Kuwait-based Action Group Holdings is spending US$15.7 million on a plot in Dubai Healthcare City to develop a budget hotel.
The company’s subsidiary, Action Hotels, will build and jointly own a 240-room, three-star Premier Inn hotel on the 26,312 square feet plot purchased from the Dubai government.
The company, which had previously planned to develop a hotel on a leasehold basis, said the land would be financed through a bank loan.
This will be Action Hotels’ first property in Dubai.
Construction is expected to start in the middle of next year with plans to open in 2016, according to Alain Debare, the chief executive of the London AIM-listed Action Hotels.
“It is important to have a balance between owned and leased properties [in the portfolio]. It’s a prime location surrounded by only five-star properties, and with good airport connectivity,” Mr Debare said.
He expects a shortage of three-star hotels will help the property to attract families and friends of medical patients, catering to the demand for affordable accommodation in the free zone.
Action Hotels has three other properties in the pipeline in the UAE, with one each in Sharjah, Abu Dhabi and Ras Al Khaimah under the Premier Inn, Staybridge Suites and Tulip Inn brands.
Dubai’s focus on medical tourism is attracting investment in hotels near the free zone, which caters to patients seeking cosmetic surgeries, such as nose correction or liposuction and wellness treatments. Among its 124 clinical facilities, it has eight for patients with special needs.
The free zone expects to receive 1.2 million patient visits this year, up from 1 million in 2013. About 15 per cent of the patients are medical tourists, according to DHCC.
The Dubai Health Authority has set a target of 170,000 medical tourists in 2016, up from 107,500 in 2012.
In September, the Dubai-based Time Hotels said it would open its first five-star property close to DHCC in 2016.
Located near Wafi Mall on Sheikh Rashid Road, the 277-room Time Royal Hotel will have two rooms on each floor accessible to the guests with disabilities, besides wheelchair-friendly access to public areas.
The Dubai-based Awtad Investment company is also spending Dh200m on a hotel.
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