The hotel operator Carlson Rezidor plans to enter Iraq even as security issues plague the region.
“Security outside Kurdistan remains an issue, but this continues to stabilise and this is a growing market,” said Mark Willis, the area vice president for the Middle East and Turkey at Carlson Rezidor.
The company, which has headquarters in Minneapolis and Brussels, will operate a five-star, 260-room Radisson Blu in Erbil, the capital of Kurdistan. It is set to open in 2017. Situated close to the airport, the company expects to tap corporate and business travellers to Kurdistan.
The hotel, which is under construction, will hire a majority of the staff locally.
Passenger traffic and cargo tonnage fell during the first half of the year at Erbil airport as some airlines, including those from the UAE, stopped flying the route because of security concerns.
Traffic is expanding in Dubai, one of the best-performing destinations in the world in terms of revenue per available room, despite a soft year so far.
Carlson Rezidor expects to open a midscale Park Inn in Al Barsha close to Mall of the Emirates next year. Another Park Inn is under development in Motor City with 147 rooms and is expected to open in 2017.
The oversupply of hotel rooms means increased competition and falling room rates. There is also a weaker demand from key source markets such as Russia because of the falling rouble and fluctuating global oil prices.
“It has been a slightly softer year [in Dubai] this year, but we have a positive outlook for the last quarter and next year,” Mr Willis said.
The growth of room inventory has outpaced demand during this year, according to the research company STR Global. The average room rate in July fell 2.2 per cent year on year to below Dh600.
“Dubai has never been just a Russian location. It has always been a diverse visitor location, and it is just one inbound market that is being soft but is picked up by other markets,” Mr Willis said. “This is a worldwide top destination, and things will improve given the fabulous infrastructure and would continue to attract tourists.”
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