As reported earlier, a four-star Axis hotel has opened in Tehran under the management of France’s Accor, with a five-star Axis Prime set to open soon nearby. Beyond Accor, other brands are also looking to gain a foothold in the country, signalling what may be a sea change for Iran's hospitality sector.
A deadline of June 30 has been set for a nuclear agreement that may well lift sanctions, driving international investment in the country's hospitality sector. Business interest from around world in various sectors of Iran has been growing exponentially, and driven by visitations of business executives preparing to do business there, the Market Mogul reports. Business tourism alone "carries a heavy deal of consideration," the site claims. The country has "not more than a few" locally branded hotels that meet global hospitality standards, which has created an immediate market gap that may take years to remedy.
In terms of Foreign Direct Investment, the Market Mogul notes that Iran's government has provided a series of incentives through the law on foreign investment in Iran under the name of Foreign Investment Promotion and Protection Act. These incentives include a 50-percent full-term tax reduction on income, loan structure and eligibility of government funding, property ownership rights including 100-percent ownership in free zones, unlimited transfer of profit capital and dividends.
Christophe Landais, managing director Accor Middle East, told Hotelier Middle East that his company has “been keeping an eye on Iran for many years. It’s a large, $85 million market with an underdeveloped hospitality market and we can certainly develop all of our brands there. The country has always been very stable but not open to signings, and now we see it happening.”
Other companies are also eyeing Iran: Rotana is also expected to open the five-star, 200-key Rayhaan by Rotana in 2017, and the five-star Espinas Behnood Hotel will open this year in North Tehran, with 600 rooms. Rudi Jagersbacher, president, Middle East & Africa at Hilton Worldwide, told the site that Hilton would only operate if its team members could feel safe and secure, and Clarence Tan, senior vice president development AMEA at IHG, said that he would like to see the operator re-enter the country. As previously noted, Didar Complex, an Iranian group, began to build a $300 million 300-room British-designed hotel more than a year ago in central Tehran, but is still seeking foreign investment to complete the project.