Rival takes control of hospitality firm Five-star establishment due to open in Dubai next month and boost Japanese presence Rebecca Bundhun The five-star Hotel JAL Tower in Dubai is expected to open this year after a majority stake in the hospitality company that was part of the struggling Asian airline group was bought by a rival Japanese hotel chain. Japan Airlines, which previously owned the management company JAL Hotels, in January filed for bankruptcy with US$26 billion (Dh95.46bn) of debt. The airline company, which is undergoing restructuring, plans to cut about 16,000 jobs by next March.
Last month, Hotel Okura, based in Tokyo, announced it had completed its acquisition of a majority stake in JAL Hotels. Hotel Okura has a 79.6 per cent stake in JAL Hotels, while JAL International has an 11.1 per cent stake in the company and other shareholders have smaller stakes. The 471-room Dubai property on the Sheikh Zayed Road is JAL Hotels' second in the UAE and in the Middle East. Its other hotel is at a resort in Fujairah. Both are owned by ACICO, based in Kuwait.
"The JAL Tower is very important for the company," said Laurent Rigaud, the general manager of Hotel JAL Tower Dubai. "The goal is to become a strong Japanese brand in the local market and also overseas. So a strong focus is being put on the development overseas." The 51-storey property has been affected by construction delays but the management hopes to open the hotel next month. "It's the first time we have a Japanese brand opening in Dubai," Mr Rigaud said
The hotel chain will continue to work in partnership with the carrier, he said. "We are still going to continue to work together because an airline is always a strong partner." JAL Hotels has a total of 57 hotels worldwide. Mr Rigaud said he believed the company would look at expansion opportunities in the Middle East. "The region is full of opportunities. We have an area for growth here." Okura Hotels and Resorts has hotels in Japan, Amsterdam, Korea, China and Hawaii.
An increase in the number of rooms has created a competitive operating environment for hotels in the emirate. At the end of June, the number of hotel and hotel apartment rooms stood at 67,369, an almost 16 per cent increase from the 58,188 available rooms last year, data from the Dubai Department of Tourism and Commerce Marketing (DTCM) show. New hotels that have opened in Dubai this year include the Armani at the Burj Khalifa, the Sofitel Jumeirah Beach and the Pullman at the Mall of the Emirates. Following sharp falls in rates last year, amid a global downturn in travel, business at Dubai hotels has stabilised this year as cheaper prices have attracted more tourists. The number of guests staying at Dubai hotels rose by almost 9 per cent in the first half of the year, the DTCM said.
The new JAL hotel in Dubai will compete with other nearby luxury properties, including the Emirates Towers and Fairmont hotels. The hotel will also launch a number of eating places, including Japanese and Arabic restaurants. "Competition is very healthy because it keeps you on your toes," said Mr Rigaud. rbundhun@thenational.ae