Construction starts on the Dh1bn five-star Park Hyatt resort, part of Abu Dhabi's cultural and tourism project on Saadiyat Island.
Work starts on Saadiyat Park Hyatt
Work started on Wednesday on the Dh1 billion (US$272 million) five-star Park Hyatt resort, part of Abu Dhabi's cultural and tourism project on Saadiyat Island. The Saadiyat Park Hyatt Hotel and Villas is due to open in the first quarter of 2011 in the Saadiyat Beach district, which will eventually house eight other hotels.
So far, St Regis, Shangri-La and Rotana have confirmed they will operate three of the hotels. A Gary Player golf course is also in the works, with the entire project expected to be completed by 2020. Saadiyat Island, which is being developed by the Tourism Development and Investment Company (TDIC), the development arm of the Abu Dhabi Tourism Authority (ADTA), will also be home to the Louvre and Guggenheim museums. Apart from its current projects, Abu Dhabi National Hotels (ADNH), which owns the Park Hyatt hotel, does not plan to take on more developments for now.
"In Abu Dhabi, we have a commitment to just build another five-star hotel at ADNEC, the Park Hyatt and the Marriott," said Richard Riley, the chief executive of ADNH. "Beyond that, we will only be redeveloping the existing properties that we now own, and upgrading them. Our pipeline is full for the size of our company." Mr Riley said that the company had to do this with its five-star properties or "they will get left behind as the new products come online". Alex Kyriakidis, the global managing director at Deloitte Tourism Hospitality and Leisure, said the Government's investment in tourism projects and the capital's sound economic fundamentals supported bringing more luxury hotels online. "I would say that Abu Dhabi will be one of the handful of cities around the world where the hospitality industry is continuing to grow," Mr Kyriakidis said. "It's defying gravity in terms of performance. Investment in tourism projects is continuing unabated by the economic crisis around the world."
Financing for the Park Hyatt development was being provided by local and international banks, said Neal Edmonds, the group director of technical services at ADNH. Mr Riley said ADNH was expecting a soft economy and lower construction costs might help reduce the total price of the project. The hotel was first announced in September last year, during the UAE's building boom. The resort will have 316 rooms, suites and villas, and four restaurants. Al Jaber Engineering and Contracting is the main contractor for the project, but the companies declined to offer a value for the contract. The TDIC, Saadiyat's master developer, said last month that falling construction costs had affected the estimated cost of the entire Saadiyat development, which originally carried a price tag of $27bn.
Mr Riley said he saw more room for luxury hotels in the capital, as well as mid-range hotels. The company's properties include Le Meridien and Hilton hotels in Abu Dhabi. "With the cultural Saadiyat project, Abu Dhabi is positioning itself properly and the market hasn't matured in Abu Dhabi like it has in Dubai," he said. Data from STR Global show that hotel rooms in Abu Dhabi have among the highest margins in the world, largely due to a limited supply of quality rooms in the capital.
But the ADTA recently cut its forecast for hotel guests from 2.7 million by 2012 to 2.3 million because of the global economic slowdown. The revised forecast is still more than a 50 per cent rise on last year's numbers. Over the next four years, ADNH plans to develop about 2,200 rooms, most of which will be in the UAE. It posted net profits of Dh150.7 million for the first quarter of this year, a 10.4 per cent increase over the same period last year. The company has two properties opening in Dubai in the coming weeks: an Al Diar hotel in Al Barsha next week and a Sofitel in Jumeirah Beach Residence next month.