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Sun 7 Nov 2010 06:07 PM

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JAL on track for hotel opening, despite stake sale

Tokyo based operator said Dubai hotel to open by Dec, hopes to bolster profit at existing UAE resort

JAL on track for hotel opening, despite stake sale
The Hotel JAL Tower Dubai is based on the Sheikh Zayed Road and is the chains second UAE facility

JAL Hotels, a former unit of debt-laden Japan Airlines, is on track to open its first Dubai hotel at the end of the month, despite a rocky year that saw it sell a majority stake to rival hotel chain Hotel Okura Co.

“We are finalising everything. Our target is to be ready hopefully by the end of the month,” said Laurent Rigaud, general manager, Hotel JAL Tower Dubai.

The 51-storey hotel is expected to be rated as a five-star facility and is currently being reviewed by Dubai authorities, he said.

The Tokyo-based operator said it hopes the 471-room Hotel JAL Tower Dubai, based on Sheikh Zayed Road, will bolster its existing Fujairah resort that has struggled to turn a profit.

 “On the revPAR it does very well but we are facing issues on making it, for the owner, more profitable. We have some cost issues we need to look at, energy costs are very high,” said Marcel van Aelst, president and CEO, JAL Hotels.

The company was established in 1970 as a subsidiary of Japan Airlines, which in January filed for bankruptcy with $26m of debt. A 79.6 percent stake in JAL Hotels was sold to Okura in September and JAL retains an 11.1 percent share – an arrangement that van Aelst hopes to capitalise on, through the carrier’s code-sharing agreement with Dubai’s Emirates Airline.

“It is in our interest that they keep this [stake],” he said. “It is in their interest to promote these hotels and, although Japan Airlines does not fly to Dubai it is an important market. We feel [the association] has a certain value.”

The luxury chain has no current plans to expand its Middle East operations, but would consider opportunities in Saudi, its CEO said.

 “Are we interested? Yes, definitely. Jeddah would be a very good market as there are several large Japanese companies over there,” he said.

JAL Hotels operates 57 hotels around the world with a total of 17,985 rooms.

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