Oberoi Group signs deal with Aldar to manage two hotels in Abu Dhabi

Oberoi Group signs deal with Aldar to manage two hotels in Abu Dhabi
By Himendra Mohan Kumar, Staff Reporter Published: September 08, 2007, 23:34

Abu Dhabi: India's Oberoi Group, which owns or manages 32 hotels and luxury cruises across five countries, yesterday said it had entered into a strategic relationship with the UAE's Aldar Properties PJSC, the largest real estate company in Abu Dhabi by market capitalisation, to develop two luxury hotels in the emirate.

In an interview with Gulf News, the Oberoi Group chairman P.R.S. Oberoi said the development of the two hotel properties - one at Al Raha beach and the other at the Al Yas beach - would be entirely funded by Aldar.

Sole owner
Aldar will also be the sole owner of the two properties, he added.

Aldar Hotels & Hospitality managing director Paul Bell could not immediately provide an estimate of what it would cost the company to build the two hotel properties.

Neither would he say from where the funds for these projects would be raised.

"The Oberoi Group will manage the hotels under long-term management contract that will be a minimum 20 years. The properties will be known as The Oberoi - Al Raha Beach and The Oberoi - Al Yas," said Oberoi.

While the Al Raha Beach property will have 250 rooms and 50 service apartments, Al Yas would comprise 120 villas, said Oberoi.

He declined to comment on the revenue sharing deal with Aldar for the two proposed properties, saying the information was confidential.

The Oberoi Group-managed properties would cater to the top, luxury end of the market, he said, adding that the Al Raha beach hotel would open in 2010, while the Al Yas project is scheduled for opening in 2013.

"We will bring our hospitality expertise and give our time, resource, brand equity and management to these world-class projects. Abu Dhabi has a nice coastline and Aldar is providing the right drivers to bring people in," said Oberoi.

He said that in his view, as far as the current position of hotel rooms was concerned, the "Abu Dhabi market is under-bedded."

Airport upgrade

Looking ahead, Oberoi said with the Abu Dhabi Government working on upgrading the airport infrastructure and Etihad airline purchasing new aircraft, there was bound to be an increase in "top of the scale" visitors from all over the world to the UAE, Abu Dhabi in particular. He allayed fears of a glut in the hotel industry in Abu Dhabi owing to several new projects scheduled to come on stream over the next few years.

The Oberoi Group was established in 1934. Oberoi said the flagship of the Oberoi Group - East India Hotels - currently has a market capitalisation of $1.2 billion, while its market borrowings stand at around $200 million.