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Inside the £800m Dubai hotel boasting a £13,000-a-night suite and dolphins flown in from the South Pacific

Posted on 2:08 AM by Sameer Shah

It's the latest word in Gulf excess - a sprawling £800million resort boasting a £13,000-a-night suite and dolphins flown in from the South Pacific, all atop a palm tree-shaped island.

Environmentalists have long criticised both the island and some of the features of the Atlantis hotel, set to open tomorrow.

Analysts wonder, separately, if global financial turmoil could someday crimp Dubai's big tourist dreams.

But Dubai is not blinking: the 113-acre resort on an artificial island off the Persian Gulf coast is among the city-state's biggest bets that tourism can help sustain its economy once regional oil profits stop flowing.










'You don't build a billion-and-a-half dollar project just anywhere in the world,' said Alan Leibman, president and managing director of Kerzner International, the hotel operator that teamed with Dubai developer Nakheel on the resort.

With its own oil reserves running dry, Dubai hopes to woo those eager to make money and those who know how to spend it - even as much of the global economy sours.

For years, the emirate - one of seven semi-independent states that make up the United Arab Emirates - has been feverishly building skyscrapers and luxury hotels.

A key piece of the strategy has been to cultivate an image in the West as a sun-kissed tourist destination despite its soaring summer heat, conservative Muslim society and relative dearth of historic sites.











Fueling the interest are belief-defying projects such as an indoor ski slope, the as-yet-incomplete world's tallest skyscraper and a growing archipelago of man-made islands such as the Palm Jumeirah - the smallest of three such projects planned.

Much of the focus at Atlantis, modeled on a sister resort in the Bahamas, is on ocean-themed family entertainment.

The resort contains a giant open-air tank with 65,000 fish, stingrays and other sea creatures and a dolphinarium with more than two dozen bottlenose dolphins flown in, amid controversy, from the Solomon Islands.

But the hotel's top floor aims squarely at the ultra-wealthy. A three-bedroom, three-bathroom suite complete with gold-leaf 18-seat dining table is on offer for £13,000 a night.

Dubai's development has long been criticized by environmental activists, who say the construction of artificial islands hurts coral reefs and even shifts water currents. They point to growing water and power consumption.











Last year, environmental groups and some residents of the Solomon Islands protested the decision to sell the dolphins, plus the 30-hour plane flight needed to get them to Dubai.

Developers seem undaunted. For the moment, the resort shares the sprawling island only with rows of high-end houses and construction sites. But other international names are set to move in.

Donald Trump plans to open a hotel straddling the center of the palm, and the storied QE2 ocean liner will become a hotel and a tourist attraction docked alongside the island tree's 'trunk'.

An 1,800-seat theater nearby will house a permanent Cirque du Soleil show beginning in summer 2011.












'Palm Jumeirah in and of itself will become one of Dubai's major tourist attractions,' said Joe Cita, chief executive of Nakheel's hotel division.

Boosting the number of attractions on the island will not only entice more visitors, he said, but also persuade them to spend more time and money in the city.

By 2010, Dubai aims to attract a staggering 10 million hotel visitors annually, up from about 7 million in 2007. Atlantis alone will increase the city's hotel capacity by 3 percent.










So far, demand appears strong. The Middle East had the highest hotel occupancy rates in the world during the first half of the year, with Dubai leading the region at 85.3 percent, according to professional services firm Deloitte Touche Tohmatsu.

Dubai also had the highest room rates in the region, although revenue growth is slowing, Deloitte noted.

Atlantis' backers are optimistic they can fill its 1,539 rooms despite the economic uncertainty wracking some of the world's richest economies. Their focus is on well-heeled travelers from Europe, Russia, Asia and elsewhere in the Middle East.













'People will still take family holidays,' Leibman said. 'Dubai is still good value when you're paying in pounds, (or) you're paying in euros.'

Nakheel and Kerzner are both privately held companies and do not release sales data. Leibman said demand from tour groups looks strong well into the first part of next year.

Yet Marios Maratheftis, head of regional research for the Middle East, North Africa and Pakistan at Standard Chartered Bank in Dubai, said there is 'good reason' to be concerned that global financial problems could hit Dubai's tourism industry. Nevertheless, he said, the city's long-term outlook remains positive.

Kerzner has grown increasingly close to Dubai in recent years. In 2006, the company took itself private in a £2 billion deal partially bankrolled by a division of Nakheel's state-owned parent, Dubai World. Nakheel retains a large stake in the company.

Meanwhile, Nakheel's hotel division has expanded rapidly. The company's holdings include New York's Mandarin Oriental, the Fontainebleau in Miami Beach, and the W Hotel in Washington.

Its parent also owns a minority stake in MGM Mirage Inc., and is teaming with the casino operator and Kerzner to build a massive multibillion-dollar casino on the Las Vegas Strip.

But don't expect to find roulette wheels at Dubai's Atlantis. Islamic prohibitions against gambling ensure casinos remain off-limits.

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