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Dubai-headquartered developer Damac Properties has signed an agreement with Rotana Hotel Management Corporation for the management of its Damac Towers Riyadh project in Saudi Arabia.
The agreement will lead to the two-tower project being operated under the Arjaan Hotel Apartments brand by Rotana.
Niall McLoughlin, senior vice president of marketing and corporate communications, said in a telephone interview that Damac Properties had chosen to sign a management agreement with the regional hotel operator rather than operate through its own Damac Maison brand because Rotana had a scale in the Saudi marketplace that Damac did not.
He said that although Damac Maison currently operates around 3,000 hospitality units around Dubai, this was only its second hospitality project in the Kingdom, following an earlier opening in Jeddah.
"We wanted to go with a Saudi-centric operator who is plugged into that market," he said.
The Damac Towers project in Riyadh contains two towers with a total of 448 units. One of the towers has interiors designed by Italian fashion house Fendi, and the other by Paramount. McLoughlin said that the hospitality agreement would begin “imminently”, as some of the units within the towers were handed over earlier this year. The project was first announced in 2013.
Saudi Arabia’s tourism sector is forecast to grow as a result of the kingdom’s Vision 2030 economic diversification plans.
A paper on the kingdom’s hospitality market published earlier this month by Colliers for Arabian Travel Market predicted a 50 percent growth in domestic tourism over a five-year period, with the number of domestic tourism trips estimated to rise to 70.5 million per year by 2023, up from 47 million last year. Inbound tourism trips are predicted to grow to 23.3 million per year, up from 17.7 million over the same timeframe.
Guy Hutchinson, acting CEO of Abu Dhabi-headquartered Rotana, said in a press release that the agreement “confirms our commitment to achieving the goals of the National Transformation Program 2020, which entails the activation of the kingdom’s regional and global role as a commercial and economic centre, as well as a destination for tourists and investors alike”.
A presentation document accompanying Damac Properties’ 2018 financial results published last month stated that the developer has a total of 10,000 serviced apartments either already completed or under construction. The company delivered a total of 4,100 units last year, when it earned a net profit of 1.15 billion UAE dirhams – a 58 percent decline on the 2.76 billion dirham profit earned in 2017. Revenue stood at 6.13 billion dirhams, down 18 percent on 2017.
(Reporting by Michael Fahy; Editing by Anoop Menon)
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