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UAE’s Jumeirah Group eyes Europe expansion, no bond sales

Mon Oct 24, 2011 10:51am BST

DUBAI (Reuters) – Luxury hotelier Jumeirah Group, owned by the ruler of Dubai, is looking at doubling its properties under management globally by early 2012 and tapping into growing tourism demand, its executive chairman said on Monday.

“We will open in Kuwait, Majorca, and Azerbaijan. We will almost double the number of hotels under management for Jumeirah in a 14 month period,” Gerald Lawless told the Middle East Investment Summit held at Reuters’ offices in Dubai.

“We have a few other potential projects “bubbling”… Some of them are in Europe,” he said, adding the Jumeirah Group would count 20 hotels by the end of the first quarter 2012.

Jumeirah, which competes with brands such as Mandarin Oriental or Four Seasons, recently opened brand-managed hotels in Frankfurt, the Maldives and Shanghai, and already has an extensive portfolio in Dubai, such as the sail-shaped Burj Al Arab hotel and the Jumeirah Beach Hotel.

“It is looking very good for the future bookings for the winter period. Tourism is holding up very well,” Lawless said.

He said it was difficult to say whether Dubai is seeing an additional influx of tourists to Dubai due to regional unrest.

Average room rates currently stand at 1,700 dirhams, up 5 percent compared with the same period last year.

Occupancy levels at Jumeirah’s hotels in Dubai reached 80.5 percent, Lawless said, up 6 percent from a year earlier.

Lawless said 20 percent of visitors came from the United Kingdom, 14 percent from Russia, and there were increasing numbers from China.

Since most of the future properties will be managed by Jumeirah, rather than being directly owned, Lawless said the group saw no need for substantial financing.

Jumeirah Group, a unit of Dubai Holding, the personal investment vehicle of the emirate’s ruler Sheikh Mohammed bin Rashid al-Maktoum, was not currently planning an initial public offering (IPO.L) or a bond issue, Lawless said.

“We are very happy with our levels of financing and debt at the moment,” he said. “The funding positions are not difficult for us, we are in a strong position where we have investors who own the hotels, they build the hotels and we brand them.”

“We are asset-light … We have been very encouraged by the success of the acquisition of management contracts and it continues to grow,” Lawless said.

(Reporting by Martina Fuchs; Additional reporting by Jason Benham; Editing by Jon Loades-Carter)


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