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Value-conscious investment

updateDate = “Sunday, 09 December 2007 04:00” document.getElementById(‘crumbs-dir’).innerHTML = ‘TRAVEL & HOSPITALITY / NEWS /’by staff writer on Sunday, 09 December 2007

DIC’s head of MENA investments Rabih Al Khoury.

Dubai International Capital (DIC), the major stakeholder in Ishraq Gulf Real Estate Holding Company, has explained its reasons for investing in Express by Holiday Inn.

DIC’s head of MENA investments Rabih Al Khoury said the draw of investing in a low-cost hotel chain in the Middle East was two-fold.

“When it comes to Dubai, it’s very important for us to do the right thing. We have a company owned by His Highness Sheikh Mohammed bin Rashid Al Maktoum, and Sheikh Mohammed is Dubai,” Al Khoury remarked.

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“When you look at Dubai, you have a lot of very expensive hotels catering for high end tourists,” he continued. “Looking at the three-star offerings, there aren’t that many branded hotels that service the business community, which means accommodation is quite expensive.

“If you’re part of a regional middle-market company and want to have a meeting in Dubai, you can’t afford it. So it is important for DIC to support the concept that will help the growth of the business community in Dubai,” he said.

Al Khoury confirmed that the risk assessment for the new Dubai property was extremely low.

“If we decided to sell the hotel today, the land has more value than the hotel, so there are no issues there. The land was gifted by His Highness Sheikh Mohammed bin Rashid Al Maktoum specifically to develop the three-star concept in Dubai,” he explained.

But he added that developments in other countries had required in-depth analysis.

“Every market is different. Bahrain has some interesting attributes – like Dubai, it’s very cosmopolitan, with a very large expat community, whereas Abu Dhabi is starting from a very low base. They need a lot of hotels across the board. Kuwait is an interesting market that has been a bit difficult to penetrate. It’s very regulated. So every market is different and we make sure we have the right approach for each one,” he said.

Al Khoury admitted there had been some challenges setting up.

“The issues we have faced have mainly been about attracting the right people. In the region we are capital rich, but human-capital poor, so the challenge has been to get [good staff] and retain them.”

Al Khoury confirmed that over the next three years Ishraq would develop 22 additional low-cost hotels in the region, adding that the company was not worried about competition.

“Competition is the best compliment,” he explained. “We welcome competition; we actually think it will help us to define the market better.”


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