Dubai Tourism Falls, More Bad News for Property Market

Occupancy rates in Dubai hotels fell to 73% in the first quarter of this year, compared to 90 percent in the previous quarter; the Dubai Department of Tourism and Commerce Marketing has revealed.

The fall is indicative of a wider fall in tourism, which has been put down to the fact that the places providing most of Dubai's tourists; the Eurozone, the UK and Russia being in recession.

"Three of Dubai's key tourist markets -- the UK, the euro zone and Russia -- are in recession, with depressed consumer confidence and rising unemployment weighing heavily against discretionary leisure spending," said HSBC economist Simon Williams.

This is just what Dubai's property market didn't need; more bad news. Tourism is a large part of Dubai's GDP, and it had been hoped that tourism would be relatively unaffected by the downturn that has crippled the Dubai property market.

Dubai property prices are reported to have fallen by 40-50% from their peak already, news like this suggests that the worst isn't yet over and more falls could come. Tourism formed a major part of Dubai's economy, and the great hotels built to accommodate the rising visitor (and property investor) numbers, became attractions in themselves.

It can only be hoped that when economies around the world begin to recover, that Dubai's marketing machine can once again breathe life into the country, or the scenario laid out in the Guardian of the skyscrapers swallowed up by the sands they emerged from may become a reality.