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YOUR PETRODOLLARS AT WORK
By Michael Matthews
February 7, 2008 -- I've worked it out. When you have so much money that you don't know what to do with it, just build a hotel. That's what is happening in the Middle East, where billions and billions of petrodollars are fueling a frenzy of hotel construction unlike anything the world has ever seen.

There are already some truly great hotels in the Arab Gulf. In fact, the United Arab Emirate of Dubai probably has more five-star hotels per square mile than anywhere in the world. The most notable is the Burj Al Arab, called the world's first six-star hotel. It's an amazing experience. It's built to resemble a billowing sail of a dhow, a traditional Arab sailing vessel. Every room is a two-floor suite. Gold-plated Rolls Royces deliver you from the airport. Butlers fall over each other to serve you. The soap and other bathroom amenities are provided by Hermes. Each bed has 13 pillows (I know, I counted!) and a choice of silk, terry or cotton sheets. There are awesome food and beverage outlets. One has a breakfast buffet piled high with sides of smoked salmon and oysters. Caviar, too.

But the Burj may pale in comparison with what's on the hotel horizon in the Middle East, specifically in the nations of the Gulf Cooperation Council (GCC). Hotel projects currently under construction in the GCC have an estimated total value of $12.7 billion. In the United Arab Emirates, 100 new hotels with 30,000 rooms are expected to open by 2010. What's even more staggering is that most of the new rooms will be at the four- or five-star level. And they are beginning to add stars (and hyperbole) to describe the rest of what's in the pipeline there.

Dubai will probably continue to lead the way in the Gulf. A project called Asia-Asia will cost $1.65 billion and have 6,500 rooms. That will make it the world's largest hotel, surpassing the current champion, the MGM in Las Vegas, by a mere 1,500 rooms.

Then there is the world's first "seven-star" hotel (Oh, please, give me a break!) called Dubai Lifestyle City. It's being built for only $650 million. Also on the way: the 1,000-room Palaces Hotel, which is being modeled after Versailles, the Taj Mahal and Buckingham Palace. It is coming in at a mere $327 million, which seems like a bargain for three palaces.

In Abu Dhabi, another United Arab Emirate, a $3 billion hotel project will be managed by MGM. In Qatar, the home of Al Jazeera, they are building four new five-star hotels. In Bahrain, there is a $500 million resort under way called the Durrat Al Bahrain and a $600 million resort called the Salaam. The Salaam claims it will have the largest spa in the Middle East and, bowing to Islamic sensibilities, the facilities will be segregated along gender lines.

Not to be outdone, Saudi Arabia is building with abandon, even in Mecca, the holiest city in the Islamic world. A 31-story tower costing about $400 million will contain a luxury hotel. But it will be dwarfed by a development called Jabal al-Kaaba. It has a $710 million budget and will feature nine hotels and 10,000 rooms.

The problem with this frenzied development? Who's going to fill the rooms? I guess I understand the new hotels in Mecca. After all, more than 2 million worshippers descend on the city for the annual five-day hajj, the once-in-a-lifetime commitment required of all able-bodied Muslims.

But an estimate I saw recently even put the hajj, the world's largest annual pilgrimage, in perspective. When you consider all of the new rooms being built around the Gulf region, the hotels will need 5.5 million new visitors a year and each visitor will have to stay several nights.

I have visited most of the Gulf countries and tried hard to find them fascinating. I failed. Dubai and Abu Dhabi are huge, booming waterfront cities, but they are on the edge of the desert. Their beaches aren't great. There's no gambling, drinking is restricted and even camel racing only takes place a few months of the year. There's plenty of shopping, of course, but there is good shopping almost everywhere in the world these days. The weather is, well, hotter than most Westerners find comfortable. So we're not talking the French Riviera or the Amalfi Coast here. And Qatar and Bahrain have a long way to go before they match up to Dubai and Abu Dhabi.

Saudi Arabia has another problem. You can't even get in without a formal invitation, preferably from one of the country's thousands of princes. Even when you're in, there isn't all that much to do. (For entertainment, I used to sit in the lobby of the hotel drinking non-alcoholic beer looking at women's ankles as they walked by. After a few weeks, let me tell you, the Victorians had it right, ankles can be erotic.) And Mecca, of course, is off-limits to non-Muslims.

As I said at the top, these are your petrodollars at work. Every time you fill your gas tank, you help build a hotel in the desert.
ABOUT MICHAEL MATTHEWS Michael Matthews has managed and marketed fine hotels around the world for more than 45 years. He spent 14 years in Hong Kong building the legendary Regent International group. He has also worked with St. Regis, Ritz-Carlton and Rosewood hotels. Matthews is currently based in Arizona. He began writing Do Not Disturb in early 2004.

THE FINE PRINT Joe Brancatelli makes this space available to Michael Matthews in the spirit of free speech and to encourage editorial diversity and the wider discussion of important travel issues. All of the opinions and material in this column are the sole property of Matthews. This column may not be reproduced in any form without the express permission of Michael Matthews.

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