Happy New Year - for richer, for poorer

Rihanna will perform for New Year's Eve revellers at the Emirates Palace tonight in Abu Dhabi.

To splash out and celebrate or to save money? That's the decision facing fiscally challenged revellers tonight. For many people in Dubai, 2009 was a very tough year. The economic downturn, resulting in layoffs and investment losses, curbed what had been an enviable lifestyle. For the hotels that organise New Year's Eve celebrations, the situation created a conundrum: whether to "go big" for the end of the decade, or adopt a more measured, modest approach reflecting the current financial situation.

Some venues have hiked their prices, in the hope that party-goers will leave their money worries behind for the night. Others have taken a more pragmatic approach. The Media One hotel, in Media City, is offering free entry in the hope of bringing increased profitability in the long term. Sebastien Noat, the operations manager for the new hotel, said it had been a difficult year for the hospitality industry so hoteliers have had to become more creative.

"There is more choice in Dubai now and it is naive to assume people won't compare prices," he said. "It is arrogant for established venues to think that they can charge high prices and customers will remain loyal. They want to spend money on drinks and food, not on entry fees." Some hotels have drastically reduced entrance fees for New Year's Eve revellers. The Shangri-La Hotel, on Sheikh Zayed Road, for instance, charged Dh1,600 (US$435) for its New Year's Eve party in 2007. This year prices have been slashed to less than Dh700. Sheryl Noscal, the reservations assistant, said the hotel was catering to those with tightened budgets.

"We want to fill the restaurants and attract people to the venue so we have created a value-for-money offer this year," she said. "We hope that people will come, enjoy themselves and get a positive impression of the hotel and therefore return, creating repeat business." This year, many people are making plans to save money by celebrating at private parties. Martin Kubler, 37, a Dubai resident from Germany, said even a celebrity DJ would not be able to compete with the value and variety of a house party.

"There are a few fans that will be attracted by a celebrity at a venue but it is the high prices that have stopped many people going out," he said. "When we first came here, in 2004, you could celebrate with dinner for Dh500. But over the last few years the prices have become ridiculous. "Some people stay in primarily to save money, but even those who can afford it are choosing not to because of the psychological barrier of feeling ripped off."

Following the global financial crisis, hotels and bars are understandably seeking to maximise revenue on the most popular party night of the year. But in raising their prices, they could damage their reputations, Mr Kubler said. "Dubai has a transient population and because of this venues think they can just put the prices up every year for a new crowd," he said. "But as more people stay for longer periods they remember if a nightspot doubles its prices and it leaves a negative impression.

"What is particularly annoying is that at many venues the entertainment and refreshments are no different; they just double the price each year." The focal point of the evening for most people in Dubai is expected to be the spectacular fireworks display over the Burj Al Arab that traditionally welcomes in the new year. With an increasing number of apartments in districts such as the Marina and Al Barsha enjoying the same commanding view as nearby hotels, many are planning their parties around the display.

"Christmas is an expensive time and, as many know friends or colleagues who have lost their jobs this year, budgets have been tight," said Joanie Jamieson, 39, a resident from the US. "We decided not to spend lots of money going to an expensive hotel and instead I'm hosting my own party and inviting everyone round. It will be just as fun and there will be a great view of the fireworks from the balcony."

Many of Dubai's top nightspots have spared no expense, though. The Cavalli Club is charging Dh1,800 for a package that includes a seven-course banquet and an open bar. The Jumeirah Beach bar 360, where guests an enjoy panoramic views of the sea, has recruited Peaches Geldof, the "It girl"-turned-DJ daughter of former Irish Boom Town Rats rocker Sir Bob, to entertain revellers. The World Trade Centre has brought in the cream of the Bollywood music scene, including Atif Aslam, to enthral VIP guests paying Dh1,500 per head.

Meanwhile, in Abu Dhabi, Emirates Palace remains the top choice of venue to see in the new year. Its rooms are fully booked, largely because of the concert being held there by the pop singer Rihanna. Tickets cost Dh2,900 for a two-person package, including brunch and entry to the show. Meals at the venue's restaurant range from Dh395 to Dh1,400. A salesman at the hotel said it had not cut prices this year.

"On the contrary, when we are going to be full, we increase the rates," the salesman said. However, the capital's Rotana hotel in the Tourist Club area did reduce its room rate by almost 15 per cent this year in light of the economy, said Layal Bou Habib, a communications representative at the venue. "We did it as a gesture to all Abu Dhabi residents who supported us throughout the year, taking into consideration that people in general are now more conscious about the amount of money they spend," she said.

@Email:[e-mail] * With additional reporting by Anealla Safdar