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Moevenpick finds going slow getting hotels built

By Rebecca Bundhun  www.thenational.ae

Moevenpick Hotels & Resorts, which has expanded aggressively in Dubai in the past year, says it is confident it will have a presence in Abu Dhabi despite slow construction progress.

“In Abu Dhabi we have experienced delays,” said Andreas Mattmueller, the chief operating officer of Moevenpick Hotels & Resorts, Middle East and Asia.

Moevenpick signed agreements to manage four five-star properties in Abu Dhabi, but all the projects are behind schedule. One hotel, which was planned to be located next to Ferrari World onYas Island, should have opened last year but construction has yet to begin.

“It should be open now,” said Mr Mattmueller. “We will see what’s going to happen.” The other hotels are planned for Reem Island, Al Raha Beach and Al Ain, and are some of the 13 agreements signed in the region for properties worth about US$1.5 billion (Dh5.5bn) in total.

The hotel on Reem Island is being built by Tamouh and the Al Ain property is being developed by Sorouh. Work on those buildings has started, but they are about three years from completion. The Yas Island and Al Raha properties are being developed by Aldar Properties.

“There are several hotels planned,” Mr Mattmueller said. “We are not the only ones having signed agreements. I am sure that they will look at the opportunities and stagger the openings of the hotels. We are very confident that sooner or later we will have a presence in Abu Dhabi.”

Jones Lang LaSalle said in a report yesterday that many hotel projects in Abu Dhabi were expected to be delayed given the market conditions.

With growth in supply outpacing demand, rates and occupancy levels last year came under extreme pressure.

“The supply pipeline is expected to nearly double over the next three years, although a large portion of this inventory may not materialise during this period,” the report stated. Moevenpick Hotels & Resorts, in which Saudi Arabia’s Kingdom Holding and Kingdom Hotel Investments has a 33.3 per cent stake, is based in Switzerland.

The company, which has opened three hotels in Dubai in the past year despite the economic downturn, says its other properties in the emirate are progressing, although they are behind schedule.

The Jumeirah Lake Towers residences are expected to open by May and the hotel component is expected to open in September. Two Moevenpick hotels are under development on the Palm Jumeirah, Oceana and the Royal Amwaj resort, which are being built by the Dubai-based developer Seven Tides.

Mr Mattmueller said the Royal Amwaj property should open before the end of the year. Seven Tides also owns the Moevenpick Deira, which opened last month and the Ibn Battuta Gate hotel, managed by Moevenpick, which opened last October. Moevenpick also opened a hotel at Jumeirah Beach Residence last year.

“Sometimes when you have four or five hotels under construction, you see a lot of cash outflow as an investor, and it’s normal you say times were tough over the past two years,” Mr Mattmueller said. “So it’s about focus and I think they [Seven Tides] did that extremely well to open the two hotels first and now some cash flow is coming in they’ll finish the other hotels,” said Mr Mattmueller. Since the onset of the economic downturn, a number of hotels planned in the UAE have been cancelled or postponed.

He believes there is still room for more hotels in Dubai. Last week Dubai benefited from the instability in the Mena region, which helped push occupancy levels above 90 per cent. Many properties were completely full.

“Last week hotels were fully booked in Dubai, so the demand came back again, albeit at lower rates,” said Mr Mattmueller. “The volume is back and I can see rates coming up again, probably not to the levels of pre-2008. There are a lot of conferences going on, there was the golf this week, you have the tennis coming up. There is always something on.”

Moevenpick has further projects under development in the region in Saudi Arabia, Syria and Oman.


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