid terminal that opened in January this year. Perhaps around 5,000 day trippers got off these ships to explore Dubai.

At the same time hotel occupancy in the city is sharply up on the depression of a year ago. Beachfront hotels are running close to capacity again. Only the room rates are down by an average of 14 per cent on a year ago.

Cheaper meal deals

Restaurant promotions have also brought back the local diners who had become disgusted with the high food and beverage prices of the boom years. Many local credit cards bring substantial discounts in restaurants now.

No doubt trade has also picked up in the Dubai ports and free zones this year. But the turnaround is probably not as dramatic as in the tourism sector. This time last year the Atlantis Hotel on The Palm, Jumeirah was practically empty except for security guards, now the hotel is heaving with tourists.

The opening of the Burj Khalifa, the world’s tallest building, in January has certainly helped. This brought a wave of positive publicity after the negative press of the Dubai debt crisis in December.

But there is an old saying that no publicity is bad publicity, and Dubai is certainly well known these days. Indeed, it appears that as hotel rates have fallen people who could not afford Dubai before have decided to come and see what all the fuss is about.

Impressing visitors

Yesterday ArabianMoney met a couple of visitors from The Arcadia docked in Port Rashid and showed them around. They seemed dazzled and amazed by the infrastructure now available in Dubai. It is not just the best in the region but world-class.

People who live and work in Dubai probably become rather immune to the city’s charms and tend to focus on their daily problems. It is sometimes good to be reminded by visitors about the quality of what has been built here.

Perhaps after all the investment in tourism over the past decade, and the fabulous new airport facilities and Emirates Airline should also be included, it should not be surprising if tourism is the sector that leads the economic recovery in Dubai.

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Written by Peter Cooper

March 30, 2010 at 8:02 am

Posted in Culture, Hotels, Travel

Former DIFC governor arrested in fraud enquiry

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Former governor of the Dubai International Financial Centre, Dr Omar bin Sulaiman, has been detained for a week as a part of an investigation into alleged financial irregularities. He is the latest formerly high flying young national to suffer a sudden fall from grace.

Press reports today said no charges had been made at this point, and that the case has yet to be referred to the public prosecutor. Dr Omar was replaced abruptly last November by Emirates NBD Bank boss Ahmed Humaid Al Tayer without an official explanation.

Alleged financial irregularities

According to Gulf News this morning a former high-profile DIFC official, identified only as O.S. is being held for allegedly abusing his post as a public official for ‘financial irregularities amounting to about $13.6 million’. Reporters quickly unveiled his identity.

This is the latest in a string of arrests in the 18 months since the global financial crisis brought the Dubai real estate boom to a sudden stop. As Warren Buffett once famously commented, ‘it is only when the tide goes out that you see who has been swimming naked’.

All financial booms attract charlatans and offer the opportunity to make fast money from what may later be shown to be illegal actions. Yet it is also tragic to see brilliant careers ruined and particularly young stars like Dr Omar.

He succeeded in making two Dubai business free zones stunning commercial real estate successes: the Dubai Internet City, and since 2004 the Dubai International Financial Centre. But of course the international reputation that Dr Omar acquired in the process just makes this investigation all the more embarrassing to Dubai.

Whizz kids out

The fate of Dr Omar and other young Emirati leaders who were perhaps promoted too fast and too young in the boom will cast a shadow over the prospects for the next generation. Already the swing back to older hands is evident with the traditional merchant families of Dubai in the ascendant, and they will inevitably have to lean heavily on expatriates for advice.

The next generation will have a harder time earning the trust of their elders, and will face a longer climb up the ladder. That might actually work out better in the long run. But for those involved it will not be so much fun nor as easy. Experience and grey hair will count for more than it has in the past decade but everyone gets old eventually.

Written by Peter Cooper

March 24, 2010 at 11:56 am

Six new Palm Jumeirah hotels over the next 12 months

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Dubai will open up to six new beachfront hotels on the Palm Jumeirah over the next 12 months, inevitably adding to room price competition and forcing down rates but securing the emirate’s position as the sunshine holiday capital of the Middle East.

