Atlas Hospitality, which owns the Regent Emirates Pearl being built in Abu Dhabi, has put other projects on hold until the market improves.
Atlas Hospitality to postpone some projects in Emirates
The group that owns the Radisson Blu in Dubai Media City and the Regent Emirates Pearl being built in Abu Dhabi has put other projects on hold until the market improves.
Atlas Hospitality said it was instead focusing on its existing assets and expanding its newly launched Pascal Tepper cafe brand.
"These days you need to focus on your projects and make sure they are all profitable," said Siegfried Nierhaus, the managing director of Atlas Hospitality.
"We'll concentrate on what we have. We were [originally] looking at much more than that. We were looking at two or three more hotels. We kept two other restaurant concepts on the side. The capital is not as available as before."
A combination of the global environment and local market conditions means projects that have been designed, such as the Dubai Tower, a hotel originally scheduled to open in 2009 in Dubai Media City, will remain on hold.
Another hotel the company was considering in Abu Dhabi has been shelved too, Mr Nierhaus said.
This year, the company, which is part of the Atlas Group, launched its first Pascal Tepper French Bakery cafe in Dubai Media City.
Atlas Hospitality, which also owns the Certo restaurants in Dubai and Abu Dhabi, now has plans to roll out the patisserie-style cafes, overseen by the French master baker Pascal Tepper, across the Middle East and Asia, with locations including Saudi Arabia, Qatar, Lebanon, Thailand and South Korea under consideration.
The company is likely to partner other investors as it grows the chain outside the UAE. The Dubai outlet is the first Pascal Tepper store outside France.
A flood of food and beverage brands have recently expanded or launched in Dubai, including The Ivy and the home-grown Lime Tree Café. The casual dining segment in the UAE is valued at Dh2.2 billion (US$599 million) a year and is expected to increase 47 per cent to Dh3.24bn by 2015, according to a report by Horizons.
Meanwhile, the Dh500m Regent Emirates Pearl, a joint venture between Atlas and Abu Dhabi's Tourism Development and Investment Company (TDIC), is going ahead despite delays.
It is hoped the luxury property will open by the end of next year, Mr Nierhaus said.
"In Abu Dhabi it will be a very competitive market for sure. You will have now in the last quarter a lot of inventory coming, and in the first quarter of 2012 new inventory coming. We have to see how the market is behaving. The business cycle goes up and down."
Analysts and hoteliers expect hotel rates to come under pressure as new properties open their doors.
TDIC said this year some of its projects had been scaled back or put on hold.
Atlas is in discussions to sign a deal for a three-star hotel in Abu Dhabi where it believes there is a gap in the market for cheaper properties, with so much development having been at the luxury end in recent years, said Mr Nierhaus.