Aldar Properties has signed Viceroy Hotel Group to run the Yas Hotel, the last hotel operated by the Abu Dhabi developer.
Aldar hands management of Yas Hotel over to Viceroy
Aldar Properties has appointed the Viceroy Hotel Group to operate the Yas Hotel, marking the Abu Dhabi developer's exit from hotel management.
The Yas Hotel, which overlooks the Formula One circuit on Yas Island, was the last of the eight hotels owned by Aldar it still operated.
The Yas property will be the first hotel managed outside the Americas by the US-based Viceroy, which is 50 per cent owned by Mubadala Development, a strategic investment company owned by the Abu Dhabi Government.
Viceroy is also slated to operate a 250-room hotel, the Viceroy Abu Dhabi, planned for Sowwah Island, the new financial district developed by Mubadala.
The 499-room Yas Hotel has been operated by Aldar Hotels and Hospitality since it opened in 2009.
But the company's focus is to be that of an asset manager, not an operator.
"Aldar's business model, as an asset manager, is to leverage partnerships with global and regional operators and brands," a spokesman said.
"Bringing in an international operator of the calibre of Viceroy Hotels and Resorts to operate the Yas Hotel reflects this."
Aldar retained control of the Yas property in January when the Abu Dhabi Government bought Dh10.9 billion (US$2.96bn) of the company's infrastructure assets on Yas Island, and Dh5.5bn of residential units and land. The company also issued a Dh2.8bn convertible bond, which Mubadala purchased.
The appointment of Viceroy to run the hotel "is a positive decision and good news for all parties involved", said Chiheb Ben Mahmoud, the head of hotel advisory for Jones Lang LaSalle in the Middle East and North Africa.
"It was about time for the Yas Hotel to benefit from the support and momentum that a strong branding can bring."
Viceroy specialises in a small roster of high-end properties.
The company operates hotels in Santa Monica and Palm Springs, California; Snowmass, Colorado; Miami, Florida; and on Anguilla in the Caribbean.
The company is also developing projects in the Maldives, where it is building a 6.8-hectare resort in partnership with Mubadala, and in Beverly Hills, California.
"The Viceroy is a brand that fits in a special niche, combining luxury with modern lifestyle, and as such it helps complement the Yas Island positioning," Mr Ben Mahmoud said.
Viceroy's challenge will be to raise the profile of Yas Island as a destination, he said.
"No individual hotel can succeed on its own," Mr Ben Mahmoud said. "It is the collective effort of the Yas Island hotels coordinated with the other Abu Dhabi destinations that will help the emergence of the competitive proposition."
Hotel occupancy in Abu Dhabi increased to 69 per cent in the first four months of the year from 58 per cent in the same period last year, according to Jones Lang LaSalle data.
The capital had 690,000 hotel guests in the first four months of this year, 10 per cent more than in the same period last year, according to the Abu Dhabi Tourism Authority (ADTA).
The ADTA has increased its projections for this year and now expects a 20 per cent increase over last year.
But the capital's growth in hotel capacity drove down average room rates by 20 per cent compared with the first four months last year, as new properties intensified local competition. And the supply of rooms is set to increase again. The St Regis and Park Hyatt are scheduled to open on Saadiyat Island this year.
"Over the short to medium term, demand is expected to grow, but significant supply growth will likely result in decreasing average rates," Jones Lang LaSalle said.