As you'd expect, the United Arab Emirates is not a particularly gay-friendly destination. It has sodomy laws punishable with imprisonment, but with such a diverse population everyone knows there's plenty of gay locals and visitors. It's also slightly more liberal than other Arab states, with no internet control, although many Western sites are blocked and foreigners have been jailed and deported for simply attending private "gay parties." It's strongly advised that you respect local customs and laws, and avoid public displays of affection.
The city has a growing and exciting nightlife, mostly frequented by Western expatriates and wealthy Saudis. Obviously there are no gay bars and clubs in town, but everyone mixes at the top spots, usually connected to hotels. Gay crowds also sit at the cafés of the Dubai Mall, using bluetooth connection on their cell phones to "connect" with others.
The best beach for people-watching and meeting people is the public Jumeirah Beach by the Hilton hotel (see below), although it's important that you be discreet and respectful, and beware of the undercover police looking for "indecent acts."
There are obviously no gay hotels in Dubai, but in order to feel safer and be surrounded by like-minded people, you may want to stay at Western chains close to Jumeirah beach. Here are your options:
Hilton Dubai Jumeirah
This is as close as you get to Jumeirah Beach. You get your feet on the sand as soon as you step out the door, and a variety of restaurants, cafés and shops are right behind you on The Walk.
Sofitel Dubai Jumeirah Beach
Here you can wake up and fall asleep to sea views, as the rooms have balconies overlooking the beach. To get to the sand you just have to walk a few feet, and there's also an outdoor pool and sauna open throughout the year.
Sheraton Jumeirah Beach Resort
It has its own sandy beach, but the public beach is just a short walk away. Some of the rooms face the sea, while others look out to The Walk. It has a gym and a sizeable outdoor pool.
Le Royal Meridien Beach Resort & Spa Dubai
For true 5-star service, choose this resort which is just a 2-minute walk from the beach. It offers a spa, outdoor pools, a gym, and outdoor restaurants.