Dubai: Fairmont Hotels & Resorts has set its sights on a major expansion drive in the Middle East as Qatari Diar buys into the luxury hotel company.
"Qatari Diar is the No 1 purchaser of luxury hotels in the world," said Kent Cooper, the vice-president for hotel sales in the Middle East and North Africa (Mena) at Fairmont.
The deal saw Voyager Partners snapping up 40 per cent of Kingdom Holdings' capital in Fairmont Raffled Holding International and Qatari Diar Real Estate Investment buying the Raffles Hotel Singapore.
The latter also promised Fairmont Raffles further management contracts.
This deal reduces Kingdom's stake from 58 per cent to 35 per cent and amounts to an investment of over $840 million (Dh3 billion) which the company intends to channel towards Fairmont Raffles expansion plans, according to HVS International.
"Voyager is Qatari Diar's investment vehicle. We're very excited about this deal as it has grown the company substantially to become a global player in the luxury hotel market," Cooper said.
The hotel group currently has 60 hotels in its international portfolio, including historic properties such as the Savoy in London and the Peace Hotel in Shanghai.
Both will open in the third quarter of this year after extensive renovations. The group is opening another 14 hotels globally, but the focus is firmly set on the Middle East.
The group is also planning to launch a reservations website in Arabic to underline its association.
Fairmont Dubai, its first property in the UAE, was joined by the Abu Dhabi Fairmont Bab Al Bahr last year. Another Fairmont in the capital, the Abu Dhabi Marina City on the Corniche, is under design.
The Fairmont Mina Al Fajer near Dibba is expected to open in 2012, around the same time as the Fairmont at The Wave in Muscat.
"We're looking at other areas in Abu Dhabi as well, more properties in Cairo, Morocco and Saudi Arabia," Cooper said.
"All GCC capital cities really... are gateways like Baku in Azerbaijan with strong links to Dubai. We expect especially our Raffles and Swissôtel brand to grow in the region."
Critical mass
Becoming one too much among many is not a concern, although due diligence is called for when looking at new developments, Cooper said.
"A critical mass is needed to attract travellers [and] competition is good for business. Low occupancies were exaggerated [and] clouded by new supply. The government only recorded a 1 per cent drop in stay," he said.
He said Fairmont Dubai was affected by the crisis affecting business travel but added that the hotel was still above the city's average 64 per cent occupancy rate.
Complex to open soon
The Makkah Clock Royal Tower complex in Saudi Arabia is set to open its first hotel this summer. It houses all three Fairmont brands — the more business-focused Fairmont, Swissôtel with a convenient European air and the all en-suite Raffles presenting a more residential leisure offering.
The developer behind this around $3 billion (Dh11 billion) project is the Saudi Bin Laden Group, whilst the property is owned by the government, Mohammad Al Arkobi, vice-president and general manager of the complex with 3,000 rooms and hotel-apartments.
Around 10 million people are expected to visit the destination yearly by 2015. The Fairmont though is not on its own. Rotana, IHG, Hilton, Sofitel are also on-site. "We expect a very tough market there is a lot of competition," Al Arkobi said.
