Le Meridien to go public

Le Meridien Mina Seyahi ... one of the three properties of the group in Dubai.

The newly-independent Le Meridien Hotel Group plans to go public within five years - latest in seven years.

The group's newly-appointed chief executive, Juergen Bartels, said the hotel's board of directors had adopted the resolution.

"The (owning) banks needed an exit. It has been decided and the board has adopted it (the resolution). We will be a public company in five years, and at the latest, in seven years," Bartels said during a visit to Dubai.

In July, Nomura International, along with others like Royal Bank of Scotland and Bartels, acquired Meridien Hotels from Compass Group plc in a $2.79 billion deal.

Bartels put up £10 million ($14.74 million), the report said.

There is a likelihood that Bartels may raise his equity stake from the present 2.5 per cent if the majority owners wished to divest part of their holdings earlier, the report said.

Meanwhile, Bartels also told UAE media that Dubai was on course to double its tourist arrivals over the next five years.

"People have questioned the wisdom of Dubai going in for 40 new hotels. I do not agree with it one bit," said Bartels.

"With its airport and airline, which are among the top three in the world, and its astonishing initiatives on infrastructure, entertainment facilities and sports events, Dubai has the needed lift to attain the targets."

Bartels said there had been limited impact on occupancy at the three Le Meridien hotels in Dubai following the September 11 terror attacks in the US.

Occupancy continued to average above 70 per cent at two of the properties, and had touched 98 per cent at the third since then, the report said.

However, he declined to comment on whether the Dubai properties have been hit by cancellations since September 11.

Le Meridien operates more than 20 properties in the Middle East, and 140-plus overall, the report said.

It is adding a resort in Fujairah next year, and there are more coming up in Saudi Arabia and Egypt.

The region is "one of the best performing groups in our portfolio. It is strong today and will remain so in the future, and complements our strengths in Europe", said Bartels.

The chain plans to add two new hotels every month for the next five years. Also, its rooms are being upgraded to reflect some of the highest standards in the lodging industry through the 'Art + Tech' programme. In five years, Bartels expects to have 20-25 per cent of rooms in his portfolio in line with 'Art + Tech' standards, which it is expected, will realise improved returns in profitability and occupancy.

The hotel chain has announced a global investment programme of Dh4.5 billion for the upgrades.

Of this, Dh1.8 billion will be met by Le Meridien for its own or leased properties, and the rest from the actual owners of the properties, the report said.