Al Habtoor weighs plan to build biggest hotel in UAE

Project on Sheikh Zayed Road in Dubai would project would have 2,000 rooms and suites, 33% bigger than the Atlantis Palm, the largest hotel operating in the country today.

The Al Habtoor Group is exploring plans to build the biggest hotel in the UAE, on Sheikh Zayed Road in Dubai.

Khalaf al Habtoor, the group's chairman, said the project would comprise about 2,000 rooms and suites, considerably larger than the 1,539 rooms offered at the Atlantis the Palm, Dubai, the largest hotel operating in the country today.

Mr al Habtoor said he was optimistic about the hotel industry in the UAE despite the broader economic challenges in the region.

"Hotels are doing well. There is improvement - 2010 was good, and 2011 will be even better," he said.

Mr al Habtoor said the company was not seeking a partner either for funding the hotel or managing it, and declined to elaborate. "I hate partnerships," he said.

Al Habtoor Group includes a number of businesses across sectors including cars and civil engineering. Mr al Habtoor said last week his company was still owed more than Dh4 billion (US1.08bn) for projects long since completed.

In Dubai, the company owns the Habtoor Grand Resort Spa and three Metropolitan hotels. Al Habtoor also owns two hotels in Beirut.

If the new Dubai hotel materialises, it will join a burgeoning supply of rooms in the emirate. This year, 10,000 rooms are scheduled to come online, according to the Dubai Department of Tourism and Commerce Marketing.

The number of hotel rooms and hotel apartment rooms increased during the first three quarters of last year to 68,654 rooms from 59,372 in the same period a year earlier.

Such increases are producing an challenging environment for hotel operators. But more competitive rates have also helped to attract tourists who may have previously considered Dubai too expensive.

The emirate's tourism industry is also turning to new markets such as China and India in an effort to fill hotels in Dubai.

Occupancy levels are down from their pre-crisis peaks but despite the rise in supply, the emirate is still attracting relatively healthy levels of business compared with other global destinations, analysts say.

Other major hotel developments in progress on Sheikh Zayed Road include the Gloria Hotel, located in Dubai Media City. The hotel last year opened about 450 of its rooms, about 25 per cent of expected capacity once it is fully completed.

Emirates Group, meanwhile, is building a Dh1.8bn 1,614 room twin-tower hotel project on Sheikh Zayed Road, adjacent to Business Bay, which is due to be managed by Marriott.