In a delicious bout of "shoot the messenger" the ruling elite in Dubai seem intent on sticking their heads in the sand during the current debt crisis while simultaneous fingering outsiders for their problems.
At one level, it is not a bad reaction as the storm looks set to prove temporary and should provide some cover for an orderly restructuring for what has clearly been an over heated market.
Sheikh Mohammed bin Rashid Al Maktoum, the emirate's ruler, has this week criticised both investors and the media for "misreading" the announcement that Dubai World is going to default on its debt.
Aside from stating the obvious that this is not the right reaction – nor was removing copies of London's Sunday Times from sale in Dubai due to its coverage – the comments attributed to His Highness do at least show he is intent on riding out the problem.
The reaction of investors also shows a couple of seemingly contradictory things. Firstly, if a crisis in a tiddly country with a GDP of less than $50bn provokes a global sell-off, investor confidence is overly fragile. But secondly, these same investors clearly have nothing bigger scaring them off right now.
For hotel investors, there is also some good news in that some of Dubai's recent overseas investments might be up for grabs. As well as presenting the investment opportunity, the arrival of some distressed sales will help stop prices overheating thanks to the shortage of supply that there currently is in commercial property.
It is easy to over cook the distress opportunity, however. Dubai – and by this I mean the myriad state-controlled companies such as Dubai World (which includes subsidiaries such as Istithmar, Dubai Ports, Nakheel, Leisurecorp and Limitless) and Dubai Holding (which includes Jumeirah, Tatweer, Dubai International Capital and Dubai Properties) among many – is unlikely to sell-off plum assets at knock-down prices.
At present, the crisis seems focused on property developers Nakheel and Limitless within Dubai World. Debts of $26bn are set for restructuring out of a total of $56bn owed by Dubai World, according to the official press release. The company is attempting to ring fence other parts of itself such as Istithmar and the ports business.
Confusingly, Nakheel Hotels was moved from Nakheel to Istithmar in September in a change that saw a number of executive changes. CEO Joe Sita left this autumn with the changes.
This reversed a move at the end of 2007 that saw Istithmar's hotel operations – which include a sizeable stake in the Kerzner group, the master franchise rights for easyHotel in the region (the first property is due to open in Dubai early next year) plus it has a number of individual asset investments such as the Knickerbocker in New York – merged with Nakheel's under the Nakheel Hotels banner.
This brought Istithmar's hotel interests together with Nakheel's hotel interests which include New York's Mandarin Oriental in Columbus Circle, the W Hotel Union Square, also in NYC, the Washington Hotel in Washington DC, among others. It also has a stake in IHI, the investment arm of Corinthia and the lead investor in the Metropole.
Nakheel also has stakes in individual hotels including a third of London's Metropole, half of Fontainebleau in Miami, and half of One & Only's Los Cabos in Mexico, plus stakes in a number of development projects including two Ws in Thailand.
Also, Nakheel holds 9.4% of CDL Hospitality Trusts, the Singapore REIT that owns six hotels and is managed by a subsidiary of Millennium & Copthorne.
Among the other high profile assets of Nakheel Hotels is the liner Queen Elizabeth 2, bought in 2007 with the intention of turning into a luxury hotel moored off one of Dubai's Palm islands.
HA Perspective: What the internal move of Nakheel Hotels within Dubai World means is that the hotels business is most likely out of the eye of the storm – at least for the time being.
This does of course depend on whether the holders of Dubai World's Islamic bonds have a charge on any of these assets. Press reports suggest that this might well be tested in court.
In any case, hotel assets held by entities of the Dubai government may yet come to market, including those outside of Dubai World, but it is hard to see many bargains appearing in the short-term. And it is even harder to see any key strategic assets being sold.
There is far more likely to be a sell-off of stakes in companies and some of the more disparate acquisitions and development projects being quietly disposed of.
The turmoil also reinforces that Jumeirah will be focused on hunting management contracts rather than deploying any capital. But rivals should be wary of writing-off the brand. Le Meridien continued to sign deals even during the depths of its own financing problems.