p5 news Dec4 2/12/09 22:06 Page 5
ttglive.com
dubai crisis news
Towering debts
Could the crisis
hit tourism?
THE CRISIS in Dubai has been
spark discounts
triggered by the emirate’s
largest state-backed company
Dubai World’s request to delay
payment on debts of $60 billion,
provoking fears it will default on its
obligations. It has appointed accountants Deloitte
Hotel suppliers in Dubai are offering up to 50% off to
to advise on a restructure, which could involve
entice UK holidaymakers. Martin Ferguson reports
sales of assets. Dubai World’s subsidiaries include
property developers Nakheel, which is behind the
Palm islands and The World, and investment arm
AGENTS have a “golden opportunity”
C
attract business. Any press Istithmar World, which owns the QE2.
to profit from the financial crisis in
O
like they have had this week
Dubai by selling premium products
STO
VER
will have an adverse effect
DEVELOPER.
at discount prices.
R
Y
on confidence, but if they Nakheel default doubts spark crisis
They can benefit from the crisis – get their discounting policy Dubai World’s property development subsidiary,
triggered by the huge debt of state- right they will soon bring the Nakheel, triggered the crisis when it admitted it
backed firm Dubai World – because suppliers business back.” could default on a $3.5 billion bond due on
are unveiling big discount offers to fuel demand. Dubai specialist Gold Medal’s sales December 14. It owns some of Dubai’s flagship
Thomas Cook chief executive Manny and marketing director, David Robinson, properties such as Palm Jumeirah, Palm Jebel Ali,
Fontenla-Novoa said this week prices to Dubai predicted there would be “great winter Palm Deira, The World and the resort Atlantis
had already fallen by up to 7% and rates were deals” as there was plenty of capacity. Dubai. It has also started building a tower it claims
continuing to come down. And Travel Counsellors managing will be higher than the Burj Dubai (pictured).
Julia Lo Bue-Said, leisure director at director Steve Byrne said he expected
Advantage, said the crisis was a “golden demand from “savvy customers” to
AIRLINE.
opportunity” for agents to sell premium products rise as they spotted bargains, adding Emirates insists it will not be sold off
at knockdown prices. that that would help Dubai tourism Dubai’s airline Emirates is part of the Emirates
“The UK is a strong market for hotels in the come through the crisis. Group, which is controlled by the Dubai govern-
Middle East. Hoteliers must put more deals in Another agent, Linda Boyd, director ment, but not part of Dubai World. The airline in-
front of agents to encourage people to keep of King World Travel, said “great sists it will not be sold to help solve the debt crisis,
travelling to the region,” she said. offers” to Dubai were already in the but speculation continued all week that Emirates
“Everyone stands to win out of this situation.” market and Emirates fares had become could be used by the Dubai government as collat-
One tour operator, Rupert Thomson, managing more competitive in recent weeks. “It’s eral against any
director of Light Blue Travel, said that was all good news for us as Dubai is such a rescue package
starting to happen as one of the Dubai hotels it great product to sell.” from Abu Dhabi.
offers was about to promote a 50% discount.
“This is the sort of level they are going to
HOTEL CHAIN.
■ Thomas Cook annual results, p15
‘High occupancy’ at Jumeirah Hotels
Jumeirah Hotels is owned by Dubai Holdings, which
Scott: 15m tourist target on track
claims to have remained unaffected by the property
crisis. In a statement it said: “Jumeirah continues
to enjoy an excellent flow of business with high
IAN SCOTT, director of Dubai’s department of However Shaun Hinds, commercial occupancy and high customer satisfaction.”
tourism and commerce marketing in the UK, director at The Co-operative Travel,
insisted that the fundamental economics of the said property development under-
QE2.
emirate were sound and it would meet its debts. pinned Dubai Tourism’s plans, so Grand lady of cruise in stormy waters
He said media coverage of the crisis was any hold-up to expansion would have The QE2 is caught up in the crisis less than a
“overblown” and confused the commercial firm an impact on the industry, even it year after leaving the Cunard fleet to become a
Dubai World with the government of the emirate. was just a “potential hiccup”. floating luxury hotel in Dubai after it was sold to
The government remained committed to “Developers are reliant on selling Istithmar in 2007. Little refurbishment work has
attracting 15 million visitors to Dubai by 2015, property to UK and overseas resi- been carried out since and there is speculation
which was shown by openings planned for next dents, so if the property develop- that rather than sailing to
year such as the Burj Dubai on January 4, and ment machine grinds to a halt it South Africa for the
the next hotel on Palm Jumeirah, the Ottoman could be detrimental to World Cup next
Palace, he added. tourism,” he said. year, it could be sold.
04.12.2009 05
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