Hotel group behind Abu Dhabi's Yas Viceroy plans GCC expansion

The California-based Viceroy Hotel Group is hoping to expand across the GCC with a hotel in Dubai and a total of five across the region over the next five years.

The Yas Viceroy’s occupancy ranges from 60 per cent in low season to full for Formula One. Lee Hoagland / The National

The California-based Viceroy Hotel Group is hoping to expand in the GCC with a hotel in Dubai and a total of five across the region over the next five years.

Viceroy - which is half-owned by Mubadala, a strategic investment company owned by the Abu Dhabi Government - operates the curvaceous 500-bedroom Yas Viceroy hotel on the Formula One racetrack in Abu Dhabi, hopes to announce a deal to open in Dubai over the coming year, and is in discussions to set up shop in Riyadh.

In an interview in Dubai, the Viceroy chief executive Bill Walshe said that globally, the hotel operator is expecting to double the size of its portfolio of 15 hotels over the next five years, with a focus on the GCC nations and Europe.

"We have a couple of opportunities that we're looking at and I believe there may be that alignment heading our way soon. I would love to be able during 2013 to announce a Viceroy Dubai," Mr Walshe said.

He said that despite the increasing numbers of new hotels opening in the capital, which has been driving down occupancy rates and room rates, occupancy at Yas Viceroy increased by more than 10 per cent over the past year and room rates by "only slightly less than 10 per cent", driven by the opening of new attractions on Yas Island such as Yas Waterworld and the new beach.

As a private company, Viceroy declines to publish statistics on its occupancy levels. However, Mr Walshe said that occupancy rates at the Yas Viceroy can vary from 60 or 65 per cent during low season to about 100 per cent during events such as the Formula One.

"I think most of the Abu Dhabi market this year is looking to be flat or with single-digit growth. We're looking at very healthy double-digit growth year on year," he added. "But what I do see [at Yas Viceroy] is that the frequency of the peaks to the troughs is improving. We are getting more periods of strong compression."

Mr Walshe said that plans to open a second Viceroy hotel in Abu Dhabi, on Al Maryah Island, were "not on Viceroy's target list."

Back in 2009, Viceroy announced plans to open a luxury hotel on Mubadala's Sowwah Square scheme on the island. But two years later the proposals were put on hold because of the property downturn.

"Right now we do not have any pending announcements for Abu Dhabi. We've got no development plans right now. Yas Viceroy is a big business in an emerging destination and all of our focus is on the continual improvement of that hotel and the focus on that hotel is our absolute focus on Abu Dhabi," Mr Walshe said.

He said that the rising number of new hotels in Abu Dhabi was likely to lead to falling rates and occupancy levels across the capital. However, he said that in the long term existing hotels would benefit from the additional marketing created by new hotels entering the market.

"When new hotels enter the market it's only going to be problematic if we're at each other's throats and everybody's dumping rate to try to compete against each other. But when we have one voice that has pride in the destination [it's a different story] and that's something I've seen emerge quite recently - that's new but it's hugely positive," he said.