There is no truth in the news of Dubai’s financial crisis. Though it is evident that the US recession has affected Dubai, the oil producing state has sufficient reserves to control the situation. It is a fact that the housing and financial sector is the most affected one, because the recession has affected these sectors more than others.

Once it seemed that in emirate the construction will continue forever. The sound of drill and hammer etc. were a common hearing, be it a afternoon or night. Now there is no such sound and unemployment is increasing. The prices of the real state have come down significantly. The rentals of the hotel rooms have also come down. The construction boom is now over.

When the real state sector sank in, the Dubai hotel industry was in a state of shock.A number of hotels in Dubai were planned by the urban planners, and have overestimated hotel needs. Asia-Asia, planned to be the world’s largest hotel with 6500 rooms, part of the Badawi Project at Dubailand. The rentals of many hotels in Dubai are still high enough, even for the Westerners. A report stated that Dubai office space is the tenth most expensive in the world. Clearly, to revive the drpping economy, it will have to make a lot of things cheaper. This will include everything from parking fees to the general cost of living not only for Western expatriates but also for the Indians, Pakistanis, Bangladeshis, Filpinos and a host of other nationalities that manned its various business sectors from shops to supermarkets. Otherwise they will simply not be induced to come back.

It will take time for the Dubai hotel bookings to reach its full capacity once again. The entire Dubai hotels have slashed their rates in order to be in the race. The fierce completion for survival in the industry is proving to be a boon for the customers.

The recovery in the economy and hotel industry evidently will depend on many factors like doing business,construction etc. There is a report that the news that rentals for residential property have fallen 38 percent since 2009,with 18 percent decrease in Abu Dhabi.

To be positive, the recent increase in the investing activities is a good sign of recovery.Exess liquidity and easy moneatary measures resulted in the low interest rates. Dollar depreciation led to flow money out of banks into property.

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