The iconic Atlantis Hotel which opened 18 months ago is currently the sole hotel on The Palm Jumeirah Island. It is about to face some strong competition from new luxury hotels.

Luxury hotels

First to launch in the second quarter will be the 410-room Zabeel Saray by Rixos, a development that includes 38 residential villas. Then in October the 293-room, six restaurant Royal Amwaj from Movenpick will open with an all-in guest dining package available (pictured above).

Movenpick director of business development Guy Epsom told ArabianMoney the hotel had received a very good reception at the recent ITB hotel exhibition in Berlin with travel agents saying there was big demand for Dubai now that room prices are down.

The One&Only The Palm is also due to open in October, a 100-unit, Arabic-themed, low-rise development with an over-water restaurant and spa. Last hotel to launch this year will be the Jumeirah Al Fattan.

2011 openings

Still to come in 2011 are the 320-rooom The Emerald Palace Kempinski, opposite the Golden Mile and delayed for two years after the global financial crisis, and the massive Fairmont Palm Jumeirah with associated serviced apartments.

From a business perspective the opening of so many hotels in one location is clearly going to be a major marketing challenge. But at least the Palm Jumeirah Island is among the best known places in the Middle East and has already benefited from huge global publicity, good and bad.

Actually it is probably the European sunshine destinations that will feel the most heat from this competition. Dowdy old hotels with poor maintenance are struggling to keep pace with the super luxury offerings from Arabia, and can only compete on price which undermines their profitability.

All-in dining package

Movenpick is being clever by offering an all-inclusive dining and beverage package – Club Gulf rather than Club Med. This will go a long way to counter the impression of Arabian hotels as overcharging for food and drink. But doubtless all this new competition is going to force down bar and restaurant prices in the future.

For holiday makers there are going to be some great deals as the Dubai hospitality sector takes another leap forward, albeit not such a profitable one as in the boom years.

Written by Peter Cooper

March 24, 2010 at 8:39 am

Alcohol back on the menu in Dubai restaurants

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In a rapid U-turn the Dubai Municipality has reversed a ban on alcohol in food served in local restaurants and said there had been ‘a misunderstanding’. On Sunday an official had told several local media that the ban was being enforced and the story made headline reading in Dubai.

Now there has been a clarification that states only that restaurants are required to declare the presence of alcohol in food on their menus in Arabic and English, and that regulations necessitate the separate preparation of such foods in kitchens.

Lunchtime investigation

Hotels were certainly confused by the news stories. ArabianMoney ordered a red wine sauce on a steak in the Rib Room at the Emirates Towers Hotel and met with no problem. The manager said the hotel had not received any order to stop serving food made with alcohol and would not do so until it saw a written instruction.

Chefs led by Uwe Michaeel, president of the Emirates Culinary Guild and director of kitchens at the Radisson Blu Dubai Creek where he has been working for over 15 years, objected to having to prepare dishes without alcohol. This is a standard ingredient for many famous Western and Asian specialties and would have limited the range of Dubai cuisine.

As it is Dubai is a multicultural melting pot with Indians probably just in the majority. The local population is 90-95 per cent expatriate and diluted further by the presence of large numbers of tourists. Dubai vies with Egypt as the region’s biggest tourist destination.

Multicultural city

Even regional tourists choose Dubai for its relaxed and tolerant lifestyle, and the reaction to the alcohol in food ban is a reminder that the city has built its wealth and reputation on its multi-cultural approach.

The official religion of Dubai is Islam but only a minority of residents are Muslim. This helps to explain why Dubai remains such an open and tolerant, multicultural society and has become the hospitality centre of the Middle East as well as the location of choice for multinational companies and banks.

Having spent hundreds of billions on its infrastructure over the past decade Dubai is not about to risk its future prosperity for the sake of a ban on boeuf bourguignon or any similar misunderstandings.

Written by Peter Cooper

March 23, 2010 at 9:43 am

Dubai tightens up on public morality with no alcohol in food

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Dubai restaurants have been banned from using alcohol in cooking, even when the existence of alcohol is warned on the menu, in the latest minor tightening up of public morality in what remains a Muslim society despite the overwhelming numbers of non-Muslim expatriates and tourists.

