Liner QE2 to become Dubai floating hotel

DUBAI (Reuters) - The Cunard liner QE2 has been sold for $100 million (50 million pounds) and is to become a floating hotel and museum to draw tourists to one of Dubai's man-made islands.

State-owned private equity firm Istithmar is buying the QE2, the longest-serving ship in the 168-year history of the Cunard line, which belongs to Carnival Corp., the world's largest cruise operator.

The liner will be anchored off the Palm Jumeirah, the smallest of three islands shaped as palm fronds that government-owned developer Nakheel is building off Dubai's coast.

The cruise ship, which will also have shops on board, will arrive in Dubai in 2009 as part of a drive to turn the island into a tourist destination, Nakheel spokesman Charlie Taylor said. Around 6.5 million people visited Dubai last year, more than any Arab destination except Egypt.

The ship will be refurbished to recreate QE2's original interior decor and fittings, Istithmar said.

The ship, launched by Queen Elizabeth 40 years ago, came into service in 1969 and has crossed the Atlantic more than 800 times, carrying more than 2.5 million passengers, according to the statement.

"Dubai is a maritime nation and we understand the rich heritage of QE2," the statement quoted Sultan Ahmed bin Sulayem, chairman of Istithmar's parent, Dubai World, as saying.

Cunard, which also operates the world's largest ocean liner, the Queen Mary 2, said it was selling the QE2 following its long service and saw it as a way of preserving the long history of the ship.

"In ocean-going ship terms she has had a long life. We received a very strong offer which allowed us to preserve the ship for further generations," President and Managing Director of Cunard Carol Marlow told Reuters.