Dubailand to double Dubai hotel rooms with $27bn project

Reminiscent of the themed hotels of Las Vegas and Disneyland in Orlando, Florida, the Bawadi district will add 29,200 rooms to the Dubai hotel inventory by 2016, and includes 31 hotels and more than 100 restaurants.

This announcement came as the travel industry bedded down for its annual trade fair in Dubai, the Arabian Travel Market. Again Dubai has eclipsed the tourism plans of the region with a stunning new vision of the future.

Laid out over 139 million square feet in Dubailand, the Bawadi hotel zone is going to receive an investment of $11 billion from the Dubai Government and the balance of more than $16 billion is to be raised from investors.

World's biggest hotel

Centre piece of Bawadi will be the world's largest hotel, Asia-Asia which will have 6,500 rooms of which 5,100 will be four-star and 1,400 five star rooms. The Asia-Asia hotel is scheduled for completion in 2010.

Anybody reading the new book from UAE Prime Minister and Ruler of Dubai, General Sheikh Mohammed bin Rashid Al Maktoum about his vision for the emirate should not be so surprised by this initiative. The vision of Dubai is somewhat akin to the biggest business plan in the world, according to those who have read the book in Arabic, which will be available in English shortly.

The stated objective is for Dubai to have 15 million tourists a year by 2012 compared with 6.2 million last year. This clearly requires
massive growth in hotel rooms - and Bawadi will make a big contribution, although many hotels are already under development in the emirate.

Bawadi is being developed by a unit of Dubai Holding called Tatweer headed by Saeed Al Muntafiq, who has been leading the multi-billion dollar Dubailand theme park project since its inception and has an excellent track-record of delivering ambitious Dubai projects to date.

Government-led investment

Tatweer is to construct 12 themed hotels with 12,450 rooms and find investors for a further 19 hotels with 16,750 rooms. This is the classic Dubai Government pattern, with the government acting as a lead investor. It is interesting that the government is taking such a large part of the investment in Bawadi for itself.

Perhaps the Dubai Government is almost reluctant to give up too much ownership in this lucrative sector to outside investors. Indeed, much of the sector remains under state control despite the potential for the privatization of Emirates Airline, for example.

This confidence will doubtless not be lost on potential hotel investors who have a rare opportunity to buy into the Dubai tourism sector in the Bawadi district, and it is going to be fascinating to see who emerges as the main investors in this zone. But with the present Dubai occupancy and room rates, they should be queuing up.