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$150m deal to finance 20 Express by Holiday Inn hotels in GCC

ABU DHABI, 2 Oct, 05 (WAM) - A consortium of 12 regional investorswill finance the US$150 launch and development of more than 20Express by Holiday Inn hotels across five countries in the GCC.

The owning company for the hotels, Ishraq, will control therights to the three-star brand - the first international brandof its kind to enter the Arabian Gulf countries on this scale- across the GCC, with the exception of Saudi Arabia, accordingto a press release.

Dubai International Capital (DIC), the international investmentarm of Dubai Holding, is Ishraq's anchor investor and the keyplayer in the deal, which was structured, arranged and placedby Addax Investment Bank, the Middle East investment bank basedin Bahrain.

The 20 properties will be operated on behalf of Ishraq by HospitalityManagement Services Middle East Ltd (HMS), the master franchisedeveloper and operator of Express by Holiday Inn in the Gulfstates. The first property will be built at Knowledge Village,part of the Dubai Technology and Media Free Zone (TECOM).

For DIC, the international investment arm of Dubai Holding,this is the fourth major strategic investment outside Dubai inrecent months.

The company invested $1 billion in DaimlerChrysler, making itthe company's third largest shareholder, followed by the $1.5billion acquisition of The Tussauds Group in the UK - the largestoperator of visitor attractions in Europe. DIC has also launchedJordan Dubai Capital, a $280 million investment company targetingopportunities in the Jordanian economy.

Sameer Al Ansari, CEO of DIC, said: "There is a huge gap inthe market for branded budget hotels, which we believe are essentialto maintain the target visitor figures for the next 10 yearsin the Gulf.

"Express by Holiday Inn is the largest budget hotel brand inthe world, with proven results, and the launch in the MiddleEast will help fill the gap for affordable accommodation at guaranteedquality.

"This move really reflects the development of tourism in theGulf which, to date, has concentrated on iconic world-class projects.

We have traced the rise and profile of inbound tourists and haveidentified that the time is right to tap into the three-starmarket which is flourishing around the world.

"Further to this, this is an example of DIC widening its foreignportfolio while investing in long-term projects that will benefitboth the UAE and the Gulf." Yousef Al-Essa, general manager ofAddax Investment Bank, said: "This is the first deal of its kind,in terms of profile, regional spread and investors, encompassingthe premier institutional and high-net worth investors from eachof the five countries included in the deal.

"In fact, the transaction met well with potential investorsand was heavily over subscribed.

"What makes the deal stand out is that this is the first timethat investors throughout the Arabian Gulf countries have cometogether to develop a hotel fund in the Middle East with theobjective of creating a chain of hotels under the same brandname across multiple countries.

"In addition, the pace of the project is remarkable: the developmentof 20 hotels - from land negotiations through to completion -is across five countries simultaneously, and during a periodof only five to seven years." According to WTO figures, the MiddleEast will be the fastest-growing region by 2020, with estimatedgrowth of 7.1 per cent per annum, and 69 million tourists. 37per cent of these tourists are tipped to be intra-regional travellers,with 32 per cent coming from Europe.

Thierry Lou?, managing director of the operator HMS, said: "Expressby Holiday Inn is the world's most successful and profitablebudget hotel brand with more than 1,500 hotels worldwide, anda new Express hotel opening every four days.

"The move to market will be fast with the first hotels openingin Dubai at the end of 2006 and the rest of the hotels open by2010.

Chris Moloney, Chief Operating Officer, InterContinental HotelsGroup, Middle East and Africa, explained: "There is a need forthis type of internationally branded three star hotels that providequality service at value for money.

"We have made a commitment to the GCC market and have the abilityto respond to either owner's or customer's demands. This is whywe looked for partners that really understood what the brandis about."