After Iran deal closed, hoteliers ponder an open Iran

Since Tuesday's historic nuclear agreement with Iran, hotel operators are excited about the possibility of expansion into the country, which will see international sanctions lifted in exchange for reducing its uranium enrichment capacity.

The deal, between Iran and the U.S., Britain, France, Russia, China and Germany, makes relations with Iran easier for businesses.

As it relates to hotels, prior to the Islamic Revolution in 1979, there were a number of international operators, such as IHG, Hyatt, Hilton and Starwood, operating in Iran. That was curbed though as they had since been prohibited from signing deals due to sanctions.

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However, now that the sanctions are lifting, so too will tourism.

Alex Kyriakidis, president and managing director Marriott International MEA, told Hotelier Middle East: "We are pleased with the historic progress made regarding relations between Iran and the international community. "At this time we do not have any hotels in Iran. However we will be watching carefully the status of trade sanctions."

Meanwhile, French operator AccorHotels is reportedly in advanced negotiations for two properties in Tehran under its ibis and Novotel brands.

Christophe Landais, managing director Accor Middle East, told Hotelier Middle East: "We expect the recent agreements to potentially open up tremendous opportunities and rapid growth for the hospitality and tourism industry in Iran. AccorHotels is well positioned to play a leading role in the development of the hospitality and tourism industry throughout Iran. AccorHotels does not at present have any management agreements in place in Iran, however we are considering a number of potential opportunities across a broad range of segments."

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Middle East-based hotel operators are also chomping at the bit, including Rotana Hotel Management Corporation and Hospitality Management Holdings. Rotana already has four properties under development in Iran.

"It is important to note that signing the initial agreement in 2013 has resulted a surge in hotel occupancy levels, which increased by 36 percent versus 2013," Omer Kaddouri, president & CEO of Rotana, told Hotelier Middle East. "With the lifting of sanctions, we are sure that all developers and operators will be racing to secure their position in one of the world’s largest untapped markets."

Rotana will open a 362-room hotel in 2017, and a 275-room property in 2018, both in the city of Mashhad.

In the capital city of Tehran, two further Rayhaan properties will open by 2018: a 194-room five-star hotel and a four-star 210-key property.

Hospitality Management Holdings (HMH), another UAE-based operator, is also in "serious talks" with developers in Iran, Hotelier reports.

A recent report by TRI Consulting, Awaiting the Gold Rush: Exploring the Opportunities in Tehran’s Hotel Market, states that Iran has a lack of four- and five-star hotels and good quality accommodation.

The Tehran hotel market reportedly has just 96 hotels, compared to neighboring Dubai’s 657.

Only 16 of these are classified as four- and five-star, and so the potential opening of the market presents “enormous opportunities for the city’s untapped hotel market” the report explains.

The latest published data by the Iran government showed that 4.8 million foreign tourists arrived in the country for the fiscal year ending March 20, 2014—an increase on the 2010 figure of 3.1 million. By 2024, 5.2 million international visitors are expected, TRI Consulting’s report states.

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