The Dubai-based hotel firm Ramee Group is eying an entry into the growing Iranian tourism market.
In an interview with Hospitalitybizindia.com, the group’s director of operations in India, Nihit Srivastava, said Iran is among the new markets that Ramee is watching closely.
The Iranian government’s “keenness on welcoming new hotel chains” and the country’s “growing economy, which enjoys a healthy relationship with [regional countries] and India” were cited as reasons why Iran is an interesting market to explore.
Ramee Group operates over 40 mid-range hotels and serviced apartments in the UAE, Bahrain, Oman and India, and has recently expanded into the luxury market with the opening of the five-star Ramee Grand Hotel & Spa in Bahrain.
Iran is renewing ties with the world in the hope of drawing foreign investment by presenting itself as a business-friendly market, as western sanctions were lifted against the country following the nuclear deal.
The government has made clear that developing tourism—a $7.2 trillion industry—tops its agenda. This has stoked the interest of investors and international event organizers warming up to Iran.
An oft-cited shortcoming in the hospitality sector is the lack of four- and five-star hotels, which is why tourism authorities are putting in a lot of effort to increase the number of quality hotels from 160 to 400 in the next decade.
“We’re looking at Iran as a long-term investment, so bringing our luxury brands is very much on the cards,” says Suravut Thongthaem, senior vice president of Thai firm ONYX Hospitality Group, which owns the popular Oriental Residence brand, told Financial Tribune earlier this month.
Other hotel groups, namely Shaza and Minor, both based in Dubai, UAE, share the sentiment.
Shaza Hotels, an affiliate of the prestigious Kempinski Hotel chain, announced last year that it was targeting an Iranian market entry in the next five years.
Minor believes Iran is “a great market with a lot of potential, we’re very serious about coming here”, Ramzy Fenianos, vice president for development at Minor, told Financial Tribune.
Foreign hotel chains have already started expanding their operations into Iran. France’s Accor opened two hotels at the Imam Khomeini International Airport in 2015, while Spain’s Melia will open its five-star property in Salman Shahr, Mazandaran Province, later this year.
The UAE-based Rotana is building two hotels each in Tehran and Mashhad, and expects to launch them in 2018.
Germany’s Steigenberger Hotels agreed last year to build 10 hotels in the next decade in Iran, shortly after Iran announced it had reached an agreement with Turkish investors to build the same number of hotels within the same period.
Still, some of the biggest hotel companies are holding back. UK-based InterContinental Hotels Group, owner of the Holiday Inn and Crowne Plaza brands, currently has no plans to expand to Iran, while US-based Hilton Worldwide Holdings is also holding off, despite seeing “significant potential for hospitality growth”, Bloomberg reported last year.
While the UN, the US and European nations lifted sanctions connected to Iran’s nuclear program in January 2016, most American firms are still prohibited from exploring the Iranian market due to other sanctions imposed by Washington on Tehran.