n a press release Tuesday, Pearl Dubai FZ said it will own and finance a 250-room Bellagio hotel, 350-room MGM Grand hotel and a 30-suite Skylofts hotel. MGM Mirage would run the hotels.
Hospitality, a division launched in 2007 to export the company's luxury brands through hotel management deals worldwide, would run the hotels. The properties would become part of the Dubai Pearl, billed as an "integrated city" with 5-star hotels, apartments, condominiums, retail and convention space.
No timetable was given for the hotels or Dubai Pearl, which would be located along the Persian Gulf coast and would tower over Palm Jumeirah Island, a Palm-shaped resort development built on reclaimed land in the Gulf.
The plans come at a challenging time for MGM Mirage and Dubai, part of the United Arab Emirates. Las Vegas and Dubai grew on cheap credit and are now reeling from a global economic slump that has depressed real estate values and forced some developers to scuttle their projects.
MGM Mirage and business partner Dubai World last month negotiated a last-minute plan with banks to guarantee funding for CityCenter, the us$ 8.5 billion Strip development that opens this year. MGM Mirage has raised us$ 2.5 billion to pay down debt in an attempt to stay out of bankruptcy. The company still needs to refinance billions of dollars in debt accumulated before the recession as it struggles to boost earnings that have plummeted by more than a third.
After forming a partnership with Dubai World in 2007 to fund CityCenter, MGM Mirage had discussed long-range plans to build MGM Mirage-branded resorts in Dubai, potentially with Dubai World.
The Dubai hotels would be managed by MGM Mirage Hospitality, a division launched in 2007 to export the company's brands worldwide through management agreements. The division has signed deals to manage hotels in Abu Dhabi and mainland China. Hotel management, which is less risky than building and financing hotels, is expected to become a bigger source of MGM Mirage revenue in future years, analysts say.
Pearl Dubai, Dubai Pearl's developer, is a separate company from Dubai World, a conglomerate controlled by the Dubai government. Dubai Pearl's Web site says the project is foreign-owned. "Our alliance with MGM Mirage reflects our commitment to forging world-class partnerships with premium brands that are renowned for their operational excellence," Pearl Dubai Chairman Abdul Majeed Ismail Al Fahim said in a statement.