DUBAI |
Besides businessmen, tourists are staying away from travel hotspots such as Egypt’s Sharm el-Sheikh, now known as the beach town where President Hosni Mubarak fled at the height of the uprising. Tunisia, seen as ground zero for regional unrest, is also off the tourist map.
“We changed our plans when we saw TV pictures of the huge rallies and violence in Egypt. We originally wanted to head to Sharm el-Sheikh,” said Reinhold Fleischhacker from Germany, as he boarded a sightseeing bus at the Dubai Mall with his family.
Dubai has world’s tallest building, Burj Khalifa, the Gulf’s only indoor ski slope and has built an artificial palm-shaped island complete with resorts.
Even more extravagant projects were being dreamt up when the cranes came to stop and construction sites fell silent when the asset and property bubble burst as the global financial crisis drew easy money away from Dubai and the region.
The unexpected influx of business and tourism — in other words cash — is a welcome boost for the emirate, which has struggled with an estimated $115 billion debt thanks to the collapse of the real estate market.
The International Monetary Fund expects the Dubai gross domestic product to rise by 2.8 percent this year, compared with 0.5 percent in 2010.
Dubai might be one of the few places in the region to see growth increase on a year-on-year basis amid political turmoil in the Gulf, said Rachel Ziemba, senior research analyst at Roubini Global Economics.
Ziemba cautioned that the initial boost might not herald a long-term positive outlook for the emirate.
“Dubai and, more broadly, the UAE is somewhat sheltered and could see some benefit of tourism flows,” she said. “However the scope of the unrest and particularly its escalation to regions like Bahrain means even Dubai is not immune.”
(Additional reporting by Dinesh Nair; Editing by Andrew Dobbie)
