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A Consortium of 12 Regional Investors Will Finance the US $150 million
Development of 20 Express by Holiday Inn's Across
Five Countries in the GCC
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Dubai International Capital the anchor investor; Addax structures
‘ground-breaking’ deal; HMS named as operators
 
(October 2 2005, Dubai, UAE): A consortium of 12 regional investors will finance the US$150 launch and development of more than 20 Express by Holiday Inn hotels across five countries in the GCC.
 
The owning company for the hotels, Ishraq, will control the rights to the three-star brand – the first international brand of its kind to enter the Arabian Gulf countries on this scale – across the GCC, with the exception of Saudi Arabia. 
 
Dubai International Capital (DIC), the international investment arm of Dubai Holding, is Ishraq’s anchor investor and the key player in the deal, which was structured, arranged and placed by Addax Investment Bank, the Middle East investment bank based in Bahrain. 
 
The 20 properties will be operated on behalf of Ishraq by Hospitality Management Services Middle East Ltd (HMS), the master franchise developer and operator of Express by Holiday Inn in the Gulf states. The first property will be built at Knowledge Village, part of the Dubai Technology and Media Free Zone (TECOM).
 
For DIC, the international investment arm of Dubai Holding, this is the fourth major strategic investment outside Dubai in recent months. 
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Pictured from the left are: Sameer Al Ansari, CEO of Dubai International Capital;
Yousef Al-Essa, general manager of Addax; Thierry Louè, managing director
of HMS and Denis Johnson, Vice President, Sales and Marketing,
InterContinental Hotels Group, Middle East and Africa.
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The company invested $1 billion in DaimlerChrysler, making it the company's third largest shareholder, followed by the $1.5 billion acquisition of The Tussauds Group in the UK – the largest operator of visitor attractions in Europe. DIC has also launched Jordan Dubai Capital, a $280 million investment company targeting opportunities in the Jordanian economy.
 
Sameer Al Ansari, CEO of DIC, said: “There is a huge gap in the market for branded budget hotels, which we believe are essential to maintain the target visitor figures for the next 10 years in the Gulf. 
 
“Express by Holiday Inn is the largest budget hotel brand in the world, with proven results, and the launch in the Middle East will help fill the gap for affordable accommodation at guaranteed quality.
 
“This move really reflects the development of tourism in the Gulf which, to date, has concentrated on iconic world-class projects. We have traced the rise and profile of inbound tourists and have identified that the time is right to tap into the three-star market which is flourishing around the world.
 
“Further to this, this is an example of DIC widening its foreign portfolio while investing in long-term projects that will benefit both the UAE and the Gulf.”
 
Yousef Al-Essa, general manager of Addax Investment Bank, said: “This is the first deal of its kind, in terms of profile, regional spread and investors, encompassing the premier institutional and high-net worth investors from each of the five countries included in the deal. 
 
“In fact, the transaction met well with potential investors and was heavily over subscribed.
 
“What makes the deal stand out is that this is the first time that investors throughout the Arabian Gulf countries have come together to develop a hotel fund in the Middle East with the objective of creating a chain of hotels under the same brand name across multiple countries.
 
“In addition, the pace of the project is remarkable: the development of 20 hotels - from land negotiations through to completion – is across five countries simultaneously, and during a period of only five to seven years.”
 
According to WTO figures, the Middle East will be the fastest-growing region by 2020, with estimated growth of 7.1 per cent per annum, and 69 million tourists. 37 per cent of these tourists are tipped to be intra-regional travellers, with 32 per cent coming from Europe.
 
Thierry Loué, managing director of the operator HMS, said: “Express by Holiday Inn is the world’s most successful and profitable budget hotel brand with more than 1,500 hotels worldwide, and a new Express hotel opening every four days.
 
“The move to market will be fast with the first hotels opening in Dubai at the end of 2006 and the rest of the hotels open by 2010. 
 
“In addition, from an operating point of view, this sector offers higher returns on investment than luxury properties, as a consequence of reduced investment and operating costs.”
 
