Abu Dhabi's St Regis hotel completed, guests needed

Saadiyat Island: The newly opened St Regis hotel on Saadiyat Island has an occupancy of about 10 per cent this week in the face of fierce competition. But it is confident of future success.

St Regis Hotel on Saadiyat Island in Abu Dhabi. Christopher Pike / The National

Workers at the St Regis hotel on Saadiyat Island were yesterday uprooting two dead palm trees that failed to survive the first few weeks of its opening.

It is not just the natural environment that is proving a test for the new property.

As the sixth luxury hotel to open in Abu Dhabi in two months, the St Regis has to fight for every reservation. The 377-room hotel this week has an occupancy of about 10 per cent and expects to reach an average of 45 per cent for the year.

"Wherever you open a new hotel it takes a little bit of time for it to settle in the marketplace," said John Pelling, the general manager of the hotel, which is the first to open under Starwood's St Regis brand in the region. "There's a challenge with the new destination that is perhaps not as familiar as we would like it to be yet."

The resort is the second hotel to open on Saadiyat, following the launch of the Park Hyatt in November. Other luxury hotels to open their doors were the Westin at Abu Dhabi Golf Resort & Spa, a Rocco Forte and the Jumeirah at Etihad Towers, all in November. In December, a Hyatt hotel opened in the leaning Capital Gate tower.

Average room rates in Abu Dhabi last year fell 14 per cent to Dh490 (US$133.40) compared with 2010, data from the Abu Dhabi Tourism Authority showed, as hoteliers vied for business. The number of hotel guests staying in the capital rose 17 per cent on the previous year to more than 2.11 million, while occupancy levels increased 7 per cent to 69 per cent.

"The overall hospitality market for Abu Dhabi is currently dominated by the corporate and convention and exhibition sectors and a very small amount comes from leisure," said David Dudley at Jones Lang LaSalle.

"I think [with Saadiyat] the positive is that the Government is making these moves to grow leisure tourism." The management of the St Regis is confident of the long-term potential of the property and the island destination, with the hotel located overlooking a picturesque white-sand beach and the Saadiyat Beach golf course, designed by Gary Player, the former champion golfer. In years to come, the island is expected to play host to the Louvre and Guggenheim museums.

"Of course, when Saadiyat is fully developed with the Guggenheim and the Louvre, it will become a much [better known] destination globally," said Mr Pelling.

"Abu Dhabi Tourism Authority … are fairly aggressively promoting Abu Dhabi as a leisure destination now, so there's cause for some confidence that Saadiyat will soon be a lot better known than it is today."

After the Abu Dhabi Executive Council last week confirmed a budget and timetable for construction of the three primary museums on Saadiyat Island, the Tourism Development and Investment Company (TDIC), the project's master developer, announced the Louvre museums would now open in 2015, while the Zayed National Museum would open in 2016, followed by the Guggenheim in 2017.

"The important thing is that they're being developed," said Mr Pelling. "A hotel is not just for one year; a hotel is for a long period of time." The St Regis resort, which has room rates starting from Dh1,300 a night, said the GCC, Germany, the UK and Russia were among its main markets for tourists.

The hotel also has a residential element, with branded apartments that are leased and villas that are being sold and rented. Tenants have already moved into the apartments.

There is also a significant retail component to the property, with plans for 22 shops and restaurants. Leasing options would be announced soon, TDIC said.

Outlets were likely to start to open by the third quarter, the agency added.

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