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Some major U.S. hotels moving into Iraq

Best Western recently broke ground on two hotels in Erbil, the capital city of Iraqi Kurdistan in the northern part of the country. Hilton Worldwide is set to open DoubleTree Suites by Hilton Erbil at the end of 2013. And Marriott International will open two properties there in 2014.

Hotel executives say they see an opportunity in northern Iraq, which is attracting so much foreign investment because of its oil and gas reserves that a new airport opened there last year.

The area is also considered relatively safe, having severed ties with Saddam Hussein after the 1990-91 Persian Gulf War. As a result, it was spared the fighting that the capital, Baghdad, and other parts of the country endured from the 2003 war. Its scenic beauty and archaeological ruins also earned it a spot on National Geographic’s “20 best trips of 2011.”

“If you look at the strong demand that will come from business and leisure travelers, and that there’s a shortage of supply of hotels … that makes this appealing to us,” says David Kong, Best Western International president and CEO.

Kong says the company is considering deals for two other hotels in Sulaimaniyah and Dohuk, also in Iraqi Kurdistan.

“This is a very positive sign of the potential Iraq has to offer,” says Victoria Berry, senior strategist of FutureBrand North America, a brand-consulting firm. Still, she says, “the perceptions of safety, especially in terms of war, corruption and crime, as well as the lack of modern infrastructure, are key areas that could impact negatively on Iraq’s ability to appeal to a base of leisure tourists.”

Hotel executives acknowledge that, for now, the properties will appeal more to business travelers than to Western tourists because of occasional skirmishes with neighboring Turkey and questions about the rest of the country’s stability after the U.S. pullout.

“There will be tremendous tourism opportunities some day,” says Ed Fuller, president and managing director of international lodging for Marriott International. “But I think that’s distant in the future.”

Executives of all three brands say they will have security measures in place to protect their employees and clients. Security is “always front and center of our thinking, but that is something we’re very experienced dealing with,” says Ian Carter, president of global operations and development for Hilton Worldwide.

Hilton’s DoubleTree will have 200 suites, a business center, health club, two restaurants and a lobby lounge and bar. Marriott’s properties will include a 200-room Marriott Hotels Resorts hotel and a 75-unit Marriott Executive Apartments property. The Best Western Premier Erbil Hotel will have 160 rooms and 20 suites, while the Best Western Premier Erbil Airport will have 82 rooms.

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