Hotel analysts in the UAE say the closing of the 87-room Baynunah, which has mainly operated as a business hotel since it opened in January 1995, has not come as a surprise.
Chiheb Ben Mahmoud, the executive vice president and head of hotel advisory, Middle East and Africa at Jones Lang LaSalle, said the recent spate of new hotels in Abu Dhabi made it difficult for older establishments to stay afloat.
"Sometimes these hotels can be cash cows but there is no way for the cash flow to be sustained with the changes happening now," he said.
Mr Mahmoud added that branded hotels generally had a longer life cycle but that "solutions need to be drastic" when there were changes in a competing environment.
According to Matthew Dadd, the associate director at real estate consultancy firm Knight Frank, age was not necessarily a factor.
However, he said the Baynunah was "not comparable" to the Hilton on the Corniche.
"Because it's a business hotel, they have longer stays and are not an F&B [food and beverage] outlet like some other hotels," he said. "And it doesn't have a beach to offer."
Mr Dadd said the emirate's "rapidly changing market", with its expanding number of hotels, was "good for Abu Dhabi tourism".
"The diverse offering here is far superior than it was a few years ago, so there is pressure on all hoteliers to provide the best service to the market," he said.
