Abu Dhabi has embarked on an ambitious plan to catapult itself from dreary to dazzling.

In 1960 the city of Abu Dhabi was not much more than a village of date-palm-thatched houses on an azure bay. There was only one paved road. It ran from the village to the dusty airstrip, which received the occasional propeller-driven DC3 plane.

When Abu Dhabi discovered the value of its vast reserves of oil, the emirate grew to become the richest city in the world, according to Fortune magazine, with each citizen worth an estimated $US17 million, according to latest figures in 2007. Shrewd and old-fashioned compared with its glitzy neighbour, Dubai, this city of 1.6 million is best known for its prudent businesses and for bailing Dubai out of bankruptcy last year.

Abu Dhabi has embarked on an ambitious plan to catapult itself from dreary to dazzling. Establishing a series of world-class festivals and employing a number of big-name “starchitects” to design cutting-edge buildings, Abu Dhabi aims to reinvent itself as the premium cultural and tourism destination in the Persian Gulf.

“We have identified tourism as key to economic diversification for the future,” says the chairman of the Abu Dhabi Tourism Authority, Sheikh Sultan Bin Tahnoon Al Nahyan, by email. “[Abu Dhabi has] huge natural assets- 400 kilometres of coastline, over 200 islands, historic oasis towns, vast desertscapes and a rich heritage which we can utilise to build this industry.”

The tiny emirate hopes to receive 7.9 million visitors by 2030 – up from 1.54 million last year, the majority of whom were business travellers.

The eye-catching Yas hotel opened on the shores of Abu Dhabi city last October as a flagship for the emirate’s brisk move into tourism.

Earlier this year guidebook publishers Lonely Planet and Frommer’s both listed Abu Dhabi as one of their best 10 cities to visit in 2010. So what should travellers expect to do and see when they get here?

Actually, not a lot at the moment. There’s the stunning Sheikh Zayed Mosque with its many superlatives (world’s biggest carpet, heaviest chandelier) and the recently opened Ferrari World, which hovers above the ground like a giant red stingray. It has an indoor roller-coaster that reaches speeds of 240km/h and a driving school for children that, once they qualify, allows them to participate in daily Junior Grand Prix races. Otherwise, sightseers might be left twiddling their thumbs by the hotel pool.

But within a few years this seaside city will have myriad attractions worthy of more than a stopover. The most exciting of these is Saadiyat Island (meaning “island of happiness” in Arabic), a pretty mangrove-fringed island a stone’s throw from the city. It is the location of an all-star line-up of architectural extravaganzas: a Frank Gehry-designed Guggenheim Museum (due for completion by 2013) a branch of the Louvre by Jean Nouvel (by 2013); a concert hall by Zaha Hadid (by 2014) and the Zayed National Museum by Lord Norman Foster (by 2012).

Nearby, Yas Island sprang into life in November last year with the first Etihad Airways Abu Dhabi Grand Prix. Guests can score a bird’s-eye view of the race this weekend from the space-age Yas Hotel, which straddles the track and offers a nightly spectacle from its undulating glass canopy of LEDs.

When finished, the $US40 billion island project will have a super-duper water park, a 500-shop mall, a Kyle Phillips golf course and 20 hotels.

Earlier this year the Yas Hotel hosted part of the annual Abu Dhabi Gourmet Festival, a two-week dining event with 21 chefs from around the world, including Australian Thai-food guru David Thompson and Grant King and Greg Doyle from Pier in Sydney.

Abu Dhabi’s hotel scene made headlines in 2005 with the $US3 billion Emirates Palace, the world’s most expensively built hotel at the time. Hotel design has since moved from pretentious to progressive. Hyatt is putting the finishing touches on the Hyatt Capital Gate, a 160-metre tower on an 18-degree slant – more than four times that of the Leaning Tower of Pisa. Clad with eco-friendly glass, the futuristic building absorbs natural light while reflecting heat. This hotel will join another 38 set to open in the next three years, including a second Hyatt on Saadiyat Island, a St Regis, Jumeirah, Westin, W, Four Seasons, Mandarin Oriental and a sexy 281-room lodge by British hotelier Sir Rocco Forte at a new commercial district on Airport Road.

Hotel developments aren’t restricted to the city. Opened in November last year by the Bangkok-based hotel group Anantara, Qasr Al Sarab could quite well be the most magnificent resort in the Middle East. Set in the stunning Empty Quarter of the Liwa Desert, a two-hour drive from Abu Dhabi’s international airport, Qasr Al Sarab has been built like a fort, with sugar-cube walls topped with parapets rising above the dunes.

On Sir Bani Yas Island, Anantara is currently building another two low-impact resorts: Al Yamm and Al Barari. The largest island in the United Arab Emirates, Sir Bani Yas was established as a conservation zone in 1971 by the former ruler, Sheikh Zayed. Fixated on the colour green (Abu Dhabi’s verdant corniche was also one of his projects), he planted millions of trees and established a breeding centre for endangered animals, including the Arabian oryx and cheetah. Zooming around a vegetated desert island in an open-air jeep to look at giraffes might feel a bit like being in a theme park but chances are you won’t find it anywhere else.

“We intend [to make the words] authenticity, exclusivity and quality bywords for the emirate,” Sheikh Sultan says.

Fast Facts

Qasr Al Sarab‘s 206 guest rooms have dark wood furniture, stone floors, rich Persian carpets and terraces overlooking the desert. There is also a spa. Rooms cost from $US272; www.qasralsarab.anantara.com

The aerodynamic Yas Hotel has 499 high-tech rooms and 14 drinking and dining options. Rooms cost from $US205; www.theyashotel.com

This article appeared in the November 13, 2010 issue of the Sydney Morning Herald and Age newspapers.