Two five-star hotels at Festival City shelved

Two five-star hotel projects which were to be built at Dubai Festival City have been cancelled, succumbing to the global economic crisis, according to an industry source. "The W Dubai Festival City, which was scheduled to be ready by 2013, has been scrapped. And the Four Seasons Hotel, which was scheduled to come up by 2011-end, next to the Al Badia Golf Club at Festival City, has been called off, too," a source close to the project, told Emirates Business. The two hotels were to form part of the Al Futtaim Group Real Estate's hospitality portfolio at the Festival City. Asked if the two hotel projects have been called off for good or are scheduled to open at a later stage in the future, a company spokesperson refused to comment. A company spokesperson for the Starwood Hotels' boutique hotel brand, W Hotels, too, declined to comment and queries to Four Seasons Hotels went unanswered. But Al Futtaim's appointment last week of InterContinental Hotels Group (IHG) to manage Al Badia Golf Club, affirmed the belief that Four Seasons Dubai Festival City is no longer moving forward. Al Futtaim Group Real Estate had passed on the management of the golf club to the Four Seasons Hotel in 2007. The Intercontinental Group will be assuming the management of Al Badia Golf Club from July 1, Al Futtaim said recently. The economic slowdown has resulted in the cancellation of about 6,500 rooms in the UAE alone this year. And about five per cent of the 893 planned hotel projects in the GCC have been cancelled, Dubai-based market research firm Proleads had revealed in May this year. It said while 14 per cent hotel projects in the UAE are on hold, 15 per cent are in design stages, eight per cent have been planned and nine per cent completed. The UAE, meanwhile, according to Proleads, accounts for a majority – 62 per cent – of the planned 893 projects in the GCC, followed by Saudi Arabia at 17 per cent. The Four Seasons Dubai Festival City, originally scheduled to open in the second quarter of 2009 (as stated on the Dubai Festival City website), was meant to be a waterside hotel in the Festival City, housing 400 rooms, including ultra-exclusive residential apartments besides a splendid range of luxurious amenities and services. The W Hotel Dubai Festival City, meanwhile, was to be the brand's first hotel in the Middle East, including luxury loft suites and a dedicated marina. Originally slated to open its doors in 2008 offering 350 rooms and suites besides several restaurants and spa, the launch of W Hotel in Festival City was pushed twice later on – first to June 1, 2010, and then further delayed until 2013. On the other hand, W Hotels opened its first Middle East property in Doha in March this year, with the opening of W Doha Hotel and Residences. In the wake of the slowdown in the global travel industry, Dubai hotel revenues declined by more than 40 per cent in May this year from a year ago, with hotel occupancies in Dubai falling 14.5 per cent in the same period to 66.5 per cent, according to the hospitality research company STR Global. Gulf countries, meanwhile, are constructing 306 new hotels, with 108,600 rooms budgeted at $140 billion (Dh514bn), as per the Proleads data. Do you think other projects that have been affected by the downturn should follow suit? Have your say by posting a comment below, or emailing us at online@business24-7.ae . Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .