Regatta Racing

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The America's Cup drama continues to play out after months of legal wrangling and substantial construction in preparation for the event in Ras Al Khaimah (RAK). The two competitors in one of the sailing world's most prominent regattas – Alinghi and BMW Oracle Racing (Oracle) – are awaiting an appeal decision, expected this month, after a federal court in New York ruled in October that RAK was not a suitable venue for the race. With the appeal decision outstanding, there is still a chance – however slim – that the race could ultimately set sail in RAK. Regardless of the outcome, the emirate is still moving confidently towards an expanded tourism sector.

The controversy began late last year when Alinghi, the Swiss racing team and winner of the previous America's Cup, announced its decision to hold the next regatta in the waters off RAK. According to tradition, the title-holder chooses the venue. However Alinghi's decision was immediately contested by Oracle – the American challenger – alleging RAK's proximity to Iran posed a security threat to the team in the water. These concerns propelled the matter to the American courts and on October 27th the presiding judge ruled that RAK was not a suitable venue for America's Cup, citing a stipulation in the Deed of Gift – a 19th century document that governs the regatta – that the race cannot be held in the Northern Hemisphere between November 1 and May 1. The one-on-one showdown is scheduled for February 8.

Valencia, a Spanish port town, stands as the alternative venue and since it was mutually agreed upon by both teams, is legally acceptable despite the fact is located squarely in the Northern Hemisphere. But, should Alinghi win the appeal, the race will be passed back to RAK. On November 25th the Swiss team again reaffirmed its preference to hold the race off the emirate's coastline, which it chose for its temperate climate and smooth waters.

Excitement over the race has been brewing in RAK since Alinghi announced its choice in August. RAK has reportedly spent Dh440m ($120m) in preparation for the event, including the construction of a man-made island to house facilities for the contenders. Local hotels were reportedly reserved to capacity for the event weekend. Real estate construction around Al Hamra Marina – the proposed hosting site – picked up in recent months as developers anticipated an uptick in demand from visiting yacht enthusiasts – a trend observed at past America's Cup venues.

As RAK awaits the appeal decision, the prospective windfall of tourism receipts from the race hangs in the balance. But with or without America's Cup, tourism officials in RAK retain an optimistic view of the sector's future.

The emirate unveiled four new hotels this year and there are several more scheduled to open in the coming months, according to comments from RAK Investment Authority (RAKIA) officials to the press. Indeed, tourism authorities have been busy promoting the potential of the emirate to the world, on the back of publicity momentum from the America's Cup drama.

RAK representatives at the World Travel Market – an annual international trade show – held in London earlier this month were busy advertising the leisure offerings of the emirate. The event is a chance to target the European market, which accounts for about three quarters of all visitors to the emirate. The state is keen to attract a greater number of charter flights from the continent and air service has been steadily growing, with three new direct charter routes announced in the fourth quarter. Transavia Denmark began service from Copenhagen in October, joining Primera Air flights from Copenhagen and Stockholm to RAK, which began the same month. NEOS Spa is due to start its RAK route from its base in Milan in December.

Meanwhile, the UN World Tourism Organisation (UNWTO) suggests that the sector downturn has likely bottomed out and expects moderate growth – from 1 to 3 percent – in 2010. The Middle East tourism market has typically fared better than its Western counterparts throughout the economic crisis and could be one of the fastest-growing segments as the world creeps out of the recession.

RAK is hoping to attract an increasing number of regional travellers. Under its tourism plan, officials hope to increase tourist arrivals from 215,000 in 2008 to 2.5m by 2012. In order to meet these goals, the emirate needs to increase its hotel capacity. Efforts are well underway, with a total of 3700 rooms planned over the coming years, trebling current supply. An estimated $5bn worth of projects are currently planned or under way.

If the America's Cup deal ultimately falls though, the international media coverage of the ongoing spectacle has at least broadcast RAK's name around the world, raising the profile of the emirate. This will undoubtedly be useful as new hotels come on-line and the economy continues to diversify, with tourism featured as a high-potential industry.

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