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Article

4 Mar 2016

Author:
Dalia Fahmy, BDlive

Western hotel groups scramble to enter Iran hospitality market

“Western hotel groups scramble to enter Iran hospitality market,” 4 Mar 2016

Iran…is getting its first foreign-branded seaside hotel…Melia Hotels International planned to open the five-star property in a 130m tower on the Caspian Sea…The announcement comes after a slew of trade sanctions on the Islamic Republic were lifted in January.

Iran’s first foreign-branded hotels in decades arrived in October, when French operator Accor opened a Novotel and an Ibis near Tehran’s Imam Khomeini International Airport. Hoteliers, including Dubai-based Jumeirah and Abu Dhabi-based Rotana, want to cash in on growing tourism in one of the Middle East’s oldest civilisations, with its ancient ruins of Persepolis, pristine beaches, and snowcapped skiing slopes.

It will compete with a property being built by Rotana to become the first luxury hotel operated by an overseas company in Iran since Ayatollah Khomeini’s revolution forced Hyatt, Sheraton, and owners of other brands to flee in 1979.

Lodging revenue is set to increase about 25% during that time, the firm predicts, as the number of visitors is forecast to grow by a similar percentage, to 6.3-million.

"The quality of accommodation is not according to western standards, and we expect a great shift on that front, mostly through launches of international hotel chains."

Tehran and the religious pilgrimage site of Mashhad will probably draw most of the investment.

Still, some of the biggest hotel companies are holding back.

UK-based InterContinental Hotels Group, owner of the Holiday Inn and Crowne Plaza brands, had no plans to expand to Iran, a spokesman said. US-based Hilton Worldwide Holdings was also holding off, despite seeing "significant potential for hospitality growth", the company said.

For Melia, the lifting of the sanctions means it can enter before US competitors do. "Our Mediterranean roots make it easier for us to connect with the Middle East hospitality concept ," Mr Escarrer said.

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