Tourism

Palazzo Versace hotel sale aims to ride Dubai tourism wave

May 17, 2024, 11:30 AM

One of the four restaurants in the Palazzo Versace Dubai hotel, which is listed on the Emirates Auction website

Luxury hotel ‘readvertised’ for sale
Nine-floor building offered for $380m
Dubai occupancy among world’s highest

Owners of Dubai’s ultra-luxurious Palazzo Versace hotel are looking to capitalise on the emirate’s tourism boom before it peaks, offering it for sale at nearly AED1.4 billion ($380 million).

A source familiar with the asset told AGBI the hotel is being “readvertised” as it has not found a buyer willing to meet its price tag since 2018.

“It’s a good time to sell,” the source said.

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“The hotel is performing better than ever, with high occupancy and strong financial results.”

The 215-room building, designed and tailor-made by the Italian fashion brand Versace, has attracted interest from several potential investors, including Dubai’s Jumeirah Group and a Chinese investment company, the source said.

Jumeirah did not respond to a request for comment.

The nine-floor hotel, which includes four restaurants and two swimming pools, and its land plot, is listed on the Emirates Auction website.

The furniture is not included in the sale. Bidding concludes on May 22 at 5pm.

Dubai welcomed more tourists than ever before in 2023, attracting over 17 million international overnight visitors. That represents almost 20 percent year-on-year growth from the previous year, according to figures published by Dubai Department of Economy and Tourism (DET).

Average occupancy for the hotel sector in 2023 stood at about 77 percent, among the world’s highest.

Philip Barnes, CEO of UAE homegrown hotel brand Rotana, said last month that some of its hotels in the city run at 90 percent occupancy.

“Demand has been very strong and very consistent,” he said.

“Dubai has a global reputation that didn’t exist 20 years ago.

“The infrastructure investments in both Dubai and Abu Dhabi have made them very appealing destinations that continue to bring traffic throughout [the year].

“The growing demand has largely offset cost increases. Our margins are very solid.”

According to DET figures, the number of visitors to the emirate also surged 11 percent to 5.2 million in the first 3 months of 2024. At the same time, the number of hotel rooms increased by 2 percent to 152,162 and the number of hotels rose by the same percentage to 832.

From January to March Dubai’s hotels maintained an average room occupancy rate of 83 percent.