Dubai will have the world's first underwater hotel by 2006. Billed as the ultimate in luxury living, the Hydropolis Hotel will cost an estimated $500 million and feature over 200 suites.

While the technical details are still being worked out, the property will be built down to a depth of 20 metres, some 300 metres off the Jumeirah coast.

Joachim Hauser of Germany, who has had extensive knowledge of the Middle East through a slew of products in the last two decades, has conceived the project, which is being actively promoted by Dubai Development and Investment Authority.

The latter is currently sounding out potential investors to join in, and already some 20 per cent of the required outlay has been committed.

Officials with the promoters declined to get into specifics about who will manage the hotel. The hotel has three elements - the land station, a connecting tunnel and the submarine complex.

The land station will be the reception area, and will also feature administrative facilities. The connecting tunnel provides the access, while the submarine complex is the hotel itself.

In the recent past, Dubai has taken to the seas to come off with mega projects to cement its position as a global tourist destination. Burj Al Arab was the first, followed by the two islands comprising The Palm project.