Legal battle hangs over hotel chain in Dubai

The six hotels in the UAE that were under Layia Hospitality's management have been taken over by a newly formed Dubai company called Time Hotels.

Workers are stripping down signage from a large hotel in the Barsha area of Dubai, a part of the city that has become a hub for fledgling hotel chains and budget properties.

The property had been branded the Layia Oak Hotel and Suites since its opening in November 2008 as the first lodging under the Layia Hospitality hotel chain, based in the emirate.

But last week, the six hotels in the UAE that were under Layia's management were taken over by a newly formed Dubai company called Time Hotels, as the partners in the hotel chain have become locked in a legal battle, says the chief executive of Layia Hospitality.

"Unfortunately things went sour and at the moment [I] have a court case against GGICO [Gulf General Investment Company]," said Daniel Hajjar, who also had 39 per cent ownership of Layia Hospitality. GGICO, a Dubai conglomerate listed on the Dubai Financial Market, founded Layia Hospitality alongside Mr Hajjar as the majority shareholder in the venture.

The details of the case cannot be revealed, with an outcome not expected until later this month, Mr Hajjar said.

"I cannot say more at the moment because the court case is not over yet," he said.

And he is unsure as to what the fate of the hotel chain will ultimately be.

"The company still exists, but it's on the backburner at the moment pending the court case, to see what's going to happen. There are major differences between the partners."

GGICO did not respond to requests for comment on the court case.

The company, which has inerests across a variety of industriesincluding retail and manufacturing, on Wednesday issued an announcement on the launch of Time Hotels. The new company also owns the six properties it has taken over management of, it said.

"Time Hotels Management are owned by the public shareholding company Gulf General Investment Company (GGICO) and Investment Group Private Ltd, and estimate a turnover of approximately US$27 million [Dh99.1m] during the current financial year," the statement said.

Layia's website is now automatically diverting visitors to Time's new website.

The properties across Dubai and Sharjah have a total of 745 rooms. Staff from Layia have been retained at the hotels.

"This seamless transition in management is an important chapter in our long-term business strategy, and one which means we can now look towards our future with a new impetus," said Mohamed Al Mazroei, the assistant managing director of GGICO.

Meanwhile, the newly formed company has "plans to expand and strengthen our brand identity by using these six properties as a platform for further growth in the region to target business and leisure travellers, particularly those from neighbouring GCC states", said Mohamed Awadalla, the area vice president of Time.

Two years ago, CAPM Investment, an investment company based in Abu Dhabi, announced that it had formed a joint venture with Layia Hospitality to launch a budget hotel in the capital called Day and Night Hotels.

CAPM Investment said following the announcement, the venture never materialised.

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