ABU Dhabi National Hotels (ADNH) is venturing into the development of mixed-use properties while retaining its focus on the hospitality sector as part of a new business expansion strategy.

The strategy is expected to give a further boost to the capital's tourism promotion drive.
The government-owned company expects to maintain double-digit growth this year although 2005 will see strong growth when the renovation of all hotels is completed, according to a tradearabia.com report. “In line with the development plans in Abu Dhabi, we are looking at mixed use developments that include leisure, retail, hotels and residences. There’s huge demand for mixed-used properties,” said Peter E Cardnell, director general of ADNH. “We have identified a couple of sites and will finalise plans within six to nine months. The investments will be large.”
ADNH, which is made up of Sunshine Tours, Al Ghazal Transport, catering business ADNH Compass, and the Al Diar group of hotels, posted a net profit of Dh126.25 million (approximately $34 million) for the first half of 2004, an increase of 26 per cent compared to the first half of 2003. “But the sector bounced back quicker than expected and we expect to close this year with double-digit growth as revenues are showing improvement due to increased occupancy levels.”
While the hotels account for 45 per cent of total revenues, the catering segment contributes another 45 per cent with the transportation division accounting for ten per cent. “Among our hotels, the eight mid-market Al Diar hotels are doing very well with occupancies averaging between 80 and 90 per cent as compared to the luxury hotels whose occupancies are lower due to ongoing renovations,” Cardnell said, according to the report. “However, 2005 will be a strong year of growth because all our renovations will have been completed.” With large-scale renovations underway, approximately 50 per cent of ADNH's luxury hotel rooms are out of commission.
The Hilton International in Abu Dhabi undergoing a multi-million renovation and is 60 per cent closed. Its completion is scheduled for the end of the year while the completion of Le Meridien's renovation is set for 2005. Cardnell said ADNH will continue to expand its portfolio of hotels within and outside Abu Dhabi.
ADNH is also planning to buy a 450-room property at Dubai’s Jumeriah Beach Residence Development, which is expected to come on stream in 2007. “Our Al Diar Hotels company is looking at two properties in Dubai and two new ones will be opening by the end of this year.”