Gerald Lawless, shrewd chief executive of the Jumeirah Group, was surely right a couple of weeks back when he told me that there hadn’t yet been any huge fall-off in the number of Russian tourists using his establishments as a result of the self-inflicted economic crisis the country is enduring.
But even Mr Lawless’s crystal ball could not have foreseen the dramatic fall in the value of the rouble last week, and I wonder if he is now looking more apprehensively at the figures in the run-up to the busiest time of for Russians, the new year holiday period which begins next month and goes on for a couple of weeks.
The omens were not good last week in Arboretum, the wonderful buffet restaurant in the Al Qasr hotel.
I often go there with my wife and child on a Thursday evening, and it’s usually packed, especially with Russians.
Last Thursday, however, there was no problem at all in getting a table. Would I like inside or outside? Near the window or on the central banquets?
It didn’t matter, there was barely a Russian in the place, where usually it is filled with the throaty tones of wealthy Muscovites. One staff member confirmed that there were far fewer Russians than normal, but given it was in the pre-Christmas build-up that wasn’t so unusual.
The clientele tended to be more western European in this period anyway, and the Brits, French, Germans and Dutch were on their way, he said. He was holding his fingers crossed for the Russians in January.
Then a family sat down near us and we heard the familiar sounds of Russian coming from the father to his little girl, who was about the same age as mine. My daughter is more or less fluent in Russian (as fluent as a six year old can be in any language), and she started talking to the other girl, which gave us an intro to the rest of the family.
Very pleasant people too, happy to talk about what was going on back home.
The man, Igor (no I am not making this up), confessed to worries about the immediate future, blaming the west, the United States and Saudi Arabia in particular.
But he thought his compatriots would hunker down, as president Vladimir Putin has exhorted them, to a couple of years of relative austerity before things – especially the oil price – got better.
He and his family were enjoying a pre-austerity binge in Dubai, he explained, but there was one matter on his mind above all others, which he thought was potentially serious issue for all Russians.
In Moscow, where he was from, the past few weeks have seen a surge in the number of property owners who are taking out mortgages.
They get the cash in roubles, and then immediately change it into dollars, as a hedge against further declines in the Russian currency.
Well, it may be nice to hold a fistful of greenbacks, but the pitfalls of this particular strategy are glaring. The mortgages are hugely exposed to volatile currency markets, and stand to lose their homes if things move the wrong way.
They also have a vested interest in maintaining the current low state of the rouble.
Having bought dollars with cheap roubles, there is no incentive for them to see the currency appreciate.
That must all be very worrying for Mr Putin.
Many of the Russians expected in Dubai next month may have literally mortgaged their lives to get here.
fkane@thenational.ae
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