Dubai’s Jumeirah Group, operators of the iconic Burj Al Arab, has severed its contract with Al Fattan Properties to manage a resort on the city’s Palm Jumeirah.
The state owned hotelier signed a deal with the Dubai developer to run the luxury Jumeirah Al Fattan Palm Resort three years ago but said Sunday the deal had been scrapped.
“Both parties have amicably agreed to terminate this management agreement with no obligations outstanding on either side,” the hotelier said in an emailed statement.
The property, which is currently under construction, will instead be managed by the Turkish operator Rixos Hotels. The hotel, which has been renamed Rixos Residences Palm Jumeirah, will be the company’s first hotel in the emirate.
The palm-shaped island has seen a string of delays to its planned hotel openings. Kempinski confirmed in March that it would mothball its 253-room property on the development, citing oversupply in the market. The Fairmont Palm Jumeirah Hotel, originally slated to open in 2010, is now eying a soft launch in July next year.
Of the larger hotels planned, only the Atlantis – which opened in 2008 – the One&Only Palm Jumeirah and the Jumeirah Zabeel Saray have so far opened.
Jumeirah said last week it would push ahead with its first property in protest-hit Syria and expects to have 60 hotels signed or under management by end –2012.
The state-owned hotelier will open about nine properties this year, including two in the Maldives and units in Abu Dhabi and Kuwait, but has suspended a planned property in Dubai’s Healthcare City following the emirate’s real estate crash.
Deloitte said in December that occupancy rates and room prices in Dubai would decline as 30,000 hotel rooms are added over the next five years.
Jumeirah Group reported that full-year profit for 2010 rose 58 percent on the year-earlier period.
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