Owner disputes delay Hilton’s Middle East hotel launches

US hotelier has 30 hotels in pipeline, plans to bolster property portfolio by 80% by 2015
Owner disputes delay Hilton’s Middle East hotel launches
Hilton Worldwide operates 49 hotels across 15 countries in the Middle East and Africa
By Shane McGinley
Mon 09 May 2011 12:38 PM

Hilton Worldwide has seen its expansion in the Middle East
curtailed after disputes with property owners stalled the launch of three branded
hotels, a senior executive said.

The US-based hotel chain has 30 hotels in its regional pipeline,
but said issues with property owners have halted progress in Jordan, Beirut and
Tunisia.

The group has signed an agreement to manage the Hilton Tala
Bay Adaba in Jordan, but the property’s opening date remains unconfirmed amid
an ongoing dispute with the landlord.

Rudi Jagersbacher, area president for the Middle East and
Africa, said Hilton may still opt out of the contract.

“There is a signed deal and any deal we have you have ‘drop
dates’,” he told Arabian Business. “That ‘drop date’ hasn’t come up yet but if
it comes we will obviously reevaluate. Within the next three months we will
know.”

In Lebanon, the company’s Hilton Beirut property is also
beset with legal disputes, Jagersbacher said. “[The hotel] is 90 percent ready
and has been ready for five years… [but] there is a dispute between owners and
they are suing each others’ pants off,” he said.

Regional unrest in Tunisia, where widespread protests ousted
long-term president Zine El Abidine Ben Ali in January, has also led to confusion
over the ownership of the Hilton Tunis Cartharge.

 “I think the problem
is to establish who is the owner...the ownership is not that clear any more so
the legal entity is a priority before we move to the next stage,” Jagersbacher
said. “[But] we have it, it’s there.”

The chain, which operates 49 hotels across 15 countries in
the Middle East and Africa, plans to add six properties to its regional
portfolio this year and is signing properties at a rate of one a month.

The openings are part of a plan to grow the Hilton portfolio
by 80 percent in the next three to four years, Hilton said last week.

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