So bad it's good

A seven-star hotel, chic stores, an artificial archipelago that creates a world map in the sea, the tallest building ever, the first underwater hotel: there are no heights - or depths - to which Dubai won't go in its bid to become a tourist mecca. Andrew Tuck visits a tiny country building a big future

The elegantly robed Sheikh Majed Al-Sabah is sitting on the deck of a traditional dhow in Dubai Creek. Well, traditional if you ignore the chugging motor, attentive catering crew and collection of weary fashion-world passengers from Paris, New York and Moscow who, like me, have been invited to this country to witness the opening of the dashing Kuwaiti royal's latest high-class shopping venture.

Majed, as he is casually known, is doing what he does so well - talking. He darts from discussing the Iraq war (bad for fashion, it seems) to why he has launched his latest Villa Moda concept store here in Dubai: "They had a real lack of beautiful fashion shops," he sighs with the heartfelt sympathy of an international charity worker delivering food aid. But, as he acknowledges, it also makes perfect business sense to set up shop in this Gulf state: this is boom central, a land awash with money. Much of the disposable cash comes from Gulf Arabs, some from visiting western visitors, and the rest from rich Russians fleeing their chilly winters (Russians account for half of Majed's sales, hence all the fur-trimmed garments).

And the reason for this boom, for the hordes of tourists, for the locals making vast fortunes is simple: Sheikh Mohammed Bin Rashid Al Maktoum, the crown prince who runs Dubai, one of the seven United Arab Emirates, has decreed it. Under the all powerful leader's tutelage, this small city state (population about 800,000, of which only 19 per cent are Emiri, the rest being foreign workers) has embarked on a lavish building programme - funded by oil money - that is turning what, just 50 years ago, was a collection of sleepy fishing villages, into a cross between the ultimate package-tourist-and-holiday-home destination and the premier business hub in the region. Billions of pounds are being spent and each stage of the plan is more audacious, more James Bondian, than anything that has gone before. The following are just a few of the upcoming delights.

The Burj Dubai will feature a 540m skyscraper, the world's largest, designed by Skidmore, Owings Merrill. Hydropolis, due to open in 2006, will be the world's first full-scale underwater hotel. Chinatown will be a residential and shopping complex boasting a mall in the shape of a dragon and a replica of Beijing's Forbidden City. Dubailand, meanwhile, will offer visitors the chance to hang out in an "authentic desert village oasis" (rarely can the word "authentic" have been so cruelly abused). Then there's the scheme to erect the largest shopping mall outside of North America... And, let's not forget the widely advertised property schemes that involve creating a network of islands off Dubai's coast.

The islands are being made to form the silhouettes of two palm fronds and a map of the world. There's the Palm Jumeirah (this is the one that's well under way and on which several big-name British footballers, including David Beckham, have been given homes) that will be completed by 2006; the Palm Jebel Ali, where the islands are surrounded by "1,000 elevated retreat homes built on poles, spelling out an Arabic poem written by HH General Sheikh Mohammed Bin Rashid Al Maktoum"; and the World, that's made up of 250 islands carefully placed to form a, er, map of the world (you can, for example, buy Madagascar, Spain or the whole of India. Perhaps Mohammed Fayed could snap up Britain? An Argentinian purchase the Falklands?).

"Restraint", you will gather, is not a word that falls with ease from the lips of a Maktoum. But while these flights of fancy may sound like an unsightly mix of all that is kitsch (and indeed they are) somehow, it seems to work. But then, as the citizens of Las Vegas can confirm, bad taste doesn't look so terrible in bright sunshine. Indeed, Dubai is Vegas without the gambling, a place that epitomises the giddying belief that it's always worth gilding the lily. There are some exceptions to this more-is-more school of design: Majed's Villa Moda, stocked sparingly and tastefully with clothes from Prada, Missoni and Alexander McQueen, is chic. But this is not the norm.

For the full-on extreme Dubai experience, head over to the Burj al Arab hotel, which bills itself as the only seven-star hotel in the world and bills you, the punter, a mighty whack. Built on its own island and approached via a private causeway, the hotel has become a national landmark, an Eiffel Tower for the Emirates. And from the outside it is majestic; shaped like the sail of a dhow, its white structure shimmers in the heat. Inside? Swirly carpet hell. In the 200m-high lobby there are vast fish tanks, a fountain that shoots water 32m into the air (the building is essentially hollow) and a lot of people with eyes on sticks. Anything that can be painted red or gold has been so coated. It is simultaneously shocking and wonderful. The winter-sun freaks milling around are certainly unoffended, regarding it all as good fun. And that's why the Maktoum venture will win through: all people like tack.

If you slip on your cossie, you will see what I mean over at Wadi Wadi, a water theme park complete with surf machines and flumes. It's packed; people are having a hoot. But it's the diversity of the crowd that surprises and also endorses Dubai's democratic lure: in the shop I stand behind a woman veiled in black, who in turn stands behind a man dressed only in hairy-butt-revealing Speedos. All are happy.

Majed likens Project Dubai to Bilbao where, by building a museum, the fortunes of a city were changed forever. It's a good analogy but Dubai's dreams are ones that truly amaze. And very soon this country will literally have the world at its feet.

Packages to Dubai are now available from most tour companies, deals for the Burj al Arab start at about £3,000.

The weird and the wonderful

You'll be wanting a bridge loan

Tussling with the Burj al Arab for the title "Most expensive hotel room in the world", is the Atlantis in the Bahamas. Both boast about charging you $25,000 (£14,000) a night for their premier suites. At the Atlantis you'll need to ask for the Bridge suite, set in a, er, bridge, that links the two wings of this massive hotel. The suite has 10 rooms and comes with its own butler. Doesn't say whether they have someone on hand to tell you what a flash idiot you are. For more information, tel: 001 888 528 7155, or visit www.atlantis.com

Worth the gamble

Las Vegas first legalised gambling in the 1930s and, from the start, the heady money that could be won and lost in the industry prompted some outlandish architectural statements. But in recent years those statements have become increasingly outspoken. The casinos and their hotels have gone all out theme bonkers in their search for a big lure. You can stay at the Venetian, which has its own canal complete with gondolas; New York New York, that imitates the Manhattan skyline; Caesar's Palace, with its "Roman" statues; Circus Circus with its, well, circus. It would give John Pawson a coronary.

Wales of a time

Built between 1925 and 1975, Portmeirion is a glorious village that's really just one big folly. The man responsible was Sir Clough Williams-Ellis who wanted to show that he could build in the countryside without defiling it. Some of the buildings were rescued from other sites, while many of the later additions were constructed in a Palladian style. Famously, the 1960s television series The Prisoner, starring Patrick McGoohan, was filmed here. For more information, tel: 01766 770 000 or visit www.portmeirion.wales.com

The Inn crowd

In San Luis Obispo, a small town on the Californian coast, you'll find the Madonna Inn. But if kitsch offends you, do not stop by for even a coffee. Opened in 1958 by Alex and Phyllis Madonna, each of the 109 rooms and suites has its own unique take on 1950s bad taste. Most popular is the Flintstone-esque Cave Man Room which has its own waterfall . Not so sure about the service; on-line reviews shout "It sucks!" and "Just plain tragic". Can't have everything. www.madonnainn.com or tel: 001 805 543 3000