Most tourist destinations would love to be facing the problems that Dubai is currently facing. Visitor numbers are still increasing, the problem is that with 200 hotels added in the last eighteen months, rooms are being added at an even greater rate, so as the pie is getting bigger more and more people are trying to get a piece of it.

But isn’t the solution simple? Clean up the current building site, put a hold on, or at least severely limit, new hotels and allow occupancy and revenue levels to pick up again. So reading that 150 new hotels will open in the next two years one can only draw the conclusion that those responsible for the planning don’t really have a clue.

This view is only strengthened after reading an interview with “Dubai tourism expert” and chairman of The Vision, Mr. Ali Abu Monassa. In the interview Abu Monassa talks about Dubai becoming “a hub for luxury and value for money”. Is this really a strategy? Do the two really go together or is he just trying to justify the falling rates of the last eighteen months? I can’t think of too many successful examples in tourism of luxury and value for money being the guiding principles.

The problem with trying to provide luxury and value for money is that as everyone in Dubai is fighting for their piece of the pie the luxury becomes frayed around the edges. By offering luxury and value for money you can lose the luxury market for whom value for money is not a concern.

Through its rapid growth and consequent falling rates Dubai has started to trade low on one of the prime currencies of luxury – exclusivity. People don’t buy Hermès bags because they offer value for money, they buy them because they have to go on a waiting list to get one. In the same way people who stay in luxury hotels would still rather pay double for a beer in the hotel beer than in the bar down the road.

Finally, comments such as “unfortunately, the media generally has made a great campaign against Dubai” aren’t particularly endearing or helpful. I don’t think there has been a “campaign” against Dubai in the media, a few negative articles maybe, a bit of schadenfreude perhaps, but a “campaign”?

What should Dubai do? Carry on building or take a more cautious approach?

Despite its current troubles, there’s little doubt that Dubai will remain a popular tourist destination for many years to come. A little reputation management is going to be required in the short term to deal with extraordinary bile-filled nonsense such as Jane Fryer’s piece in the Daily Mail and countless other sensationalist stories but the future isn’t as bleak as it has been portrayed by some. The excess and ambition of Dubai has meant that when it’s down there are plenty in the queue to start the kicking.

However, as a tourist destination it’s not fatally flawed. It may have lost its lustre a little, but it was only a couple of years ago that hoteliers were boasting of near three-figures occupancy rates. Visitor figures for Dubai this year have even shown growth of 5% in the first half of 2009 in a difficult trading period. Unfortunately, the growth of tourist numbers has been exceeded by the growth in the number of rooms (17%) and occupancy was less than 70% on average.

To increase the number of hotel rooms by 17% without adversely affecting existing hotels would have required much greater growth than 5%, which is asking a lot of any destination, even without a recession. As a result, hotels are now offering huge discounts and RevPAR has dropped substantially.

A lot has been made of the comparison between Las Vegas and Dubai, with people remarking that Dubai doesn’t have the gambling which underpins the Vegas economy. But regardless of the gambling, Vegas still has a greater ratio of visitors to hotel rooms than Dubai.

The crash was always going to happen in Dubai, because the rate of growth was unsustainable. But Vegas itself has had its fair share of downturns over the years and has always bounced back. I’m sure Dubai will do the same, it just needs a cool head responsible for tourism to curb its growth and excesses.

There have been a lot of stories recently about the real estate crash in Dubai, but more worryingly for Dubai, this has been coupled with a lot of bad publicity.

I’ve never been to Dubai, and I have never seen the appeal. I don’t like shopping, anything ostentatious and can live without the beaches. For anything else, I would rather go to Oman.

I have had some dealings with hoteliers from Dubai in recent years and almost every one has had a fairly arrogant approach. They would always harp on about their occupancy and have a very superior attitude. It will be interesting to see how that changes now.

In some ways the demise of Dubai is a shame. It is without doubt tourism’s major success story of the last 20 years. No other destination has built so rapidly, from virtually nothing.

But at the same time, it doesn’t seem to have had any coherent strategy. If it really wanted to be an upmarket destination, they should have stopped, or at least restricted, the building years ago. I can’t imagine there is a huge amount of loyalty amongst its visitors. It should have become the Middle East’s Monte Carlo, but is in real danger of becoming a washed-up building site.