Almulla to invest $2bn in Islamic hotels
By Staff Writer on Tuesday, March 4 , 2008
A $2 billion (Dh7.34bn) plan to develop a Shariah-compliant hotel brand portfolio appealing to lifestyle travellers – both Muslim and non-Muslim – is to be outlined to potential investors.
Abdulla Mohamed Almulla, Chairman of Dubai-based Almulla Hospitality, said: “In less than a decade, Middle East leaders have transformed the landscape and created one of the world’s fastest growing regions, with hospitality investment at its core. The Islamic hotel chain is the new wave coming through,” he said.
“The market for Islamic hotels is currently fragmented due to lack of professional management and we recognise the growing need for a professionally-operated international hotel chain, which operates on Islamic principles.”
Recent surveys have revealed plans for around $3trn worth of tourist developments in the Middle East between now and 2020. Of this $1trn is earmarked for around 900 hotels.
“We are aiming to capture between five and 10 per cent of that growth – between 45 and 90 hotels,” Almulla said.
The company plans to grow its portfolio through management contracts, joint venture investments and selective acquisitions across the world using a variety of investment structures, including equity funds. All financial structures will conform to the Islamic ban on interest with returns derived from physical assets.
The initial destinations targeted by Almulla Hospitality are Saudi Arabia, the UAE, Jordan, Egypt, Malaysia and Thailand.
The company is also looking at setting up operations
Almulla believes there is huge untapped potential for uniquely Islamic hotels as more and more Muslims travel not only for religious reasons, but also for business and leisure.
“The Muslim traveller market is growing around the world due to increasing wealth combined with conscious lifestyle living and represents 10 per cent of the world tourism market – one of the fastest growing segments,” he said.
There are many individual Shariah-compliant hotels throughout the world. “But our brand proposition is international – whether the country is Muslim or not – so guests will be confident of our universal consistency,” Almulla said.
“In addition, our hotels will appeal to non-Muslims as well because of their socially responsible culture. Hospitality is an integral part of Islamic culture and our hotels will provide a unique service not only for the Muslim community, but also for those of other religions and cultural backgrounds.
“Around $3trn is forecast to be invested in the region’s tourism and supporting hospitality infrastructure. By 2010 outbound tourism trips from the Middle East are expected to increase to $44.8bn, an annual growth rate of 5.5 per cent ,” Almulla added.
Saudi Arabia is one of the biggest outbound travel markets in terms of average spend with tourists from the kingdom spending $6.7bn annually on overseas travel.
Travellers from the UAE are close behind at more than $4.9bn, an average of $1,700 per trip, which is $500 higher than the European average.