Holiday firms and the hospitality industry in the UAE and overseas are launching a multi-pronged campaign to keep visitors flocking to the Emirates.
Airlines are slashing their fares from key overseas markets, tour operators have drawn up money-saving packages, and luxury hotels are reducing their list rates.
The move is seen as vital to keep the local economy in good shape during the global economic downturn. Tourism accounts for around 20 per cent of GDP in Dubai alone.
Equally, holidaymakers from the United Kingdom – Dubai's largest market – are demanding "more bang for their buck" as a weakening pound makes the UAE more expensive to visit.
And so far the tactics are paying off.
"Tour operators have said they've been pleasantly surprised by the amount of interest they're getting from customers wanting to book [UAE holidays]," said Sean Tipton of UK travel agents' association Abta. "However, they are much more insistent on getting good value for money."
Tipton said travellers were downsizing their plans and opting for cheaper packages with fewer options, often choosing to book a three-star hotel over a four-star property.
"People are always looking for bargains but we're definitely seeing it more this year."
January has always been a busy month in the UK for holiday bookings. Tour operators in Britain are offering substantial discounts – as much as 30 per cent – for packages in a number of destinations, including Dubai.
The intention is to encourage people to book holidays as early as possible – but travellers from the UK are continuing a tradition of booking at the last minute.
Caroline Bremner, Global Travel and Tourism Manager at market research firm Euromonitor International, said there was a price war among tour operators and airlines in the UK offering trips to Dubai.
British Airways is offering flights to Dubai for £299 (Dh1,600), while Virgin Atlantic is flying to the emirate for £297, where travellers would normally be looking at more than £400.
British Airways Holidays, which counts Dubai as one of its most popular destinations, said forward bookings to the emirate from the January-to-March peak season were "slightly down" – without giving specific figures – even though room rates held up for 2008 from September to December.
"With the current late-booking trend, we would expect to see these months improve but bookings may be impacted by the credit crunch," a spokesman said.
The tour operator said it had secured reduced rates and improved offers from a number of Dubai properties. The emirate is included in its "January sale", bookable until January 27 for travel through September 30.
Prices start from £499 for three nights in a four-star hotel for travel between May 16 and July 15 and between August 24 and September 18, albeit a time when it is too hot.
High hotel charges have always reflected the demand for the excellent standards of service and luxury in Dubai – but they may now be the city's biggest stumbling block.
Last November, Dubai was placed first in a worldwide list of average room rates by hotel benchmarking firm STR Global. Its hotel rates hit $290 (Dh1,067) last August, ahead of Paris at $280 and New York at $261.
In a bid to lure tourists away from less expensive international markets, Dubai's Department of Tourism and Commerce Marketing (DTCM) last month announced a plan to offer discounted airfares and "exclusive rates" during Dubai Shopping Festival, which began on Thursday and runs to February 15.
"The new marketing strategy aims to attract more tourists and visitors from international markets besides the GCC nations," said Khalid Ahmed bin Sulayem, DTCM's Director-General.
Hotel occupancy levels fell to 73 per cent in the third quarter of last year from 85 per cent in the same period in 2007, new figures from DTCM revealed this week.
Despite the drop in hotel bookings, the number of travellers to Dubai rose by three per cent year-on-year.
Bremner said growth in travel from the UK to the emirates was still in double-digits but, it was slowing.
"What we have found is that there is continued growth from the UK to the UAE, however the level of growth is declining. We're still seeing an increase in visitors. However, it's a slower growth."
She said the average spend per visitor from the UK was also going to slow down.
"People are trading down, looking for better deals, taking advantage of discounts, not going out and spending on restaurants and shopping – they're cutting back."
Bremner said there was also evidence of bartering over prices in the hotel market.
"What we're seeing is that hotels offering discounts will negotiate if you phone up and ask for further discounts. They're caving in and they're actually giving quite good deals of up to 40 per cent off the original prices."
Hilton has a global promotion where it offers guests 50 per cent off rooms booked by January 31. "This is a luxury hotel player, you don't normally associate deep discounting with these sorts of players," said Bremner. "It's only for a set period but it's quite a change from their usual approach."
Part of DTCM's plans to lure more tourists to Dubai include offering reduced rates of between 40 to 60 per cent at the city's luxury hotels to overseas visitors as well as residents of the emirate.
Madinat Jumeirah's Mina A' Salam hotel is offering its deluxe rooms from Dh1,850 until April 20 – nearly half the original pre "credit crunch" rate of more than Dh3,000 per night. And the hotel will upgrade guests to an executive room if they book two nights instead of one.
The Madinat's other luxury hotel, Al Qasr, is offering the same deal at Dh2,050 per night.
The One & Only Royal Mirage in Dubai has dropped its rates to Dh1,625 for UAE residents and Dh1,775 for non-corporate guests, down from more than Dh2,700. The hotel is also promoting a deal that lets guests stay three nights when they pay for two.
Follow Emirates 24|7 on Google News.