Hotels Head for Kurdish Iraq
Wall Street Journal
By ALEXANDRA BERZON
Major U.S. hotel brands are moving into the north of Iraq, a reflection of growing economic development in the Kurdistan region of a country that most U.S. consumer brands have long avoided.
On Sunday at the new U.S. consulate in Erbil in northern Iraq, Marriott International Inc. plans to disclose two of its brands, Marriott Hotels & Resorts and Marriott Executive Apartments, will join a large real estate development project. That follows an announcement in May that Best Western International Inc. plans to open its first hotel in Erbil.
The three hotels are on pace to become the first U.S. hotel brands in modern-day Iraq. A Dubai-based hotel chain, Rotana, earlier opened in the city. Other hotel companies, such as Intercontinental Hotels Group, have said recently they would begin research on the region.
“Our view is that the commercial world is coming into Erbil,” said Ed Fuller, Marriott’s head of international lodging. “This is an emerging country.”
The interest comes as the turmoil in the Middle East and North Africa has presented the hotel industry big challenges. Marriott earlier this year closed its hotel in Libya due to unrest in the country. In Egypt, the company continues to operate seven hotels. Some expansion plans have slowed while others are moving ahead, Mr. Fuller said.
Two years ago, Mr. Fuller and other Marriott executives met in Baghdad with Gen. David Petraeus, who tried to encourage the chain to open a hotel. But he felt then “it was too early.”
Today, Erbil, which is part of the relatively safe Kurdistan region of Iraq, has seen a boom in construction projects, including a new airport that opened in 2010, driven by a boom in the energy business there.
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The Marriott hotels will be part of a $1 billion real estate development currently under construction, called Empire Iraq, that will include villas, apartments, an office tower and a motorsports track.
The project includes a 200-room five-star hotel, now partly completed. It will be called Erbil Marriott and will have four restaurants and lounges. The hotel will open in 2014, Peshraw Agha, chairman of the Empire Iraq project said in an interview.
As is standard in the U.S. hotel industry, Marriott has agreed to provide its name and manage the Erbil hotels, but will not be directly investing in the project.
Mr. Agha said the Empire Iraq project includes Iraqi and Turkish investors. He said there was room for a number of new Western-branded hotels in the city, given that much of the development occurring there attracts Iraqis, foreign contractors and investors to town.
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