Although Dubai property developers have been battered by three years of falling prices, the market is still strong for retail and hospitality, Bloomberg reports this week.

That's good news for Dubai luxury holiday seekers. With locals tightening their belts, there are plenty of bargains to be had. Hotels are still one of the growth industries in Dubai and tourism showed strong growth in 2011, according to David Macadam, head of retail for the region at Jones Lang LaSalle. La Salle told Bloomberg that the strong retail sector had been boosted by visitors from the Indian subcontinent, China, Gulf region, and the rest of the Arab world, as well as Europe.

With armed conflicts in Yemen and Syria narrowing options for tourists, Dubai luxury holidays are still a strong option, and hotels reported an 11 per cent increase in visitors from January to September last year compared with the same nine months in 2010.

The embattled property market has seen many investors pulling out of development and turning to retail and tourism and these areas are now the powerhouse of the economy.

HSBC Bank analyst Patrick Gaffney told Bloomberg that most developers were looking to interests with recurring revenues because property sales have been so slow. "The sectors that are doing best are retail and hotels because of strong tourist arrivals," he added.

Despite the flagging property sales, Majid Al Futtaim Holding LLC last month reported an increase of 18 per cent in revenue, based on its core business as the largest owner of shopping malls in Dubai. Similar stories are being reported throughout the retail industry.

As confidence rises, major retailers such as American Eagle Outfitters, Limited Brands Inc. and the Rivoli Group are opening shops in Dubai. The second-largest US department store, Macy's opened its first international Bloomingdale's store in 2010.

Tourists arriving for Dubai luxury holidays are adding to the success of the sector. As a retail hub for the region, shopping accounted for about 30 per cent of Dubai's gross domestic product last year. Retail giant Emaar, which recently opened Burj Khalifa, which happens to be the world's tallest building, derived almost twenty-three per cent of its 2011 income from retail rentals and is now concentrating almost entirely in Dubai on increasing sales at its malls, said Gaffney. The company has profited handsomely from tourists on Dubai luxury holidays that must pass through the Dubai Mall to visit the observation deck at the top of Burj Khalifa.

Along with tourists from Europe, visitors from the Middle East region are driving increasing tourist returns as they flock to events such as the month-long shopping festival in Dubai, which last year showed a 53 per cent increase in returns over the previous year.