On the same day that this story surfaced, The National also reported that no new licenses are to be issued to massage parlours until further notice after ‘dozens were found engaging in illegal activities’. In Dubai it is already illegal for women to massage men – something quite normal in Doha and Abu Dhabi which might be seen as stricter cities for public morality.

Revolting chefs

The chefs of Dubai are up in arms at the restrictions on the use of alcohol in cooking which is common for many popular European and Asian dishes. They hope the ban might be relaxed in return for better labeling.

It is hard to say whether sterner public morality is some kind of condition for financial support from more conservative neighbors, or just a normal reaction to deteriorating moral standards. It could be just a reflection of a harsher economic climate and less tolerance for others.

The notorious Cyclone Club was closed several years ago, for example, when its lewd reputation became an intolerable embarrassment. Then again the opening of a new mosque in the Meadows and Springs this month is just a normal part of city life, not the start of a shift to militant Islam.

Delicate balance

However, in a multi-cultural society the harmony of the local community requires a delicate balancing of moral standards. There is no question of imposing one religion on all citizens and the rights and beliefs of everybody have to be taken into account.

The rules on behavior in public places have been in focus recently with a non-married couple jailed for one month for kissing in a restaurant at 2am in the morning. It is always difficult to draw a line on public morality but many Westerners thought the penalty inappropriate. They wondered about the woman who reported the incident, out with her young children way past their bedtime.

That Dubai appears to be undergoing a slight reversion to conservatism might be welcomed by many appalled by some of the excesses of the economic boom. But the city has made its wealth from tolerance and diversity and nothing should be allowed to threaten this legacy. Getting chefs to change their menus is a step backwards.

Written by Peter Cooper

March 22, 2010 at 10:49 am

Art Dubai and the new vision of Dubai 18 months after the crash

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Art Dubai 2010 presented a new vision of contemporary Dubai 18 months after the credit crunch that brought the real estate boom to a sudden stop.

Anybody who thought this city might be destitute ought to have looked around Art Dubai last weekend. Most of the city’s leaders certainly did so.

18 months post-crash

For 18 months since the $20 million party to open the Atlantis Hotel on The Palm Jumeirah symbolized the height of excess, Dubai is a more sober city. But there is still an awful lot of creative and entrepreneurial spirit in Dubai, and that magic ingredient to commerce, money.

Many investors may have lost their shirts in the real estate boom. Yet the splendid modern infrastructure of the city remains. Art Dubai was held in the Madinat Jumeirah, a sprawling complex of beautiful Arabian themed hotels and a souk, opposite the iconic Burj Al Arab hotel.

It was not clear how much art was being sold, although ArabianMoney saw one elderly national buying three ladies in black several AED500,000 hand-painted watches. The artist who painted these time-pieces was giving a display of painting under the microscope.

Yet the surrounding hotels obviously benefited from this modern art fair. The sponsors HSBC and Abraaj Capital benefited from the prestige of association. And Dubai has an event that will probably gradually morph into something like the Royal Academy Summer Exhibition. It is another leap forward for a city that had no defining annual art show until four years ago.

Boom and bust

Of course, it will be some years before anything like the recent Dubai real estate boom can happen again. These booms do tend to be once-in-a-generation transformations that are followed by long consolidation periods.

But if anybody doubts that a global hub city like Dubai is going to bounce back then they should have taken a look at Art Dubai 2010.

Modern art is also presently in recession with auction prices on the floor. So it makes sense for the galleries to come to their potential buyers rather than expect them to journey to overseas.

Increasingly, multinationals and banks are also going to relocate to Dubai for the same reason, and to avoid taxes and take advantage of much lower real estate costs. That is the new vision for Dubai.

Written by Peter Cooper

March 21, 2010 at 10:04 am

‘Road to $5,000 Gold’ published on Kindle

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ArabianMoney editor and publisher Peter Cooper announces that his latest book ‘Dubai Sabbatical: The Road to $5,000 Gold’ is now available as an e-book from the Kindle Store (click here).

Written by Peter Cooper

March 19, 2010 at 8:13 am