Today, July 2, 2012 QE2’s owner Ishtishmar World, DP World and the QE2 management today (July 2) announced that the QE2 will become a luxury hotel to be permantently berthed in Port Rashid, Dubai.
From reactions throughout the liner community, this is obviously long awaited news that is met with great excitement. It’s good to hear that original plans have been scrapped for more sensible restoration work and hopefully the ship will be accessible to visitors soon. I share the view of friend though: I believe it when I can book my first night!
DUBAI—Dubai said Monday it has decided the fate of the Queen Elizabeth 2, the 45-year-old ocean liner it bought at the height of the economic boom five years ago and which has been lying idle in the emirate’s Port Rashid ever since.
The ship’s owner Istithmar World, which reportedly considered selling the QE2 on several occasions to raise money during the financial crisis, announced plans to renovate and convert the ship into a 300-room hotel. The state-owned company said work will take 18 months, after which the QE2 floating hotel will be permanently docked in Dubai.
“The ship is in immaculate condition,” Istithmar World chairman Sultan bin Sulayem said at a news conference to announce the plans for the ship. “It’s going to enhance the tourism sector in Dubai.”
Istithmar refused to comment on how the project will be financed or how much it will cost. Mr. bin Sulayem would only say that funds “will be there” to pay for the conversion and for a broader redevelopment of Port Rashid, which is the destination for cruise ships docking in Dubai.
The plan follows years of speculation about the future of the QE2, which Istithmar bought in 2007 for $100 million from Cunard, a subsidiary of cruise giant Carnival Corp. CCL +0.38% Istithmar originally intended to make it into a floating hotel stationed at a berth on the trunk of the Palm Jumeirah, one of Dubai’s palm-shaped artificial islands.
The financial crisis intervened, however, and Istithmar was reported numerous times to be considering a sale to raise cash. One reported plan that failed to materialize was moving it to South Africa to serve as a floating hotel for the 2010 World Cup. Last year, Istithmar was said to be considering a plan to make the QE2 into temporary housing for Japanese tsunami victims and then send it to Macau for conversion into a floating casino.
On Monday, Mr. bin Sulayem denied that the QE2 was ever offered for sale, although he said Istithmar had been approached with several proposals.
“We never offered it for sale,” he said. “There were people coming to us with numbers, [saying] let’s sell it, let’s do that.”
Istithmar is a subsidiary of Dubai World, the government-owned company which completed a $25 billion debt restructuring last year that included provisions for asset sales to pay off debt. The new plans for the QE2 “will not affect financial commitments to the banks,” Mr. bin Sulayem said.
Despite the scant details about the financing of the new hotel project, Mr. bin Sulayem expressed confidence that the QE2 hotel would be successful.
“It costs money for Istithmar to keep it sitting, so what we’re doing is reducing the cost for Istithmar and eventually Istithmar will make money out of it,” he said.
The ship’s historic character is to be preserved as it undergoes the conversion, Mr. bin Sulayem said. The 300 rooms are to be spruced up but not significantly changed; the renovation work principally involves fixing corroded and leaking pipes and connecting the boat to land-based water and electricity supplies.
“There were many grand ideas of renovating it in such a way that it was totally different from what it used to be, but we realized that a lot of people liked the ship as it was,” he said.
Mr. bin Sulayem dismissed suggestions that the corrosion, or the presence of asbestos in parts of the ship, would affect the hotel project. Consultants have been hired to certify the boat’s safety and ensure that any remaining asbestos is harmless, he said.
The initiative comes as Dubai enjoys a rebound in trade and tourism. Room occupancy rates at Dubai hotels averaged 74.4% last year, according to Dubai Statistics Center data, up from 70% in 2010.
The QE2 has been docked at Port Rashid since it arrived in Dubai. The 70,000-ton behemoth first floated in 1967 and was a cruise ship and ocean liner operated by former owner Cunard until its sale to Istithmar in 2007.