Hotels in Dubai are slashing rates in a bid to boost occupancy levels following news of the Dubai World debt default. Some five-star hotels are offering rooms for well below £100 a night, whilst rooms at four-star hotels can be snapped up for less than £30 per night.
Rooms in the luxury Taj Palace are going for £89 a night, the Concorde is on sale at £75 and a studio apartment at the five-star Grand Midwest is now just £49.
Booking site hotels.com is offering rooms to Jebel Ali Golf Resort for just £99 a night, whilst rates at the One and Only Royal Mirage have been cut by 40%, from £417 to £250. However the seven-star Burj al Arab is sticking to its luxury guns and doubles remain at £958 per night.
Yesterday, the Dubai stock market today showed some sustained signs of recovery since the debt crisis unfolded 10 days ago.
In a day of heavy trading, shares were up 1.2% rise following a 12.5% fall in the previous two days of trading.
Sentiment in the wider Middle East region also improved. The stock market in neighbouring oil-rich Abu Dhabi surged ahead 4%, its biggest one-day gain since March, while markets in Saudi Arabia and Kuwait were also up.
However Oman’s omission that its top banks had a total exposure of $77m to Dubai World sent their shares down nearly 6%.
Dubai World requested a payment standstill on 25 November for $3.52bn worth of Islamic bonds maturing this month as it tried to restructure $26bn worth of debt.
The debt standstill rocked the financial markets because many investors had expected the Dubai government – or the nearby Abu Dhabi one – would bail out such a key Middle East investment vehicle rather than see it so publicly flounder.
The default also played into wider fears that global stock markets had risen to unsustainable levels and company values did not reflect the continuing fragility of the world economy.