Dubai Holding has announced that its hospitality business, Jumeirah Group, is to operate its first hotel in Saudi Arabia after signing a deal for a new five-star hotel in Mecca.
The investment company has signed with Jabal Omar Development Company to operate a major hotel housed in four towers offering views overlooking Mecca's Grand Mosque. Jumeirah Group's hotel will have 1,033 guest rooms and will also operate 93 villas and a range of food and beverage outlets, as well as an executive lounge, a gym and more than 90 retail units. The hotel is due to open in early 2019, it said.
The deal will take the total number of hotels Jumeirah Group operates to 22, housing some 7,164 rooms. The latest move follows a similar agreement signed by Dubai's Emaar Properties last month to open an Address Hotels + Resorts-branded property with 1,490 hotel rooms and suites, also near the Grand Mosque in Mecca, which is also due to open in 2019.
Edris Al Rafi, the chief executive of Dubai Holding, said the deal marked a "key milestone" in the next phase of Jumeirah Group's international expansion strategy.
"It will also mark the group's first presence in the kingdom of Saudi Arabia in [Mecca], one of the holiest sites in the world and the highest in real estate value."
Yasser Al Sharif, the chief executive of Jabal Omar Development , added: "We are pleased to work with an established global hospitality brand grown in our region, such as Jumeirah Group, and we look forward to a fruitful cooperation."
A study published last month by CBRE stated that the supply of hotels in Mecca is set to increase by more than 80 per cent over the next five years.
Although the city currently has 45,000 rooms in 110 hotels, some 35,000 more are due to be added between 2017 and 2022.
Jabal Omar Development is the firm responsible for developing more than 2 million square metres of hotel and residential tower clusters overlooking the Grand Mosque.
Four phases of the project have been launched so far, but in March the company said it had gained permission for a fifth, sixth and seventh phase.
The company has said it also expects to complete the sale of three of the early hotels it has developed – the Mecca Conrad, Mecca Hilton and Hyatt Regency Mecca – to Alinma Investment in a 6 billion Saudi riyals (Dh5.87bn) transaction that is due to complete next month.