Emirates' profits highlight the Dubai tourism boom

The immediate outlook is also bright and capacity constraints are the main concern both for the local airline and local hotels.

Emirates' expansion plans have been slowed by the late delivery of the A380 super-jumbo from Airbus. The airline has 107 aircraft on order, more than its current fleet of 102, including 45 of the A380s, the first of which will not now arrive until August 2008.

Chairman Sheikh Ahmed bin Saeed Al Maktoum told journalists last week that profit expansion for next year is expected to be just 10 per cent, and bemoaned the fact that the missing A380s will hold back further growth. When asked if he was considering the cancellation of his order for lateness, His Highness remarked that no he was more likely to increase it.

Hotel's running late

It is a similar story in the hotel sector. The 2,100 rooms in the Bavarian Business Suites, part of the Dubai Media City, which were scheduled for completion in August 2006 still seem a long way from delivery. Likewise, developers have been slow to start hotel construction on The Palm, Jumeirah.

Indeed the supposed flood of hotel rooms once forecast for 2006 will not appear until next year, with some doubts already emerging over that forecast.

In the meantime, the cheap US dollar means that for many potential visitors from Europe, the UK and Russia the UAE is a bargain destination, despite the rise in average room rates. And they keep coming all the year round, even in the super hot Gulf summer when many expatriates have departed for cooler climates.

Could there come a time when the present boom in Dubai tourism fades? It is possible the dollar could strengthen from its current weak position. Geopolitical emergencies could clear the tourists as last happened in spring 2003 before the Second Gulf War.

Capacity issues

But the hotel infrastructure is in place in Dubai and will need to be filled at whatever price the market will bear. At the moment times are very good for hoteliers and airlines, and capacity is an issue, not customers.

In fact, this is a virtuous circle with the ongoing expansion of Emirates to new destinations always feeding yet another set of new tourists and business persons into Dubai. Last year Emirates added Bangalore, Beijing, Nagoya and Tunis to its network. This year the airline will start flying to Venice and Sao Paulo, halving flight times to South America from Dubai.

Perhaps one day this cycle of expansion will be done. There are only so many destinations around the globe to funnel visitors into Dubai. But for the time being the Dubai tourism industry remains very much a pace setter for growth and innovation funded by the oil boom.