Package holidays on the Palm expected by 2008
Zabeel Investments inks US $190 million deal with European hotelier
Zabeel Investments and TUI Hotels and Resorts have signed a deal to build two 300-room hotels on the Palm Jumeirah. The project is valued at AED 700 million (US $190 million) and is expected to be completed by summer 2008.
The Dubai-based investment company is well known in the region for its interests in commercial real estate development and management in the UAE, GCC and overseas. By teaming with TUI Hotels and Resorts, which manages the World of TUI hotel companies, Zabeel is hoping to bring new diversity to Dubai’s tourist industry by introducing European package holidays to the emirate.
“Dubai has all the big hotel chains, but this is the first hotel development we know of in the region to be run by a holiday company,” said Mohammed Ali Al Hashimi, executive chairman of Zabeel Investments. “With this project we will be targeting a market that is not really being tapped at present.”
Al Hashimi further explained that the properties would target the German package holiday market. He is confident that demand from this sector would be sufficient to ensure good occupancy rates from the outset. “Dubai is a very popular place for German tourists. They even tend to come in the height of summer, so we expect year-round business,” he said.
Under the contract, Zabeel will put up all funding for the project but is happy to leave the running of the two properties in TUI’s capable hands. With 300 hotels and 165,000 beds TUI Hotels & Resorts is Europe’s largest holiday hotelier and is number 12 in the ranking of the biggest hotel chains around the world. The company already has a presence in Egypt, Tunisia, Turkey and Morocco, but had been looking for an opportunity to bring its brands to Dubai for some time.
The TUI properties, one a Robinson Club hotel and the other an Iberotel resort, will cover in excess of one million square feet of land on the beachfront on the crescent of the Palm. The architectural style of both properties will reflect local influences. “We will be building the development to TUI’s specifications, and the design will be traditional and Arabic,” says Al Hashimi. “We wanted to bring something unique.”
Robinson has a 73% market share in Germany and is the market leader in the premium segment for club holidays, with 21 complexes in eight countries. Its property on the Palm will include a range of entertainment and leisure facilities and “will reflect the exclusive image of Dubai as well as the Arab culture and architecture,” according to Max-Peter Droll, Robinson’s managing director.
Iberotel, which already has a significant presence in Egypt and Turkey, will also offer an array of restaurants and bars, along with fitness and wellness centres, but will appeal to a slightly different market segment.
Al Hashimi is confident that TUI’s plans to combine the unique setting of the Palm with all the facilities of a luxury island resort, and package the product at an affordable price, will bring positive results.
“It will be a good deal for guests and opens the door for the previously untapped package holiday market,” he said.
“This will introduce a lot of people to dubai who have never been here, or perhaps the Middle East before.”