April 29, 2010 3:00 am
Forging new frontiers is nothing new for Giorgio Armani. But even the renowned fashion designer must have been relieved when he took the applause on Tuesday night at the end of a fashion show to open the Armani Dubai hotel.
The event was the realisation of a five-year plan to launch a chain of branded hotels with Emaar, the region's largest developer.
But in a sign that Dubai is starting to rebound from its economic woes of the past two years - including amassing more than $100m of government-related debt, Mr Armani had to share the evening's spotlight.
A short hop across town, was a Christie's auction of regional art that achieved "spectacular" prices as buyers bid for a prized collection of modern Egyptian art. The sale made $15m (€11.4m, £10m), triple the estimate, with one work, Mahmoud Said's "Les Chadoufs", going for $2.43m, a record for such work.
The cool lines of the Armani hotel, a minimalist island in a sea of gaudy hotels, along with frenetic bidding at the auction, acted as a reminder that the city remains the region's hospitality hub and is now taking its place on the global stage as a commercial art centre.
Analysts caution, however, that the emirate still has a long way to go before it can boast a full recovery. The hotel and residences take up the first eight floors of the $1.5bn Burj Khalifa, the world's tallest tower, renamed last year after the ruler of the United Arab Emirates to show federal solidarity after Abu Dhabi bailed out Dubai with $20bn in emergency loans.
As the credit crunch took its toll on Dubai, rumours had spread that the five-year project was hitting the skids as Emaar's once free-flowing cash flows dried up.
But Mohammed Alabbar, Emaar's chairman, said the developer had increased spending on the hotel through the crisis and shrugged off its effect on Dubai. "Cycles come and go," he said.
A Milan branch opens next year and a Moroccan resort the year after, with plans for more hotels in Tokyo and New York.
In spite of Dubai's shift towards a more conservative approach as it comes down from the highs of the boom, the city remains a relative beacon of tolerance that continues to attract foreigners, including Mr Armani.
The emirate's hotel market has held up by discounting room rates. But the Armani hotel will target wealthy travellers with prices starting at about $1,000 a night.
Christie's said its auction, its eighth of Middle Eastern art in Dubai, was clear evidence of the region's recovery. "We could never have achieved prices at that level anywhere else in the world," said Jussi Pylkkänen, president of Christie's Middle East and Europe.
Please don't cut articles from FT.com and redistribute by email or post to the web.