Holiday Inn Express is bound for the GCC

International three-star hotel chain set to launch into a niche Middle East market

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By  Sean Cronin Published  October 9, 2005

The consortium with plans to build more than 20 Express by Holiday Inn hotels is close to issuing tenders for the first of the hotels to be built under the US $150 million plan. The investment is expected to be first of several new developments involving budget hotel operators in the region. A consortium of 12 regional investors will finance the development of the 20 hotels across five countries in the GCC. The owning company for the hotels, Ishraq, will control the rights to the three-star brand —the first international brand of its kind to enter the Arabian Gulf countries on this scale — across the GCC, with the exception of Saudi Arabia. Dubai International Capital, the international investment arm of Dubai Holding, is Ishraq’s anchor investor and the key player in the deal, which was structured, arranged and placed by Bahrain-based Addax Investment Bank. The properties will be operated on behalf of Ishraq by Hospitality Management Services Middle East, the master franchise developer and operator of Express by Holiday Inn in the Gulf. The first property will be built at Knowledge Village, part of the Dubai Technology and Media Free Zone. For DIC, the international investment arm of Dubai Holding, this is the fourth major strategic investment outside Dubai in recent months. The company invested $1 billion in DaimlerChrysler, making it the company’s third largest shareholder, followed by the $1.5 billion acquisition of The Tussauds Group in the UK — the largest operator of visitor attractions in Europe. DIC has also launched Jordan Dubai Capital, a $280 million investment company targeting opportunities in the Jordanian economy. Sameer Al Ansari, CEO of DIC, said: “There is a huge gap in the market for branded budget hotels, which we believe are essential to maintain the target visitor figures for the next 10 years in the Gulf. “This move really reflects the development of tourism in the Gulf which, to date, has concentrated on iconic world-class projects. We have traced the rise and profile of inbound tourists and have identified that the time is right to tap into the three-star market which is flourishing around the world.” According to WTO figures, the Middle East will be the fastest-growing region by 2020, with estimated annual growth of 7.1% and 69 million tourists.

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