Dubai: The Las Vegas of the Middle East
09/07/2006
Dubai: The Las Vegas of the Middle East, 'Dubai Vegas', 'Sin City without the Casinos', 'The New Nevada'. We've all heard the comparisons between Dubai and Las Vegas countless times, and most of us usually take them with a pinch of salt, which is fair enough when you look at the recent history of the two cities.
In 1980, Las Vegas was busy celebrating its 75th birthday and had already pocketed over $3 billion in annual revenues, while Dubai had only just built the World Trade Centre, which was the only building of note on a barren Shaikh Zayed Road. A stark contrast indeed.
Fast-forward a quarter of a century and the picture is slightly different with the two cities battling it out to become the tourism capital of the world. Today however, and for the first time, Dubai seems to have an edge over its American rival.
Last year Dubai's hotels were the most occupied in the world, at an average of 86%, according to a recent survey by research group Deloitte and Smith - ahead of hotel hot-spots such as New York, Paris, Singapore and, of course, Las Vegas.
The consultancy also revealed that in 2005 Dubai's revenue per hotel guest was the highest in the world, standing at $175.47, up 42.3 per cent on the previous year.
At present, Dubai has 383 hotels with a total room capacity of 35,396, an increase of 5.9 per cent from 2004. With a further 140 hotels and resorts, containing some 34,000 rooms, set to come online by 2009 it is clear that the once little known emirate intends to consolidate its position as the new hotel capital of the world - at the expense of the self-crowned 'King of Hospitality', Las Vegas.
With Dubai breathing down its neck, Las Vegas probably thought it could at least hold on to the fact that it had the world's longest and most glamourous hotel boulevard, known simply as 'The Strip'. Not anymore.
The roll-out of Dubai's $27.2 million 'Bawadi' hospitality and tourism project in May signalled the emirate's intention to top Las Vegas once again.
The project, which is being undertaken by local developer Tatweer, will see 31 hotels offering 29,200 rooms built along a 6.2 mile stretch of the existing Al Qudra road - significantly longer than Vegas' 4.5 mile strip.
The centrepiece of the Bawadi development will be what is slated to become the world's largest hotel, Tatweer's 6,500 room Asia-Asia property. As it stands, Asia-Asia is set to succeed Las Vegas' MGM Grand Hotel Casino, which is currently the world's largest hotel with 5,960 rooms, 52 two-storey skylofts, 29 private villas and a recently added 576-suite section.
However, rumours abound that the MGM Grand has responded by giving the green light for two further towers to be built, adding some 1,200 rooms to the property, in a bid to preserve its status as the world's biggest hotel.
Like Vegas' New York-New York hotel, Asia-Asia will feature replicas of famous landmarks including Taiwan's Taipei 101 skyscraper, Hong Kong's Bank of China building, Kuala Lumpur's Petronas Towers and Shanghai's Oriental Pearl TV building.
The Bawadi development, which is expected to host 3.3 million guests by 2016, will also house a range of hotels based around the themes of the Arabian world, European landmarks and the Wild West.
Five properties are set to open by 2010, with a further six expected to come online by 2011.
Seven hotels will be added in 2012, a further seven in 2013 and the fifth and final phase will see six extra hotels open for business in 2014, bringing the total to 31. Once completed the project will certainly rival Las Vegas's many similar offerings.
"To compete internationally, you should have a big product, a global product," said Ghassan Aridi, CEO of Alpha Tours after Bawadi was launched. "This project is big, much bigger than Las Vegas, and it's going to have many more diverse attractions."
This may well be the case, but in the grand scheme of things Las Vegas' big hitters such as Steve Wynn, the chairman of Mirage Resorts are unlikely to be too worried by the developments in Dubai. Last year Las Vegas' gaming revenue topped $7.6 billion, up from $6.8 billion in 2004, proving that casinos are still the big draw for the city's visitors - 88 per cent of which are American.
"The overwhelming majority of Vegas' visitors are from within the United States so although there is competition coming from Dubai it's not direct competition for Vegas," says Brendan Buhler, a tourism expert and journalist at the Las Vegas Sun newspaper. "The crucial differences are that Dubai doesn't gamble, which is an immense source of cash for Vegas, and that the bars in Dubai have a closing time. These two factors add an enormous amount of revenue to Vegas' bottom-line and Dubai doesn't have this capability."
Whether the newly glamourous Dubai is taking any business away from Las Vegas or not is debatable. With the majority of Vegas' visitors coming from within America's own shores Buhler believes it is unlikely that Dubai's emergence has seriously impacted Vegas' tourism industry.
"While many Americans can afford to go to Dubai and would probably like to visit the city, many others will take a vacation within the US because a plane ticket to Dubai is so expensive," explains Buhler.
Also, a lot of Americans have a lack of interest in travelling abroad, especially to the Arab world. You also have to wonder if Dubai is courting American visitors in the current political climate. I doubt Dubai's tourism board is doing much marketing in the US because, let's face it, if you owned a large hotel in the Arab world, would you be trying to fill it with Americans right now?"
Although it is Dubai that has been hitting the headlines with its many grandiose hospitality developments, Las Vegas has been quietly rolling-out a host of equally mammoth hotel projects. And according to the Only Vegas research group, Dubai's American rival will see upwards of 40,000 hotel rooms added to its portfolio by 2010 - around 4,000 more than Dubai will add during the same period.
Despite the mutterings that Dubai is set to overtake Sin City in the hotel stakes, it is Las Vegas that remains the front-runner in terms of hospitality.
Seventeen of the world's 20 biggest hotels are in Vegas and the city makes $36.7 billion for tourism each year thanks to its 37 million annual guests. The city also holds some 22,000 conventions and trade shows each year, which alone draw in over 6.1 million visitors and delegates.
With these impressive figures in mind it is clear that Dubai still has a long way to go to take Vegas' crown.
However, with projects such as Dubailand, Bawadi and the three Palm Island's set to come online in the next few years Dubai could become the new Las Vegas sooner rather than later.
The author is a freelance journalist based in Paris.
World's biggest hotels
With 383 hotels containing over 35,000 rooms Dubai is clearly one of the world's hotel hot spots.
With 140 hotels featuring 34,000 units set to open by the end of 2009, the emirate should consolidate that position, and even become the hospitality capital of the world.
Dubai may also have the world's largest hotel when Tatweer's 6,500 room Asia-Asia property opens for business some time before 2014.
Even if it does, the emirate still has a long way to go to rival Las Vegas, which currently lays claim to 17 of the 20 biggest hotels in the world.
