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Business Comment

James Ashton: Abu Dhabi is trying hard – maybe too hard – to be a new desert playground

The Sheikh Zayed Grand Mosque is stunning, but will the tourists come?

It feels like Abu Dhabi has been trying to assert its authority over Dubai ever since it bailed out its brasher neighbour when the property boom turned to bust.

Three years on from that $10bn (£7bn) cheque, and evidence that Dubai and its ruler, Sheikh Mohammed bin Rashid al-Maktoum, was ever in trouble is scant. This week, the malls were thronged, cranes roamed the skyline and new business districts and apartment blocks were taking shape, with only a surprise thunder storm to make construction workers down tools.

When all the hotel rooms in the pipeline are ready to sleep in, Dubai will trail only Las Vegas and Orlando in the number of visitors it can cater for. Hotel bosses report that demand at the luxury end of the market softened but never slumped and now they are trading past their previous peak.

Properties on the last few fronds of The Palm, Dubai's first artificial island, are being snapped up. Only The World, a group of 300 islands shaped like a map, is slow going. State property arm Nakheel won a case last week against a buyer who wanted to pull out from acquiring the Sao Paolo island – hardly the best publicity to attract business.

The biggest change in the region is that Abu Dhabi, always the far richer of the two emirates, is trying to catch up. While Dubai has carved out a reputation as the original desert playground, Abu Dhabi wants the businessmen it brings in to pack their shorts as well as their (lightweight) suits, extend their stay and bring their families. It already hosts a Formula One race each year, there is a Ferrari theme park to boot and the Sheikh Zayed Grand Mosque is breathtaking. When finished, Saadiyat Island, with the Gulf's own Guggenheim museum and Louvre gallery, is designed to keep the culture vultures happy.

Some tourist bosses are sceptical though. Rather than learning lessons from Dubai's over-expansion blip, Abu Dhabi is simply a long way behind, they say, even though it keeps throwing up architectural wonders. Critics believe that no matter how much money it throws at installing the top restaurants and hotels, society here is still too buttoned-up to welcome enough overseas leisure travellers, when the city 80 miles down the road is much easier going. We shall see.

At a gala dinner in Abu Dhabi's gold-encrusted Emirates Palace to mark the World Travel & Tourism Council summit, acrobats and fire jugglers performed to a pulsating soundtrack while Emiratis mingled with falcons on their arms and camels to ride. It was sumptuous indeed, but is the older brother trying too hard to prove it knows how to have fun too?