The news of Dubai’s financial crisis seems to have no fact. Though the recession in US has affected the state, it has sufficient reserves to tide over the situation. The housing and the financial sector is the most affected.
There was a time when the construction in the emirate seemed to have no end. The sounds of the construction were omnipresent even in the night. This all has come to a halt resulting in unemployment. The prices of the property have eroded significantly. Hotel room rentals have also come down. The boom in this sector is a thing of past now.
When the real state sector sank in, the Dubai hotel industry was in a state of shock.A number of hotels in Dubai were planned by the urban planners, and have overestimated hotel needs. Asia-Asia, planned to be the world’s largest hotel with 6500 rooms, part of the Badawi Project at Dubailand. The rentals of many hotels in Dubai are still high enough, even for the Westerners. A report stated that Dubai office space is the tenth most expensive in the world. Clearly, to revive the drpping economy, it will have to make a lot of things cheaper. This will include everything from parking fees to the general cost of living not only for Western expatriates but also for the Indians, Pakistanis, Bangladeshis, Filpinos and a host of other nationalities that manned its various business sectors from shops to supermarkets. Otherwise they will simply not be induced to come back.
It will take time for the Dubai hotel bookings to reach its full capacity once again. The entire Dubai hotels have slashed their rates in order to be in the race. The fierce completion for survival in the industry is proving to be a boon for the customers.
It is evident that the recovery in the economy and hotel industry will depend on many factors like doing business,construction etc. There is a report that the news that rentals for residential property have fallen 38 percent since 2009,with 18 percent decrease in Abu Dhabi.
The good feature of the story is, the recent increase in the investing activities is a good sign of recovery.Exess liquidity and easy moneatary measures resulted in the low interest rates. Dollar depreciation led to flow money out of banks into property.
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