Saudi's Red Sea developer signs contracts with 9 hotel brands

By Yousef Saba

RIYADH, Oct 27 (Reuters) - St Regis and Fairmont are among nine international hotel brands that will manage hotels in Saudi Arabia's Red Sea area, The Red Sea Development Co said on Wednesday.

Management contracts were signed with Marriott International (MAR) , Accor, Hyatt Hotels (H), IHG Hotels & Resorts and Dubai-owned Jumeirah Hotels & Resorts, it said in a statement.

The company has over 18 billion riyals ($4.80 billion) worth of committed contracts, the company's Chief Executive John Pagano said, up from 15 billion riyals in November last year.

When completed in 2030, the Red Sea project is expected to comprise 50 hotels and about 1,000 residential properties spread across 22 islands and six onshore sites.

Two hotels are expected to be ready by the end of next year and a third could also be ready by end-2022, Pagano told Reuters on the sidelines of Saudi Arabia's flagship investment conference FII.

He said the focus was on luxury, not mass tourism, with a view to protecting the environment and the project's aim was to attract up to 1 million guests per year when completed.

A first phase comprising 16 hotels is expected to be operational by the end of 2023.

The company will consider several options to raise capital after operations are underway, likely by the end of 2026, including setting up a real estate investment trust, which could then be listed, the CEO said, adding an initial public offering of the company will also be considered.

When asked if alcohol would be allowed, Pagano said: "Today, it's not on the agenda. But this is a changing place, so it could come in the future."

($1 = 3.7507 riyals) (Reporting by Yousef Saba; additional reporting by Saeed Azhar; Writing by Yousef Saba and Alexander Cornwell; Editing by Jason Neely and Barbara Lewis)

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