QE2 will become a floating hotel in Dubai

The Cunard liner Queen Elizabeth 2, has been sold for $100 million 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 re-create 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.