Skift Take
Josh Corder
One of the Gulf region’s most prominent property developers is partnering with the Indonesian government to boost the country’s tourism sector.
Eagle Hills, whose chairman is United Arab Emirates billionaire Mohamed Alabbar, has signed a $3 billion deal with Indonesia to build a new airport, hotels and wider tourism infrastructure.
According to Indonesian state news, Indonesia’s Ministry of State-Owned Enterprises and Eagle Hills plan to jointly build a $3 billion “cooperation.” It is unclear how much money each side will put into the venture.
The current agreement is provisional and valid for only one year, with no specific timeline for construction or how the funds will be used, but it “may be extended by mutual agreement.”
The deal is also expected to see the renovation of Soekarno-Hatta International Airport and various state-run hotels in the country to bring them up to “international standards”.
“This partnership is perfectly aligned with the national strategy of diversifying the economy and establishing Indonesia as a leading global tourism destination,” Indonesia’s Minister of State-Owned Enterprises, Erick Thohir, said.
More Eagle Hills Deals
It is the latest in a series of multi-billion-dollar deals for Alabbar, best known for building Dubai’s Emaar, the developer of the world’s tallest building, the world’s largest shopping mall and a string of luxury hotels across Dubai, including the Armani Hotel.
Abu Dhabi-based Eagle Hills is effectively his international development venture.
Eagle Hills last year signed deals to build a $1.5 billion golf resort in Baghdad, a $4 billion real estate project in Bahrain, a $3 billion waterfront development in Riga that will include more than 1,000 hotel rooms and a $5.5 billion development in Budapest. The company also has operations in Albania, Egypt, Serbia, Morocco, Oman, Jordan and Ethiopia.
Much of the Eagle Hills development formed part of larger agreements between the UAE government and other countries.
Speaking at Skift Global Forum East 2023, Tim Kelly, former president of Atlantis Resorts, said if UAE operators like Atlantis want to expand overseas they must first work directly with the government because the costs of producing that kind of product are so great.
Kelly said: [Atlantis] You go to a destination, you visit the community, you visit the government, and you say you want to build Atlantis there. It’s not like an investor says they want to build Atlantis. It doesn’t work that way.”
“You need to collaborate at the government level, then you look for investors. It’s not the same if you go for money first. You build a connection with the government, make sure your values are aligned, then look for funding.”
In 2023, the number of international tourists visiting Dubai is expected to reach 17.15 million, with Dubai International Airport’s passenger numbers expected to exceed 80 million.
Indonesia is expected to welcome 11.68 million tourists in 2023, up 98% from 2022 but down from the 16 million expected before COVID-19.
Arabbar has several of his own hotel brands to roll out in Indonesia, including the Armani brand, Address, Palace Hotel, as well as more affordable options such as Robe and Vida Hotel.
