Thursday, Nov 20, 2008
(From THE WALL STREET JOURNAL)
By Stefania Bianchi and Chip Cummins
DUBAI -- Amid world-wide economic upheaval, South African casino mogul Solomon Kerzner is throwing this Mideast boomtown's most lavish party to date, marking the grand opening of a $1.5 billion hotel on Dubai's man-made, palm-shaped island.
The Thursday-night bash at the salmon-colored Atlantis -- modeled after Mr. Kerzner's Atlantis resort in the Bahamas -- is costing Kerzner International Holdings Ltd. and its Dubai partner some $20 million.
The timing of the hotel's expensive grand opening isn't exactly ideal for Mr. Kerzner, or for Dubai. Kerzner International, along with the rest of the hotel and casino industry, is girding for hard times. And in Dubai, a once-soaring property market is falling back down to earth. Analysts worry about the city-state's mounting debt load amid the recent financial crisis.
Mr. Kerzner, 73 years old, acknowledges the hotel industry and his privately held company will inevitably feel the effects of the economic turmoil. But in an interview, he said he is banking on Dubai in the long run. He expects his newest hotel, where rooms start at $800 a night and go up to $25,000, will weather the current storm.
"We would have preferred obviously for economies to be buoyant and growing. But on the other hand, you don't develop this on the basis of how we're going to do in the first two to three years," he said. "A medium-term view makes sense."
For Dubai, the party could be bittersweet. It serves as a sort of coming-out party for the archipelago Palm Jumeirah. The residential and commercial development is still clogged with cranes, trucks and construction workers. Even under construction, it has become the best-known symbol of Dubai's recent, explosive growth. (Dubai is one of seven, semiautonomous emirates that make up the United Arab Emirates.)
But the opening also comes just as Dubai's booming economy, led by its property market, is showing the first signs in years of slowing. Real-estate agents here say property buyers are suddenly scarce and prices are falling. Analysts, meanwhile, worry about Dubai's large foreign debt, taken on over the years to finance its growth.
But the show must go on. A host of Hollywood and Bollywood stars have been drafted for the Thursday launch. Australian pop singer Kylie Minogue and Bollywood star Priyanka Chopra will perform for a 2,000-person, star-studded guest list.
Mr. Kerzner and his Dubai partner, government-owned developer Nakheel, have also hired the same people who organized the Beijing Olympics fireworks show. But they say their display Thursday night will be seven times larger.
Organizers say the fireworks will stretch across Palm Jumeirah, lighting up the entire archipelago. Atlantis's Michelin-star chefs, including Santi Santamaria and celebrity chef Nobu Matsuhisa, will prepare dishes for the black-tie dinner.
"The scale of what we're doing here is certainly bigger than what we've done previously," Mr. Kerzner said.
(END) Dow Jones Newswires
20-11-08 0447GMT
