Saadiyat Island is set for an Dh860 million resort.
The contractors Ghantoot Group and engineering company Sheikh Suroor Projects Department will develop the complex. It is expected to be ready by end of 2017 and will be locally managed.
The Saadiyat Island Beach Resort complex will have a low-rise 295-room hotel and 11 luxury villas, along with meeting rooms and a spa.
The agreement was signed on Tuesday between Sheikh Mohammed bin Suroor Al Nahyan; Ali Mohamed Sadeq Al Baloushi, the chairman of the Ghantoot Group; and Sami Al Khuwaiter, the projects director of Sheikh Suroor Projects Department.
Abu Dhabi aims to transform Saadiyat Island into a cultural destination, with plans that include the Louvre Abu Dhabi, the Guggenheim Abu Dhabi, a performing arts centre and the Zayed National Museum. The area would have 29 hotels, including nine beachfrontproperties.
While the cost of the plot, located between the St Regis and Park Hyatt hotels, was not disclosed, land prices have picked up on the island. The master developer of Saadiyat Island, Tourism Development and Investment Company (TDIC), said in March it would sell a Saadiyat beach plot with a book value of Dh88m for Dh300m for development of a hotel and branded residential units.
Jumeirah will be operating the hotel, according to Ahmed Marrouf, the general manager of Ghantoot Group.
The new property will be among a number of those announced for the 27-square kilometre island. Its first, Abu Dhabi National Hotels’ Park Hyatt, opened in 2011 with a 306-room property. It was followed by TDIC’s 377-room St Regis, along with 32 villas.
Under development is the delayed 354-room Saadiyat Rotana Resort, which is expected to open next year, around the same time the Louvre aims to open its doors. A 366-room Hilton is also scheduled that year.
Zayed National Museum is expected in 2016, with the Guggenheim the following year.
With such attractions, “Sadiyaat Island can support more hotels in the future,” said Makram El Zyr, the corporate vice president for research and development at Rotana.
A 208-room Shangri-La is being developed by the Dubai contractor Al Jaber group.
While the hotel operators are banking on the attraction of the museums and proximity to the city, the leisure-focused attraction focuses on a “wholesale market that is quite fickle, price-conscious and seasonal”, said John Podaras, a partner at Hotel Development Resources.
“Abu Dhabi as a whole needs to continue growing demand and attract different segments that can spread the seasonality throughout the year, building on sporting events such as the recent IPL league and exhibitions in conjunction with Etihad’s expansion of routes,” he said. “Timing will, as always, be critical in delivering the new supply of hotel rooms.”
Occupancy levels in Abu Dhabi hotels rose to 71 per cent last year as the rising competition drove down room rates. Hotel room rates last year in Abu Dhabi were 52 per cent lower than five years ago at about Dh447, according to a report from the real estate company Knight Frank.
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