Though from a weather perspective the summer in Dubai was not as severe as previous year, even though mid day temperatures were scorching, evenings were bearable and even the odd day was pleasant. On social scene the question most asked was about the economic situation and when did one expect the down turn to reverse, even though it was reported that events were not as frequent on the social calender was a year back, there was nevertheless, amongst us long time residents a sense of relief. Relief that the glitzy and plastic side of Dubai has suffered from the economic downturn and now those who love and appreciate the city for could actually enjoy it.
Dubai and the region has been in for some bad press for while, and this is obviously the media loves to garnish its readership with, and fine with that. I am however, also of the opinion that some of the noise has come from people who themselves were the beneficiaries of boom and now having either extended themselves out too much, or not finding enough honey in the pot are the first to condemn all that went wrong with the place. Yet let us seek some balance in the argument and we will find that economic ups and downs are the feature of any economy, but never before have I seen so many rats abandon a ship so fast, assuming it was sinking. Well the way I personally see it this was a much needed clean up of the economic and social scene.
I have spent the past week speaking to bankers, tour operators, hoteliers and people who have a good lay of the land. Here is my impression. No doubt to expect the market to go back to dizzy heights of 2007 is wishful thinking if it was expected to happen in a few months. However, there is a general consensus, especially amongst property people, and I am talking of those who are truly in the know, that the bottom seems to have been established on property prices. Bankers on the other hand are seeing a welcome return of liquidity and some banks have even opened their fists enough to show that selective funding is going on. Tour operators, and especially the cruise ship boys, have indicated that their order book for the winter is filling up and there is an inherent demand that is coming back to the market.
Hoteliers are having a more torrid time as business travel seems to have shrunk and with a world wide recession the 'business travel' dollar amount has come down significantly on a global basis. While occupancies may be a struggle to achieve, I do suspect hotels are being a bit stubborn about their rates causing some of their own grief. As we know the hotel business is about putting heads on the pillows in the room and at some stage turn over versus the average room rate needs to be balanced out.
My gut reaction is that the worst seems over, and as confidence returns, the Dubai Metro soon carries its first paying passenger and indeed people come to realize the that the fundamentals for the long term are valid a better 2010 would seem on the horizon. The charm of Dubai to the sub continent and the Arab world has not diminished and on the country level all that Abu Dhabi is doing to show its capability to weather the storm abodes well for Dubai and the country as a whole. I do predict that as suddenly as someone turned of the light on exuberance it will be almost as sudden when suddenly everything will light up and I feel a scramble to buy value in a market where not long ago people were exuberantly crazy enough to pay ridiculously high price.
The summer has sizzled past us, and as the winter approaches there is more good news on the horizon than bad news. The social scene is more likely to find a mature balance and everyone will have realized that as difficult this sounds there is still alot of fun things to do.