Plans to build a luxury Viceroy hotel in Abu Dhabi have been put on hold until property sales pick up, says an executive from the company.
The project, planned for Sowwah Island, Abu Dhabi's new central business district, was announced two years ago and was being undertaken by Mubadala Development, a strategic investment company owned by the Abu Dhabi Government. Mubadala also owns a 50 per cent stake in Viceroy Hotel Group.
"There was an announcement, but it was pending real estate sales," said Michael Lorenz, the vice president of sales and market strategy for Viceroy Hotel Group. "Until the sales escalate, the project's … on hold. That's on the back burner right now."
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Four Seasons and Rosewood hotels have also been announced for Sowwah Island. "There's three hotels in there," Mr Lorenz said. "The other two hotels have been approved.
"The third hotel, which is us, has not been approved yet … The project is going to be built in phases and all the phases haven't been approved yet. We're part of one of the latter phases. So if the economy gets better … then most likely it will happen at some point."
A Viceroy resort that Mubadala is jointly developing in the Maldives is slated to open in September.That project on the island of Vagaru has 61 villas on a 17-acre crescent surrounded by coral reefs. The Maldives development is an important part of the hotel company's plans to expand outside of the Americas. Viceroy Hotels Group has 14 properties in the US, the Caribbean and Latin America.
Hotel performance is improving in the Maldives says Uday Rao, the general manager of the Viceroy Maldives.
"The demand is coming back," Mr Rao said. "It's the right time."
Prices at the property will be between US$1,500 (Dh5,509.43) and $15,000 a night.
Viceroy was weighing expansion into "gateway cities" and studying opportunities to open hotels in Europe, New York and Turkey, Mr Lorenz said. The company was likely to have as many as 25 hotels by 2015, he said.
"The business is picking up," he said. "Most of our hotels have achieved double-digit revpar [revenue per available room] growth year-over-year this year, but it's still down [compared] to 2007."
rbundhun@thenational.ae
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The biog
Age: 23
Occupation: Founder of the Studio, formerly an analyst at Cleveland Clinic Abu Dhabi
Education: Bachelor of science in industrial engineering
Favourite hobby: playing the piano
Favourite quote: "There is a key to every door and a dawn to every dark night"
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Low turnout
Two months before the first round on April 10, the appetite of voters for the election is low.
Mathieu Gallard, account manager with Ipsos, which conducted the most recent poll, said current forecasts suggested only two-thirds were "very likely" to vote in the first round, compared with a 78 per cent turnout in the 2017 presidential elections.
"It depends on how interesting the campaign is on their main concerns," he told The National. "Just now, it's hard to say who, between Macron and the candidates of the right, would be most affected by a low turnout."
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Four reasons global stock markets are falling right now
There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:
1. Rising US interest rates
The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.
Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”
At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.
2. Stronger dollar
High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”
3. Global trade war
Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”
4. Eurozone uncertainty
Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.
Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”
The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”
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