To address the identified regional market need for value hotel accommodation, particularly for business travel, the development of the Express by Holiday Inn brand will see properties located within commercial centres, along major road arteries and in around business and industrial parks.
 
Chris Moloney, Chief Operating Officer, InterContinental Hotels Group, Middle East and Africa, explained: “There is a need for this type of internationally branded three star hotels that provide quality service at value for money. 
 
“We have made a commitment to the GCC market and have the ability to respond to either owner’s or customer’s demands. This is why we looked for partners that really understood what the brand is about.” 
 
About Addax Investment Bank
Addax, a Middle East bank headquartered in Bahrain, was founded in 2003 and has already built up a portfolio of innovative investments in the region, including a 49 per cent stake in Al Zajil Express Mail and Freight, an Iraqi company with exclusive rights to TNT, one of the world's leading international courier service companies.
 
About Dubai International Capital
Dubai International Capital ('DICapital') is the international investment arm of Dubai Holding, which owns and manages a diversified portfolio of companies operating in the fields of leisure, healthcare, technology, finance, real estate, research, education, tourism, energy and communications. Established in October 2004, DICapital is building an international portfolio of diverse business assets in North America, Europe, Asia-Pacific and the Middle East/North Africa to create and maximise long-term shareholder value as an active investor in different asset classes. 
 
About Dubai Holding
Dubai Holding was launched in October 2004 to consolidate the various large scale infrastructure and investment projects in Dubai that were created over the past five years as well as research, identify and execute future major projects that will benefit the emirate and the region. Dubai Holding currently has more than 20 companies operating in a variety of sectors ranging from health, technology, finance, real estate, research, education, humanitarianism, tourism, energy, communication, industry, biotechnology and hospitality. 
 
About HMS
Hospitality Management Services Middle East Ltd. – HMS – is an integrated regionally based organisation established for the purpose of sourcing, launching, developing and operating leading global hospitality and real estate brands throughout the Middle East.
 
About InterContinental Hotels Group
InterContinental Hotels Group PLC of the United Kingdom [LON:IHG, NYSE:IHG (ADRs)] is the world's largest hotel group by number of rooms.  InterContinental Hotels Group owns, manages, leases or franchises, through various subsidiaries, more than 3,500 hotels and 535,000 guest rooms in nearly 100 countries and territories around the world. The Group owns a portfolio of well recognised and respected hotel brands including InterContinental® Hotels & Resorts, Crowne Plaza® Hotels & Resorts, Holiday Inn® Hotels and Resorts, Holiday Inn Express®, Staybridge Suites®, Candlewood Suites® and Hotel IndigoTM, and also manages the world's largest hotel loyalty programme, Priority Club® Rewards, with over 25 million members worldwide. In addition to this, InterContinental Hotels Group has a 47.5% interest in Britvic, one of the two leading manufacturers of soft drinks, by value and volume, in Great Britain. InterContinental Hotels Group offers information and online reservations for all its hotel brands at www.ichotelsgroup.com and information for the Priority Club Rewards programme at www.priorityclub.com. 
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Contact:

Addax: 
Kirstie Hepburn, Strategic Solutions, tel +971 4 3903030
media@strategicsolutionsonline.com
 
Dubai International Capital: 
Mashael Al Naimi, tel +971 4 3621886, 
MN@dubaiic.com 
 
HMS
Bani Haddad, tel +971 4 3324778; 
bani.haddad@hms-me.com
 
InterContinental Hotels Group:
Sarah Plummer, Impact Porter Novelli, tel +971 4 3304030;
s.plummer@ipn.ae

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Also See: Middle East Travel & Tourism Poised for Robust Growth in 2005; Dubai, Abu Dhabi and Beirut are Examples of Government Leaders Recognizing the Enormous Impact of Travel and Tourism / May 2005
Giant Leap In Dubai, 31 Hotels Being Built or Confirmed for Future Construction/ May 2004

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