Skift Take

One of Dubai's top hotel holding companies suddenly posts two and a half years of financial data on its website. Either FIVE is feeling very proud of itself, or it's planning to go public soon.

The holding company of one of UAE’s best-known local hotel groups, FIVE Holdings, publicly shared its financial results recently – notable because large companies rarely release financial information unless they trade publicly.

FIVE Holdings declined to comment when asked by Skift whether it was considering an IPO.

FIVE shared the results on its website, and here are some of the key numbers:  

  • Profit: 186 million dirhams in the first half of 2023 (approximately $51 million), up 43% compared to the first half of 2022.
  • Revenue: Up 33% to 808 million dirhams ($220 million).
  • Its hospitality business, measured in room revenue and F&B revenue, brought in 463 million dirhams ($126 million).
  • The company makes the rest of its money through its property, real estate development and music label business subsidiaries.
  • While the group’s 2021 and 2022 figures are audited, these figures for the first half of 2023 are not.

FIVE Holdings has three hotels: Its original FIVE Palm Jumeirah; FIVE JVC also in Dubai; and FIVE Zurich, which is a reflagged property it opened last year.

The group has a fourth hotel in development, FIVE LUXE, also in Dubai, planned to open before the end of the year. FIVE assigned these properties a “fair value” of 7.16 billion dirhams (approximately $1.95 billion).

The group also has a private jet that its chairman uses and charters to guests in a venture called FLY FIVE, which is not mentioned in the report.

FIVE Holdings and Pacha

The financial release also confirms an acquisition FIVE executives have been quiet about. Spanish media outlets reported in July that FIVE Holdings was in the process of snapping up part of the country’s entertainment firm, Pacha Group.

The documents say the acquisition is underway “subject to fulfillment of certain conditions,” including regulatory approval.

Should the deal be completed, FIVE will acquire two of Pacha’s existing hotels – Destino and El Hotel Pacha – and the Pacha nightlife business from existing owners, Trilantic Capital Partners.

The deal is reported to cost FIVE 320 million euros (approximately $350 million), according to Diario de Ibiza.

FIVE Holdings intends to split Pacha in two and put one half within the holding company, while original owners Trilantic keep the other portion.

This new business already has a name: Pacha Universe Holding Limited, listed as one of FIVE Holdings’ subsidiaries in its financial report. The company has also already been registered in the Dubai International Financial Center (DIFC), listing its directors as FIVE Holdings chairman Kabir Mulchandani, along with Aloki Batra and Jaydeep Anand who are CEO and CFO of Mulchandani’s company respectively.

Trilantic – owners since 2017 through a €350 million sale – remains in charge of Pacha’s other nightclub brand Lio. To complicate the deal further, a Lio nightclub will open in FIVE LUXE this year, rather than a Pacha nightclub.

Why would a privately-held hotel group such as FIVE Hotels in Dubai start publishing its financial results?
A privately-held hotel group such as FIVE Hotels in Dubai might choose to start publishing its financial results for a variety of reasons:

Transparency and Trust: Disclosing financial results can build trust and credibility with stakeholders, including employees, customers, business partners, and potential investors. It shows that the company is confident in its performance and willing to share this information publicly.

Attracting Investment: If the hotel group is considering going public in the future, releasing financial results can attract interest from potential investors and give them a sense of the company’s financial health and potential for growth.

Benchmarking: Publishing financial results allows for benchmarking against competitors within the industry. This can be useful for the company’s strategic planning and helps stakeholders understand the company’s position in the market.

Public Relations: Positive financial results can boost the company’s reputation and brand image. They can serve as a public relations tool to highlight the company’s success and growth potential.

All these factors can contribute to a strategic decision to share financial results publicly, even for privately-held companies.

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Tags: Dubai Hotels

Photo credit: FIVE Palm Jumeirah hotel

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