Five-star hotel to be sold for homes

The five-star Angsana Dubai hotel on Sheikh Zayed Road is to be converted into homes, an apparent victim of the price war taking place in the city's hotel sector. The hotel's owner, Damas, is selling the property for residential use because of the "challenging economic environment brought on by the global economic recession", the Angsana's management company said on Wednesday.

Singapore's Banyan Tree Hotels, which has operated the hotel since it opened last year, said: "Damas Hotels and Banyan Tree Hotels and Resorts have agreed to amicably terminate the hotel management contract covering the Angsana Dubai with appropriate compensation." The hotel, situated near the Dubai International Financial Centre, which has 417 suites, will close next Thursday. An executive from Damas's property division was unavailable for comment. Damas is best known for its retail jewellery business.

The hotel was originally meant to consist of two towers. One tower, which contains hotel suites, opened last year. The other hotel tower, which would have had 364 rooms, was also due to open last year, but remains under construction. Bernold Schroeder, the senior vice president and managing director of hotel operations for Banyan Tree, said: "We wish [Damas] well in the very difficult property and hotel environment currently.

"Our immediate concern is to minimise any inconvenience to our guests; we have ceased reservations and confirmed bookings will be sensitively relocated. We are also seeing to the well-being of the hotel employees and ensuring they are fairly compensated. "We believe in the long term viability of Dubai as a key gateway city and will continue to explore options to re-establish ourselves there where opportunities avail themselves."

An Angsana sales representative said the hotel was fully booked until the end of the month. Hotels in Dubai have taken a severe knock from the global slowdown in travel and a wave of new hotel openings in the emirate, which has increased the competition to attract guests and forced hotels into a price war. As of the end of June, Dubai had 58,147 rooms, made up of 40,943 hotel rooms and 17,204 hotel apartment rooms, representing a 17 per cent rise compared with the same time last year, according to the Dubai Department of Tourism and Commerce Marketing. Thousands more hotel rooms are due to open over the next few months.