Hotels and Tourism, Iraqi Style

23rd July 2009 (Last Updated July 23rd, 2009 18:30)

Modern-day hotel chains have mammoth obstacles to overcome if they want to operate in the war-ravaged land. Dr Gareth Evans looks at the chains wanting to operate in Iraq and asks if they can succeed.

Hotels and Tourism, Iraqi Style

On 1 May 2003, President Bush announced the end of major combat operations in Iraq – a mere 41 days after they had begun – against a backdrop banner which simply read “Mission Accomplished”.

History will doubtless judge that somewhat premature, but in the wake of March’s first officially sanctioned tour outside of the northern Kurdish region since the invasion, the outlook for the future of tourism in Iraq shows that pulling Iraq out of war could take some time yet.

The question remains as to whether the country will join other heritage-rich nations in the region – notably Jordan and Egypt – which see their economies bolstered by inbound tourists. There’s no escaping the huge potential lure of the antiquities of Mesopotamia and the ancient Caliphate of Baghdad, but will the “cradle of civilisation” finally become one of the world’s hotspots – for all the right reasons?

Reconstruction plans

When the Washington Post ran a story in December 2008 that Marriott International were “mulling” a hotel in the country’s capital, it did begin to look as if a fairly significant corner had at last been turned. And there’s certainly no shortage of optimism being expressed in official circles. A range of tourist projects and initiatives have already received funding and billions of dollars are earmarked to improve Iraq’s rail and air links.

The Middle East has been identified as one of the world’s strongest potential growth markets for hotel development and even though much of this is likely to be focused elsewhere, Iraq unquestionably has its draws. As Nigel Hayward, British Consul General for southern Iraq, has pointed out, aside of the country’s historical sites, Basra port could become a destination for cruise ships, while the marshes around the city – part of important migration routes for wild birds – might one day kick-start Iraqi eco-tourism. These are things for the future, however; more immediately, the country is uniquely placed to benefit from religious travel.

“Basra port could become a destination for cruise ships, while the marshes around the city might one day kick-start Iraqi eco-tourism.”

Home to some of Islam’s holiest sites, Iraq already receives over a third of a million pilgrims intent on visiting the likes of the Shiite shrines of the Imam Hussein in Karbala and Imam Ali in Najaf. These numbers have remained fairly constant throughout the country’s turbulent recent history. This provides a notable statistic – at a time when hotel occupancy rates have struggled to break 20% on average across the country, here 70% is commonplace during the Hajj season. Unsurprisingly, the Iraqi National Investment Commission describes Najaf as “a model for foreign investment in Iraq’s tourism industry”.

Clearly, however, the motivation for these visitors is stronger than a casual desire to see the sights, which changes how they view the threat of bullets and bombs. As tourism ministry spokesman Abdul Zahra al-Talkami explains: “They’re looking for martyrdom, so they don’t care about the risks.”

The goal of bringing more cautious tourists to Iraq, on the other hand, is an enormous one, and not helped by the fact that in general the country’s hotel and service industry is lacking by international standards. Even so, the task has attracted some major players and Marriott are not the only company to have been approached. By the end of 2009, the five-star Erbil Rotana Hotel – described by Rotana’s executive director, Salim Al-Zeer, as “the most prominent hotel in the Kurdistan region” – is due to open as part of their Middle Eastern expansion plan.

A Pentagon-sanctioned $5bn development “dream list” to transform a demilitarised Green Zone into an inspirational show-piece of a reborn Baghdad is also in the works – a development complete with luxury hotels, shopping facilities and residential units. Add to this the fact that real estate prices are 15 times more expensive than a few years ago, and the future seems bright. Or does it?

The unofficial picture

As with so much of this beleaguered nation, the answer largely depends on who you ask – and trying to find out what is really going on in Iraq for this piece produced some interesting takes on the question. One thing is clear; the picture that emerges from decidedly unofficial sources is a very different one from the upbeat reconstructive optimism.

While it seems that many potential investors are keeping a watchful eye on the long game, weighing up the prospect that Iraq could be another of the world’s former war zones to pay big dividends to early-bird developers, few of them have actually taken the plunge. Marriott, for example, “has decided not to build a hotel in Baghdad at the present time” and although the showpiece Sindbad Hotel Complex and Conference Center – a project from the renowned Baghdad-born architect Hisham N Ashkouri – gained political risk insurance in 2004, investment has been slow to appear.

“Home to some of Islam’s holiest sites, Iraq already receives over a third of a million pilgrims.”

Corruption is seemingly endemic – and it’s certainly not just amongst the Iraqis themselves. According to February’s report by special inspectors Thomas Gimble and Stuart Bowen to the US Commission on Wartime Contracting, there are 154 ongoing criminal investigations into alleged bribery, impropriety and theft. In the words of the CBS News report at the time, “fraud plagues Iraq reconstruction”. When it comes to schemes winning approval, a number of the people I spoke to cite money and political influence as the major deciding factors. Some of these stories may be tainted by personal disgruntlement, but not all of them.

The tourist industry has other problems, not least because many of the top officials are relatively inexperienced and excessive red-tape mires everything. In addition, travel itself is a nightmare, with innumerable security checkpoints and interminable delays making it something only the most determined of tourists would envisage. As Geoff Hann, MD of Hinterland Travel – the man behind the landmark official tour in March – points out, this is something of a double whammy. Obviously until it becomes easier to travel, hotels will remain largely empty – but equally without greater freedom of movement for hotel staff, it will be difficult to improve the poor standard of provincial hotels in particular.

The “other Iraq”

Nevertheless, it’s not all bad news. In 2006, the Kurdistan Development Corporation ran a campaign on US television asking “have you seen the other Iraq?”. Partisan considerations aside, by all accounts the distinction is a fair one and largely demonstrates the indivisible link between tourism, stability, security and money.

“Nothing will change significantly without greater stability.”

With large investments pouring into the region from Iraqi expats as well as international sources to fund new hotels and infrastructure, the local tourist industry has gathered considerable momentum. Admittedly, it will require the security situation to improve still further before international visitors replace internal tourists in any great numbers, but there is a real glimmer of hope for this “other” face of Iraq.

The inevitable question remains, what about the rest of the country? From what I’ve heard, it seems opinion is sharply divided and in the end where you stand on the issue probably comes down to individual predisposition; the pessimist is never going to see that glass as half full. One thing is for sure, nothing will change significantly without greater stability; you’d need a lot of nerve to start new developments as things are, and few investors seem ready to take that gamble.

For my part, I’d have to agree with Geoff Hann that bringing in the visitors “will take a lot of effort and a lot of hard work”, but then it’s worth remembering that Iraq’s first recorded tourist – Jonah – didn’t exactly have an easy time of it either.