By Andrew Mernin
Hotel industry bears brunt as region’s CEOs face climate of instability
|~||~||~|Lebanon’s hospitality sector could take up to five years to recover from the damage caused by the Israeli-Hezbollah conflict, according to the CEO of one of the largest hotel chains in the region.
Rotana hotels has two properties in the Lebanese capital with two more planned for construction by 2008. Selim El Zyr, president and CEO of Rotana said the financial damage caused by the conflict on Beirut’s growing hospitality industry could be devastating. “It could take one, two or even five years for Beirut’s hospitality sector to recover and to get the visitor numbers back”, he told CEO Middle East.
“We have been affected very badly. We have one hotel that has been completely deserted and another where there are many people waiting to leave”, he added. Insisting that his staff would remain in Beirut and that Rotana’s two construction projects in the capital had not yet been abandoned, El Zyr stressed that the conflict would not affect the hospitality sector across the entire region, with many Lebanon-bound visitors likely to head to Egypt or Syria.
Having launched its US $150 million ‘La Residence’ property project in Beirut last month, Dubai-based real estate developer Damac, could be another business left picking up the pieces. Peter Riddoch, CEO of Damac, said: “In the past Lebanon has overcome challenges and the real estate market will be able to come through the situation stronger.
None of the people that have invested in the ‘La Residence’ project have asked for their money back”, he added.
As the situation worsens, Dr. Karim El Solh, chief executive of Gulf Capital — one of the largest private equity businesses in the region — believes the ripple effect across the entire regional business community could be huge.
“You will see a reverse of investments back into the Gulf. Markets such as Lebanon and Syria were booming but Gulf investors are likely to be much more inward looking for the time being.
“The region will need to offer investors prospects of stability and renewed growth before investments start flowing back again. The Gulf capital markets will be the net beneficiaries, with the retained wealth going to buttress and stabilize the falling regional markets.”||**||