Actors and chefs among investors set to lose millions in Dubai crisis

Meltdown: Gordon Ramsay
12 April 2012

A glittering line up of Britain's best known restaurateurs stand to lose out in the £50billion Dubai debt crash.

The emirate's extraordinary economic boom - which now lies in tatters - had attracted some of the biggest names in the industry in recent years.

Among those who have opened expensive restaurants in Dubai are Gordon Ramsay, Gary Rhodes, Marco Pierre White and Giorgio Locatelli.

Other said to be looking at locations include Alan Yau and the Wolseley's Chris Corbin and Jeremy King.

Most have launched in partnership with hotels, so their personal financial exposure will be limited, but it is another setback for an industry that has stampeded into the Arab state.

Many high-profile Britons, including footballers David Beckham and Michael Owen, as well as Hollywood stars such as Brad Pitt have invested in Dubai properties that are almost certain to have lost much of their value.

The fallout from the announcement that major state-owned company Dubai World can no longer meet its debt repayment commitments continued to send shock waves through the financial markets today.

In London a jittery FTSE-100 plummeted more than 50 points in early trading on fears that British banks could be exposed to bad debts in Dubai, before recovering most of the lost ground.

By lunchtime the blue-chip index stood down only 9 points at 5185 ahead of the opening of the Dow Jones index in New York.

Gordon Brown sought to reassure investors and voters about the scale of the impact on the British economy during his trip to a summit meeting of Commonwealth leaders.

He said: "While it is a setback I think we will find it is not on the scale of previous problems we have dealt with. I think global recovery has depended on monetary action and fiscal stimulus."

City commentators said the impact of the debt announcement by Dubai World was a reminder that the credit crunch is far from over but it was unlikely to derail the world economic recovery. Howard Wheeldon, analysts at brokers BGC Partners, said: "A crisis yes and certainly not one that can be ignored but neither is it one that global financial markets should overreact to.

"In my view, and despite the scale of the Dubai debt, this is not a repeat of the Asian financial crisis in 1997, the Russian debt default crisis in 1998 or the crisis in Argentina that emerged in 1999."

However, the huge British ex-pat community, which is estimated to have peaked at 100,000, and the thousands of British businesses that have invested in Dubai since 2000, face an uncertain future.

A roll-call of familiar retail names have opened in Dubai in recent years including Asprey, Burberry, De Beers, Jo Malone, La Senza, Crabtree & Evelyn and Diesel.

The vast hotel industry is also expected to be heavily hit, including Sol Kerzner's spectacular five star Atlantis at the Palm development.

The hotel opened last year with a £12million launch party - said to be the most costly in history - with guests including Kylie Minogue, Lily Allen and Lindsay Lohan.

Industry analysts said hotel chains would be forced to slash room rates to fill the tens of thousands of bedrooms that have been built in the past five years.

One industry analyst said: "I expect to see prices come down and to see even more aggressive marketing from Dubai.

"They had already been working on getting slightly more mainstream hotels into the market in any case and flight prices were falling. That pool of the rich and famous that they were targeting has got smaller.

"We could see them fall more into line with China, which is more of a mid-market destination."

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in