Cape Town poised to berth QE2 floating hotel

South Africa has confirmed it is considering a proposal from Dubai to permanently berth the Queen Elizabeth 2 liner at the Victoria and Albert Waterfront in Cape Town, and convert it into a luxury floating hotel.

Ronel Bester, spokesman for South Africa’s department of tourism, said that officials were talking with local hotels and other tourism-related business and hoped to reach a decision by the end of next week.The Cunard ship was bought by Dubai World for $100m in 2007. However Nakheel, one of the main shareholders in the government-owned conglomerate, has been severely hit by the Dubai property crash. It is embarking on a radical cost-cutting spree which has included slashing staff, cancelling projects and scaling back existing projects as it battles for survival. It also needs to refinance upcoming loan commitments, including a $3.5bn Islamic bond which matures in December.

Nakheel had planned to “usher in the next exciting chapter of her rich and dignified life”, including building a 6,000 sq yd spa complex, and replacing the ship’s funnel with a glass structure to house penthouse suites.

Even in March, Nakheel remained adamant it was business as usual. “The plans for QE2’s full restoration and refurbishment are ongoing. We have no intention of selling the ship to any party whatsoever.”

The rate of tourism growth in Dubai has fallen off dramatically, reducing occupancy rates as new hotel stock comes on stream, while South Africa is struggling to meet the demand for hotel rooms next year during the World Cup.

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Situated between Robben Island and Table Mountain, the V&A Waterfront faces onto Cape Town’s harbour and is one of the city’s most visited tourist sites, and includes a string of hotels, restaurants, shops and a marina.