DUBAI — Al Habtoor Group, a Dubai-based business conglomerate, said on Wednesday it would resume work on a Dh1 billion hotel project on the Palm Jumeirah and urged the government not to delay any of its infrastructure projects.
The resumption of work on Habtoor Island Resort and Spa project, which was originally launched in 2007 but put on hold in 2008 amid the global economic crisis, will be funded by the Habtoor Group.
It will be the first of several announcements to be made by the group before the end of the year, Khalaf Al Habtoor, Chairman of the group, said.
“We are committed to complete the project. This is funded from our own cash flow, it is not funded by any banks,” he added at a Press briefing.
“Now we think it is the right time to restart. There are lot of visitors to the country. The tourism to the country is increasing from all over the world.”
Al Habtoor urged the government to press ahead with all infrastructure projects that are either stalled or shelved. “I emphasise that this is the time for our government not to delay or dither on any infrastructure projects in our country. These things should be done now and not later. This is the time to revive the economy of our country: a time when all the raw materials and construction prices are at the lowest in the world. Such as golden opportunity will not present itself again in the future,” he said.
He said changes were made to the design of the luxury hotel, which is located on the Crescent of the Palm Jumeirah.
The 330-room property is expected to open in 2013. Al Habtoor said it would appoint a luxury international hotel brand to manage the resort.
Construction work on the 330-room hotel was stalled in the wake of Dubai’s debt crisis, which saw property prices in the emirate decline by more than 50 per cent from their 2008-peak.
The Habtoor Group is a holding company for businesses ranging from construction, hospitality, automotive and real estate, run by Al Habtoor.
Real estate analysts said the move by Al Habtoor to go ahead with the stalled mega hotel project reflects the new business confidence that is gradually building up in Dubai’s property sector in the wake of the Arab Spring.
Real estate consultancy Jones Lang LaSalle, or JLL, last week said the real estate prices in Dubai were close to bottom, aided by safe-haven investors fleeing political unrest in the wider Middle East.
JLL said Dubai’s hotel room supply could see an increase of almost 20 per cent between 2011 and 2013 as the city gradually rebounds from the credit crunch era’s tourism slump.
The property advisory firm has estimated that an additional 1,900 rooms will be delivered towards the fourth quarter of 2011, bringing the city’s total hotel supply to around 54,700 rooms. Over the next two years, the stock is forecasted to expand to 65,400 following the anticipated entry of 5,200 and 5,500 rooms in 2012 and 2013, respectively.
JLL said the improved tourist arrivals in Dubai have supported the hotel sector’s favourable performance during the past couple of years. The emirate saw a 10-per cent hike in inbound tourist traffic last year and the double-digit growth is projected to continue in the near-term period.
Hotel occupancy rates in Dubai have improved to 78 per cent this year from 72 per cent in 2010, according to data from STR Global.