World Watch
By Karyn Strauss, Senior Editor -- Hotels, 5/31/2006 11:00:00 PM
MIDDLE EAST
Mideast Deal Pipeline Overflows
DUBAI Major hotel deals originating from Arabian Gulf states continue at an incredible pace. In late April and early May in Dubai, during the Arabian Hotel Investment Conference and the subsequent Arabian Travel Mart, numerous billion-dollar hotel deals were announced by local developers—many in concert with global hotel companies. It is reported that the value of projects in the region has risen by more than US$250 billion in the first three months of 2006 and now exceeds US$1 trillion
 Trump International Hotel & Tower, The Palm, Jumeirah, Dubai. |
Two US$27 billion-plus mixed-use hotel development plans for Abu Dhabi and Dubailand were announced on the same day. The Abu Dhabi Tourism Authority is developing Saadiyat island, similar to Singapore’s Sentosa island, in three phases between now and 2018. Saadiyat will have six distinct districts connected by a freeway. The island will have (11 mi.) 19 km of beach, two golf courses and 29 hotels with more than 7,000 rooms, including a proposed “7-star” hotel, along three marinas. Abu Dhabi will also be the focus of the local ALDAR Properties, which plans to build 32 hotels there within the next three to seven years. ALDAR has already announced its Abu Dhabi waterfront resort, Al Gurm, which will be managed by Banyan Tree Group.
In neighboring Dubai, Tatweer, a unit of Dubai Holding, will build a US$27.3 billion Bawadi tourist strip in the developing Dubailand mega-project that will boast the world’s largest concentration of hotels—31 with more than 29,000 rooms and 100 theaters presenting live cultural shows. The centerpiece of the project will be the world’s largest hotel, Asia-Asia, due to open in 2010 with 5,100 4-star rooms and 1,400 5-star rooms.
“The Middle East will continue to grow in importance—both as a destination and as a source of capital,” says Nick van Marken, an expert on Middle East tourism with Deloitte, London. “Gulf-based capital will underpin real estate development in the wider region (as well as Africa), and will also focus on irreplaceable assets in mature markets with high barriers to entry.”
At the other end of the spectrum the two other major announcements made during the events involved budget hotel brands. IFA Hotels & Resorts is partnering with Simon Woodroffe’s YOTEL economy “cabin-hotel” brand. A project is planned for Dubai, and the partners are negotiating across the region and into continental Europe, where they prefer international airport gateway locations. At the same time, EasyGroup and EasyHotel has agreed to a licensing agreement with Istithmar Hotels, Dubai, to open 38 hotels. The first eight are scheduled to open next year in Dubai, Bahrain, Saudi Arabia, Oman and Morocco. Istithmar is also an investor in the US$1.5 billion, 2,000-room Atlantis project with Kerzner International on The Palm Island, Dubai.
Three more deals just announced include Whitbread’s joint venture with Emirates Group to launch the UK’s leading budget brand, Premier Travel Inn, in the Gulf region with three set for development in Dubai. Kempinski Hotels has joined forces with Guidance Financial Group in Dubai to launch a US$500 million fund to create the luxury Shaza brand, which will offer hospitality based on Middle Eastern cultures and represent authentic Arab and Islamic heritage. And not to be outdone, The Trump Organization, New York, and Nakheel, Dubai, have unveiled a new design for the US$600 million, 48-story mixed-use Trump International Hotel & Tower, the centerpiece of The Palm Jumeirah. This deal marks the initial development in Nakheel and The Trump Organization’s joint-venture in the Middle East, which includes exclusive rights for 19 countries in the Middle East and 17 major brands.
“The number of confirmed projects demonstrates the confidence developers and investors have in the capital of the UAE,” says Peter Goddard, managing director, TRI Hospitality Consulting, Dubai. “TRI anticipates this number to increase further given the large number of unconfirmed projects and the fact that many well-known international brands are not represented yet in Abu Dhabi, in particular those with a leisure and resort orientation.”
NORTH AMERICA
Kerzners Taking Company Private
BAHAMAS After a failed attempt in 2000 to take resort operator Kerzner International Ltd. private, this time around company Chairman Sol Kerzner and his son, CEO Butch Kerzner, have reached an agreement to acquire the company. The Kerzners, along with an investor group that includes Istithmar PJSC, Colony Capital LLC and Goldman Sachs' real estate investment arm, raised their offer from US$76 to US$81 per share, prompting Kerzner International to end its solicitation of superior proposals. The total cost of the deal, including the assumption of US$599 million of net debt, is about US$3.8 billion. The transaction is expected to close mid-year, pending regulatory and shareholder approvals.
According to a press release, Kerzner International will remain committed to current joint venture development plans in Dubai and Morocco, and will continue to focus on its proposal to develop a casino resort in Singapore.
| The Middle East should generate US$147.6 billion of tourism activity in 2006, growing to US$279.4 billion by 2016. (WTTC) |
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