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The Banyan Tree Al Wadi, with 101 villas, is the company's only hotel in the UAE.
V7 Photography
The Banyan Tree Al Wadi, with 101 villas, is the company's only hotel in the UAE.

Banyan Tree goes wild to attract tourists

The market warms to luxury desert resorts as a Singapore hotel management company starts to blaze trails in frontier hospitality sector.

Banyan Tree, the hotel management company, has its sights on the next frontier of tourism after inaugurating its luxury desert resort in Ras al Khaimah at the weekend. Ho Kwon Ping, the executive chairman of the Singaporean company, said there was still much development to be done in desert tourism worldwide.

"There's a sector of tourism called frontier tourism, where people are really going further afield, into the Antarctic, into the depths of the ocean," Mr Ho said. "There is going to be a lot to do in terms of desert tourism." Abu Dhabi's Tourism Development and Investment Company opened the Qasr Al Sarab Desert Resort last year. Emirates Group opened the Al Maha Desert Resort and Spa, which is described as an "ultra-luxurious" Bedouin resort in the Dubai Desert Conservation Reserve, in 1999.

But analysts say there has been little development of desert tourism in the UAE, mainly because of the expense and logistics involved in building such resorts. "The desert part has been so far lagging in timing and strategic consistency," said Chiheb ben Mahmoud, the senior vice president at Jones Lang LaSalle Hotels for the MENA region. The 101-villa Banyan Tree Al Wadi in RAK is the company's only hotel in the UAE after the Angsana Dubai closed last October. The resort is owned by Rakeen, the government-owned property developer.

There is also a 32-villa resort on the beach nearby as part of the same project. Banyan Tree took on the management of the adjoining Al Hamra golf course in January. The desert resort is charging room rates of between about Dh2,600 (US$707) and Dh4,500. "[The running costs] would be reasonable within the range of the kind of room rate that we are going to get, so we still deliver good returns to an owner," Mr Ho said. "You can see that the fundamentals are still very strong."

"There will inevitably be a bounce back and we want to part of that bounce back." RAK was not yet established as a tourism destination, but was likely to grow in popularity, he said. "I think it is fair to say that if you look at the UAE, certain places have geographical uniqueness to them. Dubai doesn't have geographical or touristic uniqueness. Dubai is unique because of what [Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai] managed to do himself.

"Our style is largely to be prime movers in the places we go to. We do think many more projects will come up as a result of this." Banyan Tree said last week that work on Al Gurm Resort in Abu Dhabi, an exclusive beach hotel on the western side of the main island, had ground to a halt. Aldar Properties, Abu Dhabi's largest developer, signed an agreement in 2006 with Banyan Tree to manage the resort.

The development was billed as an eco-friendly resort hotel with 161 suites next to a protected mangrove forest. It was originally scheduled to open in the last quarter of 2007. "We've had some discussions with them [Aldar] whereby I think they feel that the project might not be financially feasible and therefore if they wish to terminate on that basis, we would terminate very amicably," said Mr Ho. "If a partner cannot make money doing something, we think it's probably wise that they don't do it."

Banyan Tree is in discussions with developers in Abu Dhabi over a number of projects on the emirate's natural islands, he said. Mr Ho said it was not looking for opportunities in Dubai. "I would say the dust needs to settle in Dubai; not only financially, but in terms of the hotel industry sector." Banyan Tree is also in a dispute with the property developer Meydan over a hotel it was to manage at the new Meydan Racecourse in Dubai. The company said also last week it had terminated the management contract for its Al Areen Desert Spa and Resort in Bahrain after a dispute with the owner.

But the company is still looking for more interests in the region. @Email:rbundhun@thenational.ae

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