Luxury Hotels Boom in the Middle East

Feb. 6, 2008— -- In the Middle East, it's not only oil that's booming.

Business and leisure travel to the region has climbed 18 percent a year since 2005 , according to Deloitte's annual Hotel Benchmark Survey, released this week, and is expected to grow another 6 percent this year, to 41 million visitors.

This has fueled renewed interest in the palace-style hotels that once pampered kings and aristocrats more than a century ago. As a result, exquisite restorations of such ancient structures, including cave dwellings and Bedouin camps (some dating to the 1st century) coupled with modern luxuries such as air conditioning and Bulgari toiletries are now available to luxury travelers across the Middle East, from Bethlehem to the Turkish hinterlands. And new hotels are going up "at breakneck speed," says Lorna Clarke, director of the survey.

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This tourism is transforming the Middle East, particularly Dubai, says Albert Herrera, vice president of luxury hotel reservation service Virtuoso, Ltd.

"When I first came in 1999, they were giving hotel rooms away," he says. "Now tourism is their biggest revenue source, and it's having rippling effects on other economies in the region."

Indeed, the average gross domestic product in the Middle East grew 5.4 percent in 2007 (compared to 3.4 percent for the rest of the world), according to Deloitte's report, in part because of the tourist boom.

Sensational Spots

The Emir Amin Palace Hotel in Beiteddine, Lebanon, was the first of these; restored by the late Lebanese architect Pierre El-Khoury in 1965, it was originally built by Emir Bashir Shihab II for his son, and was inhabited by the Emirs for centuries. It is part local monument, part upscale hotel with its historical brandishes serving as the décor for an otherwise modern-looking space.

The Emir Amin is near several of Lebanon's most important monarchical artifacts, including the Beiteddine Palace and the Moukhtara Palace, the latter built upon the site of a crusade-era castle. The 22 elegant, spacious guest rooms and stunning views of the Shouf Mountains from the garden afford guests an exclusive perspective of the lifestyle of princes and the land they once roamed.

Istanbul's 282-room Ciragan Palace, on the Bosphorus Sea, is another restored Ottoman Palace. The home of a line of Ottoman sultans before the property was finally handed over to the municipality at the beginning of the 20th century, it was partially restored in 1991 by the Kempsinki Group for $100 million. An additional $5 million was spent last year to finish the 31 guest suites. The hotel boasts 19th-century marble and mother-of-pearl in the main lobby. The original stone latticework and marble colonnade on the hotel façade were recreated by hand from rubble salvaged from the original site. Hotel guests receive a view of the Bosphorus Suspension Bridge, the 13th largest suspension bridge in the world.

Although nothing trumps a palace, hoteliers must compete for modern travelers' interest in experiencing all the luxuries of a bygone era--indoors and out.

With that in mind, hoteliers are allowing travelers to sleep high on the dunes in swanky tents modeled after the portable palaces of the Bedouin. The Al Maha Desert Resort in the Dubai Desert Conservation Reserve offers falconry, camel rides and archery. Eco-friendly but also tasteful, the Adrere Amellal in Siwa, Egypt, is built from mud and saltwater; palm trunks are offered up as furniture and the pool is sourced by Roman springs and shaded by olive trees. The 27 rooms offer views of the Great Sand Sea and Lake Siwa, the site of the Temple of Oracle. It is an enclave rich with the same natural phenomena and mystical associations that inspired the poet Pindar, the Persian king Cambyses and Cleopatra to journey there. More organic hotels are planned--Dubai developer Crescent is building a 220-suite submarine hotel, literally 20 feet below sea level, projected to be completed in early 2009.

Even the region's prices are somewhat old-world; room rates average $143. But while living like a sultan is affordable now, regional occupancy rates average 70 percent and prices are projected to climb 16 percent this year.

Still a deal considering Cirigan Palace's ancient visitors reputedly paid for their stay in blood.