*

No business impact from weekend flare-up in MidEast -

chairman

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Company could be valued at $2.5-3 bln - internal estimates

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FIVE rolls out stock-based compensation plan for top

workers

(Recasts first paragraph to clarify potential impact, adds

background in paragraph 20)

By Hadeel Al Sayegh and Federico Maccioni

DUBAI, April 15 (Reuters) - Dubai party hotel operator

FIVE Holdings is concerned about escalating tensions in the

Middle East but has not seen disruptions from the weekend's Iran

attack, its chairman told Reuters on Monday, as the company

works toward an IPO in 2025.

During this weekend's major flare-up, Iran launched more

than 300 missiles and drones at Israel, the first such direct

attack between the two foes.

Chairman Kabir Mulchandani told Reuters that the company has

continued to grow despite a drop in customers from Israel since

the Hamas attacks inside Israel in October.

"But it remains to be seen how much this escalates and only

then we will know," he added, in one of the first comments from

the hospitality industry since Saturday night's attack.

FIVE owns one of Dubai's biggest party hotels, where guests

can park their supercars inside a nightclub for 10,000 dirhams

($2,723). It also offers an even more exclusive party in the sky

for the super-rich on its own 16-passenger private jet for

$14,000 an hour.

Dubai is the biggest tourism and trade hub in the Middle

East, attracting a record 17.15 million international overnight

visitors last year.

The United Arab Emirates became the most prominent Arab

nation to establish diplomatic ties with Israel in 30 years

under the U.S.-brokered Abraham Accords in 2020 and forged

partnerships that saw an influx of Israeli tourists to Dubai.

That changed with Israel's invasion and bombardment of Gaza

in response to the Hamas attacks of Oct. 7.

"Obviously we had a strong Israel market customer, 8% of our

business was from Israel. So that definitely impacted us because

that became practically zero," said Mulchandani, who is also

FIVE's founder.

The company, which operates party hotels in Dubai, Ibiza and

Zurich, was also hit by a drop in U.S. citizens of Jewish origin

travelling to the Middle East, he added.

BOOMING BUSINESS

But the loss of Israeli business has not put a damper on

growth. FIVE said on Monday it was rolling out a stock-based

compensation plan to reward top workers as it looks ahead to a

potential public listing.

Mulchandani said the company, which estimates it could be

worth $2.5 billion to $3.0 billion, is planning to list in Dubai

and is in talks with advisers about a potential dual listing,

without elaborating on specific locations.

Dubai was quick to reopen after the pandemic. That, along

with an influx of Russians and business professionals as well as

relaxed social and visa rules, helped fuel an economic recovery

that has also seen property prices and rents balloon.

"We're now at 155,000 hotel rooms in Dubai, which is bigger

than Vegas," Mulchandani said of overall sector numbers for the

city.

"What we're seeing is a massive shift in spending patterns

on entertainment", he said, adding that FIVE sells about 40,000

bottles of champagne a year in Dubai and Ibiza.

Last weekend's opening party at its FIVE LUXE venue in Dubai

generated gross revenue of 5.9 million dirhams ($1.6 million),

higher than the best night at Ibiza's Pacha, he said.

"It's something we've never seen ... So there's an explosion

in the sector," Mulchandani said.

Gulf governments have been trying to encourage more

family-owned companies to list in a bid to deepen their capital

markets, with Saudi Arabia so far seeing the most success.

Last year, the company scored a top ESG (environmental,

social and governance) rating for a green bond that helped

purchase Spanish group Pacha, in a deal worth 303 million euros

($321.9 million). The transaction, which involved buying Pacha's

hotel and nightclub businesses, also helped widen FIVE's

offerings of star DJs at its venues.

($1 = 3.6723 UAE dirham)

($1 = 0.9413 euros)