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However, in the wake of the global financial crisis the two emirates have seen the fortunes of their tourism industries go in opposite directions.
Dubai's high-flying hotel sector, like much of the rest of the world, witnessed declines in occupancy and revenues throughout the downturn, while Abu Dhabi has risen to new heights.
In the first half of 2009, average daily room rates in Dubai fell 24% while rates in Abu Dhabi rose 5% from the same period the year before, said a report by Hogg Robinson. And with room rates averaging $275 a night in the first half of the year, Abu Dhabi replaced Dubai as the most expensive major destination in the world, according to Hotels.com's hotel price index.
Detailed strategy
Abu Dhabi's rise as a tourist destination is the by-product of a carefully thought-out strategy by the government that involves billions of dollars of investment in infrastructure, marketing, and tourism developments.
In the immediate future, the emirate is expecting to receive a large influx of visitors for two high-profile events: the Abu Dhabi Grand Prix - the UAE's first-ever Formula One race - which will take place in the first week of November on Yas Island, and the FIFA Club World Cup UAE 2009, which will be held the following month.
In addition to attracting race fans, the F1 event will also serve as a showcase for the $36bn island development, whose offerings when completed will include high-end resorts, golf courses, and a Ferrari theme park.
Seven new hotels will open this month on the island in time for the race, including the 500-room Yas Hotel from real estate developer Aldar, two Rotana-managed properties, two IHG hotels, a Radisson Blu by Rezidor, and the UAE's first Park Inn.
Diversified growth
In addition to hosting the upcoming sporting events, the capital is also hoping to gain a reputation as a cultural hub with the development of Saadiyat Island, which will be home to the Guggenheim and Louvre museums.
The emirate's tourism efforts are being aided by the rapid growth of Abu Dhabi International Airport, which is now directly linked with 69 destinations and served by 32 airlines. Passenger traffic at the airport has grown significantly over the past five years, almost doubling from five million a year to nine million.
Abu Dhabi is on target to receive 1.5 million hotel guests in 2009, which would be on par with last year's performance, Ahmed Hussein, Deputy Director General, Abu Dhabi Tourism Authority (ADTA) told AMEInfo.com. 'Next year we are looking for a 10% increase with a 15% increase slated each for 2011 and 2012, so that by the end of 2012 we will reach our goal of receiving 2.3 million hotel guests,' he noted.
To help meet these ambitious targets, approximately 10,000 rooms are under construction in the emirate to be delivered in the remainder of this year and through 2010, with a further 7,000 to come on line in 2011. Overall, the emirate hopes to have 24,000 available rooms by 2012.
Infrastructure milestone
Last week Abu Dhabi achieved a milestone in its infrastructure with the opening of a bridge that links Saadiyat Island with the city for the first time.
Jeff Florian, Senior Reporter
