New hotel to be capital's biggest

A five-star property in the centre of the capital is set to take the title of Abu Dhabi's largest hotel this summer. The five-star Grand Millennium Al Wahda, next to Al Wahda Mall, is to add 582 rooms and 262 serviced apartments to the market when it opens in August.

Currently, the largest in the city is the Yas Hotel, which has 499 rooms. "Obviously, we are a big player in town and there will be a shift in market share of the hotels," said Abel Damergi, the general manager of the Grand Millennium Al Wahda. "There is demand. With all the hotels that there are here, somebody came and asked me for 300 rooms for the Formula One. The more events that are created in Abu Dhabi, the more demand that there will be for hotel rooms."

But Mr Damergi said the hotel was likely to have an impact on occupancy levels in the emirate as it would increase competition for guests in a market that has already seen double-digit percentage falls in occupancy and room rates. The Abu Dhabi Tourism Authority has said its strategy is to have high-quality hotels as it strives to attract 2.3 million guests a year by 2012. "We will not open all the rooms altogether," said Mr Damergi. "We don't need that and there is no demand for 850 rooms during summer. Obviously, we'll be busy with Formula One in Abu Dhabi and we'll be ready for that."

He said between 60 per cent and 70 per cent of the rooms would open initially. Abu Dhabi has 14,712 rooms in its hotel pipeline and 8,460 rooms in the "in construction" phase, according to data from STR Global released yesterday. Other hotels being built in the city include the Venetian-themed Grand Canal hotel, the Rocco Forte property and the Hyatt at Capital Centre hotel. Mr Damergi said he anticipated particularly strong demand for the Grand Millennium's hotel apartments.

"We're expecting some of those professionals who will use the apartments while they're looking for a permanent residence," he said. "Also, there are some people who just want to have that service and will want to stay much longer." Mr Damergi added that the hotel's location next to the shopping mall in the centre of the city gave it a strong competitive advantage. "There is a life around the hotel rather than the hotel standing by itself," he said.

The room rates would be designed not to drag the city's rates lower but there would be a promotional price for the opening, Mr Damergi said. "One thing for sure is we will not drop our rates to the point where we will hurt the market." Noel Massoud, the chief executive of International Hotel Consultants, based in Abu Dhabi, said there was demand for hotel apartments across the city. "Abu Dhabi does not have that many branded hotel apartments," Mr Massoud said. "It has become a trend that people are looking for hotel apartments because it gives the same service and the facilities of a hotel but it's more homely and spacious."

He said they were typically cheaper than staying in hotels long term. "I believe there is a demand for hotel apartments in Abu Dhabi, especially during this time of economic growth and business travel is a key component of this," said Fady Sawaya, the general manager of the Staybridge Suites in Abu Dhabi, which opened last October. "Our suites are popular with professionals such as project workers who have been temporarily assigned to Abu Dhabi as well as families from the GCC leisure market."

Mr Sawaya said project workers would typically plan to stay between a month and a year. rbundhun@thenational.ae