So I worked out in Dubai for about 8 months total for BCG on cases.
1. Recruiting is still strong - they don't import as many consultants from other offices for projects, but if you are recruiting for Dubai directly, it's still a strong market
2. Yes, but less so than before - KSA govt spend has cut back as oil revenues fall. The projects have more of an urgency around them (whch is a good thing, cause in the past work could be very dull/not your typical consulting case). There is more diversifcation now around other sectors, too.
3. This is the biggest draw - the lifestyle and and low taxes. I don't people enjoy the consulting work as much as they do in the US, given the caliber of clients is typically lower, the environment is less professional, and there is less of a focus on people development/work-life balance.