Hotel chains eye expansion in Iran
HTFO | May 11, 2015 | Comments 7
Dubai: Hotel chains are likely to find the Iranian hospitality market more attractive should international economic sanctions imposed on the country be lifted, according to a report issued by a hospitality consulting firm.
“The lifting of sanctions is expected to set off a modern day ‘Gold Rush’ as developers and operators race to secure their position in one of the world’s largest untapped markets,” TRI Consulting said in a report published this month, titled Awaiting the Gold Rush-Exploring the Opportunities in Tehran’s Hotel Market.
Dubai-based Jumeirah Group and Spain’s Melia Hotels International are two of the many hotel companies eyeing expansion in the Iranian market.
“Iran, hopefully, would be a huge opportunity for us,” said Gerald Lawless, chief executive and president of Jumeirah Group, at a session at the Arabian Hotel Investment Conference (AHIC) in Dubai on Thursday.
Echoing Lawless’ views, Maria Zarraluqui, global development managing director at Melia Hotels International, said that there is a big demand for more hotels in Iran that has not been met. “We know that Iran has some challenges because it’s closed to international markets but we see the potential. We see that there is huge internal demand that is not very well treated at the moment. So Iran is a market we would like to explore,” she said, adding that Melia Hotels is interested in introducing its midscale brand, Innside, and its upper upscale brand, Melia, in the country.
Abu Dhabi-based Rotana Hotels, meanwhile, is planning to expand in Iran, with four properties under its brand Rayhaan Hotels and Resorts. Two of the hotels — one featuring 362 rooms and the other 275 — are expected to open in Mashhad by 2017 and 2018 respectively. In Tehran, the operator will open two properties by 2018 — a five-star hotel with 194 rooms and a 210-room four-star hotel.
Isolation
Iran, which has a local population of 80 million and a growing number of tourists, has a lot to offer hotel companies. For one, it lacks good quality hotels, especially in the capital Tehran, which means that chains have the opportunity to offer better products, according to Rashid Aboobacker, senior consultant at TRI Consulting in Dubai.
“The industry’s isolation from the global hospitality and tourism market over the past 30 years has left most of Tehran’s hotels old, outdated and in desperate need of improvement, not only in terms of refurbishments and renovation, but also for the knowledge and expertise of international hotel developers and operators,” as per the TRI report. “This presents an immediate opportunity for international hotel operators through the rebranding of existing properties in the city, particularly the four- and five- star hotels.”
There are 96 hotels in Tehran, of which 16 are classified as four- and five-star. “The potential opening of Iran’s economy presents enormous opportunities in the city’s untapped hotel market,” TRI said in its report.
Also, occupancy and average room rates in the country, where there is more demand than supply, are high, Aboobacker said.
Hotel occupancy levels in Iran increased from 58 per cent in 2013 to 79 per cent in 2014, as per the report.
Last month, Iran and six world powers — the US, France, Britain, Germany, China and Russia — reached a framework agreement on curbing its nuclear programme. The nation accepted restrictions on its nuclear facilities in exchange for the gradual lifting of international sanctions, which have stunted the growth of the economy.
Source: http://gulfnews.com/business/sectors/tourism/hotel-chains-eye-expansion-in-iran-1.1506962
Filed Under: Companies
Aamir Khan
It seems plausible that many hotel chains will be interested in exploring opportunities in Iran once sanctions have beenlifted. These hotel groups appreciate that Iran hasmany challenges because they have been closed to international markets for many
years. Iran has a local population of 80 million and the number of tourists is
growing daily. Because of sanctions it lacks good quality hotels and most of
the hotels are out dated and in need of renovation.
Based on my opinion I agree that the above hotel industries open up chains of their hotels in Iran specifically in the capital Tehran, because based on studies it is a booming tourism place and as mentioned the hotels currently available seem poor in quality and require renovation due to their isolation from global hospitality industry. Hence these hotel groups will experience and benefit a good outcome from this opportunity as hotel occupancy increase year after year and the hotel industry demand exceeds the supply.
The improved
international image increases the hopes of Iran’s
tourism sector to increase the number of tourists. Iran teeming with treasures
of medieval architecture and the effects of the pre-Islamic era, this in
addition to Islamic architecture.
Iran, a magnificent country for it`s culture and heritage can create a market demand for the hospitality and tourism sector. As the absence for hotels this sector, Rotana which is building their hotels in Iran can create a monopoly market and have an advantage over the other hotel chains. Being a rich country in terms of it`s culture, heritage and economy Iran is favorable to boost the reputation which they upheld.
Iran is an Islamic country which holds a lot of cultural towards cultural tourism. People around the world visit this place in Mashhad. By introducing new hotel in that country it would give the country new opportunity to build small-medium businesses as a result would generate employment and economy for the county. So introducing hotels in Iran would be an ideal choice.
It is generally great that hotel chain are looking forward to
find the Iranian hospitality market which would be more attractive for the
traveler as it can give a new touch to the industry as well as to the travelers.
It’s another great opportunity for them to boost their economy.
Iran is very known for their religious/faith, cultural, nature and medical tourism. According to Iran’s officials, about 1,659,000 tourists visited Iran in 2004. With that being said, Iran does need newer and bigger hotels. It will help the local people get jobs, and tourists to stay in a nice comfortable place of their choice.
And I do believe this will happen, specially after the nuclear agreement with the United States, which will make Iran’s market open again and that will lead to having a lot of international companies starting their businesses in Iran and more tourists to visit Iran.