The news of Dubai’s financial crisis seems to have no fact. Though the recession in US has affected the state, it has sufficient reserves to tide over the situation. The housing and the financial sector is the most affected.

Once it seemed that in emirate the construction will continue forever. The sound of drill and hammer etc. were a common hearing, be it a afternoon or night. Now there is no such sound and unemployment is increasing. The prices of the real state have come down significantly. The rentals of the hotel rooms have also come down. The construction boom is now over.

The hotel industry of Dubai was in a state of shock, when the reality sector sank in. the need of the hotels in the Dubai was overestimated. Asia Asia planned to be the world’s largest hotel. The rentals are still high enough for the hotel rooms, which looks expensive even to the westerners. The state will have to make things affordable to save the economy. Otherwise it will be difficult to tide over the situation.

It will take some time before we can hope for Dubai hotel bookings to full capacity. Most of the Dubai hotels have slashed their rates in order to get over the crisis. The intense competition in the hotel industry is becoming a boon for the customers.

It is evident that the recovery in the economy and hotel industry will depend on many factors like doing business,construction etc. There is a report that the news that rentals for residential property have fallen 38 percent since 2009,with 18 percent decrease in Abu Dhabi.

The good feature of the story is, the recent increase in the investing activities is a good sign of recovery.Exess liquidity and easy moneatary measures resulted in the low interest rates. Dollar depreciation led to flow money out of banks into property.

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