Signs of recovery for the Palm

The large breakwater encircling the Palm Jumeirah, known as "the crescent", was by now supposed to be a bustling destination filled with hotels but not a single property has opened since the much-publicised launch of Atlantis two years ago. There are signs of progress for the island's hospitality market, however, with some properties nearing completion.

The first of the hotels expected to open is the One&Only The Palm resort at the end of the west side of the crescent, with 90 rooms and four private beach villas. The resort is expected to be open by November. On the opposite side, work is also progressing on an Asian-style, low-rise resort, the Royal Amwaj, which is to be managed by Moevenpick and is expected to be ready before the middle of next year.

"Approximately 10 hotels are expected to enter the [Palm] by the end of 2013 … although the number of properties is significantly lower than what was planned in the past years," said Frederic Lefebvre, a vice president at Jones Lang LaSalle Hotels. Thirty five-star hotels were planned for the island, with 14,000 rooms, more than doubling Dubai's number of beachfront hotels, according to the website of the property developer Nakheel.

"Hotel projects are at a different stage of development," he said. "We estimate that the current hotel projects will open between the end of 2010 and the end of 2013, increasing the hotel supply by approximately 3,000 [rooms]." The masterplan projected he island as a major part of Dubai's tourism industry but original plans to have the Trump International Tower and Hotel as its centrepiece and the retired ocean liner the Queen Elizabeth II moored there now seem doubtful.

Dotted around the crescent are a number of empty plots, some bearing signs for lavish hotel properties on which work has yet to start, including The Palm Jumeirah Hotel and the Sea View Club Hotel and Apartments. Others display the beginnings of development that have since been put on hold, such as the Habtoor Grand Resort and Spa. The luxury Kempinski Palm Jumeirah Residences apartment building is complete but next door the Kempinski Hotel Emerald Palace structure is unfinished, although it was originally scheduled to open last year.

At the Taj Exotica Resort, Spa and Grandeur Residences the apartments, housed in another palatial building, are not far off completion - but the hotel has yet to be built. Girish Borkar, the project manager for Arch Group, the main consultants on the Taj Exotica project, said the hotel was put on hold last year but work was expected to resume later this year. "It's on hold because of value engineering and re-design," he said.

"The main reason behind project delays or cancellation is the lack of financing and cost of debt due to the current economic situation," said Mr Lefebvre. "With the onset of the current crisis, some sub-developers have also taken the opportunity to re-engineer their earlier concepts and ensure their long-term viability, hence postponing their initial plans. Delays in the development of hotel projects on Palm Jumeirah may prove to be beneficial for the market as it will allow for a smoother absorption of supply."

But the hotel on the crescent in the most advanced stage of development is the Turkish-style Ottoman Palace, which was this year rebranded as the Zabeel Saray. Its opening is being delayed by management contract issues, say sources close to the situation, although an official announcement has yet to be made. 

rbundhun@thenational.ae