Big players look to bright future despite turmoil in region

Hotel operators are confident business will remain buoyant despite regional unrest

Hotel chiefs from some of the biggest global chains have said they are confident in the long-term potential of the industry in the region, despite setbacks to some projects.

"In places like Cairo, obviously we are going to take delays," said Roeland Vos, the president of Europe, the Middle East and Africa for Starwood Hotels and Resorts, the brands of which include Le Meridien and Sheraton.

"We're building a St Regis, we're building a Meridien and those projects will take a bit of delay. How much … I don't know. It will not derail the long-term upside and we remain very bullish and positive about how the industry is doing.

"… We've seen similar events happen before and we'll continue to see those going forward."

Hilton Worldwide, which manages 16 hotels in Egypt, said there was unlikely to be a full recovery in Cairo before the first quarter of next year.

"In the city centre we see only a very slight recovery," said Rudi Jagersbacher, the Hilton president for the Middle East and Africa. "What we are missing is the international inbound market. The city centre in our opinion won't come back before quarter one of next year."

Mr Jagersbacher said occupancy in Cairo was about 20 per cent, but Hilton's Red Sea resorts were recovering much more quickly.

"On the resorts we are already at 60 per cent occupancy," he said. "I reckon by quarter four [this year] we'll probably have recovered most of the losses of the resorts."

But the company had planned to convert a hotel into a Hilton in Tunisia; a project that was scheduled to open in January. It has been put on hold because of unrest in the country and its future is uncertain.

"We were about to rebrand it and then we held back and said let's wait and see," Mr Jagersbacher said.

"With all the issues that you have now next to Tunisia that's going to be a big question mark in their level of their tourism aspect. I think it's going to be difficult for this year."

He said his company's Conrad hotel on Sheikh Zayed Road in Dubai was expected to open in the first half of next year. Hilton also has an agreement to open a hotel under its DoubleTree brand in Barsha.

Kirk Kinsell, the Europe, Middle East and Africa president of InterContinental Hotels Group (IHG), said markets in the Middle East had the ability to recover quickly.

"We're still very confident in the Middle East over the long term," Mr Kinsell said. "Where you have regime change or social unrest or tsunamis, earthquakes, tornadoes - we've had them all [globally] across IHG over the past year."

Mr Vos said one of the major global trends for the industry over the coming years, which was likely to benefit the region, was the growth in wealth in emerging markets.

"A large number of people will go from poverty to some sort of prosperity, who will then have the … money and the time available to travel around the world," he said.