Soft-Shell Crab Index

*I would like to talk about a new index I am putting together (the
Economist has its "Big Mac Index" where PPP – Purchasing Power Parity
– is calculated in US$-terms to determine whether a particular
currency is under/overvalued based on the price of a Big Mac at every
McDonald's in every capital city in the world where one is sold) – my
index is the Dubai-(Zuma and Nobu)-inspired "Soft-Shell-Crab Index" –
my goal: to simply determine which city is the most expensive in
current US$ terms.

I have been lucky to have visited several great cities in my career
(London, New York, Paris, Hong Kong, Shanghai and Tokyo – oh yeah, and
Dubai) and dined at the relevant faux-Japanese restaurants there (the
Nobus and Zumas of the world). For arguments sake, let's overlook the
slightly different brand names and owners of the faux-Japanese
restaurants in each of the cities mentioned above and assume they are
all trying to achieve the same effect (which they are – serving
made-up extremely over-priced Asian-Fusion (read: fake Japanese)
dishes - except in Tokyo of course). If we take a snapshot of today's
prices for a Soft-Shell Crab dish across the cities and simply
looking at a crude US$ like-for-like to determine which is the most
expensive, Dubai (yep you guessed it) is the most expensive by an
average of almost 25% (but did you guess it would be that much?).

Now, 18mths ago, Dubai's marketing machine would have been extremely
proud of this "most expensive" tag, as it was in keeping with the
allure Dubai was looking to create through the "most luxurious" brand.
But that was (and even wrong then if you ask me) 18mths ago. The world
has changed just a little since then. London and New York have changed
just a little since then in particular. Where London was once deemed
"too-expensive-to-breathe-in" and New York notorious for its minimum
spends on even dining-tables-for-two (if you could find a
reservation), both these once great centres-of-finance have suffered
deeper and faster than others – London's restaurant scene has been
battered (not in the bread-crumb way) with top-class establishments
having to offer deep discounts to incentivise potential diners, and as
mentioned yesterday, New Yorkers are even now haggling over the price
of their morning bagels! Paris, always a culinary hot-spot and
thronged with tourists, sits a full 30% cheaper than Dubai. Hong Kong
20% and Los Angeles 40%! London's Zuma serves the same exact dish as
its Dubai sister-establishment for a full 25% less in US$ terms – come
on Dubai, when you place yourself in context with these other great
cities, that's ridiculous.

Now, Zuma at the DIFC in Dubai is equivalent to the local pub back in
London for a quick drink after work. The only thing is, rather than
paying $6-7/pint "down the local" or even a lofty $15-20 for a double
premium-brand-vodka-on-the-rocks at a swankier London hotel-bar,
drinkers at the Dubai Zuma are having to fork out close to $50 for a
double-premium brand vodka – that is simply incredible. Hong Kong is
closer to $25, Tokyo $30 and even New York $15. Where exactly does
Dubai (and Zuma in particular) think it is? Governmental tax and
supplementary alcohol aside, there is still a significant margin being
made here. I wonder how much longer those living in Dubai (and
particularly those working in DIFC) will a)afford b) put-up-with these
prices. Indirect-taxation in this form has always existed in the UAE
but with the global-macro-environment taking such a
turn-for-the-worse, these discrepancies in cost-of-living (and
standards) are becoming blazingly more obvious.

With all the talk surrounding the financial melt-down and hitting
every major city with relentless brute-force, you would think Dubai
might take advantage of the situation and ensure it positions itself
as a desirable lower-cost location. I know the above may come across
overly harsh, but the truth is I do believe there is a great
opportunity Dubai is missing out on here, the city does have a lot to
offer and was unfortunate to have been caught off-guard during the
boom years in terms of its infrastructure (roads + metro and even
decent housing) which now nearing completion will make for a much more
pleasant living environment – bad timing. However, having spent many
conversations focused on this exact subject, those living here have
not experienced any sense of reduction in living expenses – yet. Come
on Dubai, face the facts and hear the fat-lady-singing and take full
advantage of this situation so that from the rubble you might create a
decent-attractive and affordable living environment. The opportunity
is there and Dubai has done a great job in putting itself (and to be
fair – much of the GCC) on the map – it doesn't have gas money like
Qatar, nor oil money like Abu Dhabi, but it has a lot of experience
from lessons learned – they should now take the lead in re-inventing
the Dubai offering. The Soft-Shell-Crab Index has clearly spoken.