Kurdish businesses have been affected as UAE airlines suspend flights until further notice because of the worsening security situation.
Abu Dhabi-based Cristal Hotels and Resorts reported a drying up of regular business travellers. Those from Lebanon, Turkey and the UAE were regular fixtures at the hotels in Erbil as investment flowed.
The region’s tourism sector alone was expected to receive about US$3.68 billion in foreign investment this year, up by 15 per cent on last year, said Mawlawi Jabar Wahab, the head of the general board of tourism for the Kurdish region, in an interview last year.
It expects to receive 5 million tourists this year, up from 3 million in 2013. Last year’s tourist data are yet to be released, but the Erbil airport reported a slowdown in the number of international passengers because of the security situation, among other reasons.
The ongoing turmoil could prompt a review of any tourism target.
“All that is under suspension,” said Kamal Fakhoury, the vice president and chief operating officer of Cristal Hotels and Resorts, who was in the city last month. “The situation is a little dire with fighting going on 60 kilometres from the border of Kurdistan, and there is a general sense of fear.”
The company’s 95-room luxury property, however, has new clients in the form of military and press corps, and the property expects to occupancy rates near 90 per cent for the next four months, he said. Last month, it had an occupancy rate of about 40 per cent.
“Despite the gloom, though, there is a huge potential in that area with its huge oil and gas reserves, great strategic location, and good vision from the Kurdistan government to build the economy,” Mr Fakhoury said.
The company is going ahead with its projects for three more properties. The 160-room luxury Cristal Grand Erbil, a 112-room, four-star Sanctuary Hotel and a 90-room, midscale rebranded Emerald hotel are expected in the next two years.
As of now, the current property, which has about 80 employees, is having a bomb-proof wall installed as an extra precaution that will be in place in the next three weeks.
Hilton has delayed the opening of its first two hotels in Iraq — the Double Tree Suites by Hilton Erbil and Hilton Erbil Hotel and Spa — to 2017. A 223-room DoubleTree by Hilton Sulaymaniyah is also expected to open then.
“We are closely monitoring the situation in the region and believe that hotel investment will bring opportunity to the local economy of Kurdistan, as we remain committed to these projects during the development stages,” said a Hilton spokesman.
Abu Dhabi-based Rotana expects to manage its second hotel Erbil Arjaan by Rotana next year. It has another five-star property in the pipeline. It opened Erbil Rotana in 2011, which then employed 350 people.
The oil and gas sectors are operating as usual for now, according to some companies.
“Flights continue as normal from Vienna and Turkey, which are our usual ways of travel, and so there is no effect on our operations,” said Andrew Benbow, a spokesman for Genel Energy, with stakes in the Tak Tak and Tawke oilfields in the Kurdish region.
Another operator says it is not facing the difficulty of moving people into the Kurdish region as most of its staff on ground are locals. But there is the longer- term concern of transporting oilfield equipment if the security situation continues to disrupt air travel.
Three UAE airlines — Emirates, Etihad and flydubai — all suspended flights last week to Erbil until further notice. Etihad and Emirates operated four flights a week each to Erbil.
Emirates has also suspended flights to Baghdad, which has six weekly flights, but is flying to Basra.
Flydubai has suspended its daily flights to Erbil and three weekly flights to Sulaymaniyah “due to expanded military activity in the north of the country”, according to a spokeswoman. Passengers with tickets to Erbil and Sulaymaniyah can apply for a refund with their travel agent or the flydubai contact centre.
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