Yotel hotel chain targets Abu Dhabi and Dubai

A Kuwaiti-owned company is planning to roll out a global expansion of the Yotel "pod" hotels over the next five years.

The announcement comes as the industry picks up worldwide and the company readies to open its US$300 million (Dh1.1 billion) Yotel property in New York's Times Square next year.

IFA Hotels and Resorts, which is the majority investor in Yotel, says the brand is looking at launching between about 30 and 40 of the hotels over the next five years.

Locations under consideration include Europe and the US, as well as Abu Dhabi and Dubai. The idea behind the design of the rooms is inspired by a combination of the Japanese "capsule" hotels and first-class airline cabins.

Simon Woodroffe, the founder of YO Sushi, the conveyor belt sushi bar chain, co-founded the Yotel brand.

"Our plans are global for Yotel, so we are currently in conversations on a number of further projects in Europe, both in airports and in city centre locations, and we are in early conversations with potential partners in the Americas," said Joe Sita, the president of IFA Hotel Investments.

"Further afield, we are very keen to move into China and into the rest of Asia." Yotel signed a memorandum of understanding with Abu Dhabi National Hotels in 2008 to develop two hotels in the capital. These plans have been delayed by the economic downturn, but Mr Sita said talks were continuing.

"The Middle East is certainly still an area of strong interest for us," Mr Sita said. "In Dubai we see a big market for it and we're just looking for the right site."

Qatar is another attractive option following its successful bid for the World Cup 2022, he said.

With 669 rooms, the hotel in New York, which is owned by IFA and is being developed by Related Companies, is being touted as the largest hotel that will open in the city next year. It is expected to be completed in the first quarter of next year, with its opening scheduled for the second quarter.

It is part of a wider project that includes a theatre designed by the renowned architect Frank Gehry. Yotel has hotels open in London's Heathrow, Gatwick and Amsterdam's Schiphol airports.

The New York hotel will be its first property not based at an airport and as a result it will offer slightly larger but still compact rooms.

"Our timing has been quite good here. There are not very many other hotels opening next year. We're hitting the market just as it's really on the upswing."

Yotel expects to charge between $200 a night and $250 in Times Square, significantly more than the rates at its airport properties, with the Heathrow Yotel typically charging between £40 (Dh231) and £50.

But Mr Sita said that was because the airport hotels were based on the model of a high turnover of guests, as passengers passing through the airport often book the rooms for just a few hours. "So at Heathrow for example we routinely run at 200 per cent occupancy." The tiny rooms have electric beds that can be adjusted to be used as a sofa to make efficient use of the limited space.

"We position the Yotel as affordable luxury," said Mr Sita. "We straddle the boutique hotel space, because we offer that level of finish, and the more budget brands."

He said Yotel was looking for development and investment partners for its projects outside Europe in particular. "We will look for partners to roll out multiple units in those territories. We always believed it was necessary to put our money where our mouth is and show how successful the brand can be by investing our own money.

"That's what we've done [in New York] and we're confident that will be the catalyst for bringing in investor partners to help grow it throughout the US."

rbundhun@thenational.ae

Correction: This article was altered on December 9, 2010 to reflect the fact that Joe Sita is the president of IFA Hotel Investments not president of IFA Hotels and Resorts as stated.