CAIRO: The banks of the Nile River will be home to Cairo’s first Ritz-Carlton Hotel after the capital’s storied Nile Hilton undergoes a LE 350 million ($63.6 million) renovation beginning next month.
The Ritz-Carlton Hotel Company sealed Wednesday a 20-year contract with Misr Hotels Company – the holding company for the Nile Hilton and the entity that will finance the renovation s project.
We ve always lusted after a hotel in Cairo, said Simon Cooper, Ritz-Carlton’s president and chief operating officer, Cairo has always been the jewel that was missing in our crown.
Under the terms of the contract, Misr Hotels will undertake the renovation of the 50-year-old Nile Hilton to comply with Ritz standards. In turn, Ritz -Carlton will only collect its 8 percent share of the gross operating profits once a $29 million per year target has been reached.
“We carefully considered offers from many global management companies proposing to add this hotel to their collection of luxury properties, Fathi Nour, Misr Hotels chairman and managing director, said.
“Ultimately, the offer by the Ritz-Carlton, a company with a reputation for service excellence and award-winning corporate culture, was retained to restore and manage this iconic property, he added.
The Ritz-Carlton was chosen from nine companies that submitted tender offers to run the property, managed by Hilton Hotels since it was inaugurated in 1958 by Egypt s then-President Gamal Abdel Nasser and his Yugoslav counterpart Josip Broz Tito.
“Nile Hilton chose us, Cooper boasted. “It was a combination of what our brand can bring to Cairo. Prime Minister Ahmed Nazif’s ‘Cairo needs the Ritz and the Ritz needs Cairo’ is the best quote that describes it.
Hilton s contract will expire at the end of the year, after which the Corniche will put on the Ritz trademark. The renovation – scheduled to begin on Jan. 1 – marks a new beginning for a landmark hotel whose panoramic views of the river and its bustling downtown location alongside the Egyptian Museum have for decades made it a favorite for tourists and Egyptians alike.
The renovation of the 431-room hotel will take about 18 to 24 months, with guest facilities shutting down in mid 2009. It will include construction of a new 1,000-seat conference center, underground parking for about 500 cars, and upgrades to the rooms and suites. The hotel will be re-branded The Nile Hotel on Jan. 1.
The Nile Hotel debuts the Ritz-Carlton’s presence in Cairo. The internationally renowned company’s first property in Egypt was in the Red Sea resort of Sharm El Sheikh.
“It is not about the number of hotels but individual opportunities that we get,’ Cooper said.
“We’ve been waiting for the longest time.for a hotel in Cairo, added Vivienne Gan, regional director of public relations at the Ritz-Carlton. “We wait for the right location and the right partners.
Wednesday’s contract is made at a time when the global economic crisis is eliciting consumers to tighten spending in a blow to the global tourism industry. But Cooper sees an opportunity is striking such a deal amid the current crisis.
“If you believe that 2009 will be [hit] the worst and things will get better after that, then time will be impeccable to renovate hotels when construction costs are [sliding] and labor force is more available, he explained.
“If the worst will happen in 2009/10, then our timing will prove impeccable because we’ll be opening the hotel when a recovery has already begun.
“Egypt is a leisure travel destination, and therefore [we believe] it will not be impacted by the global slowdown, Gan said. “A recent survey shows that hotels impacted are corporate hotels that rely on business and conference travel but not holiday hotels.
Despite the global economic slowdown, she added, the Middle East is the only region that is booming. “We’ve signed four contracts this year: two in Abu Dhabi, one in Dubai, and this one in Cairo.
Cooper sees strong potential in Egypt’s hospitality industry based on the country’s robust tourism. ‘The great thing about Egypt is that it has both cultural tourism and vacation tourism. This is irreplaceable tourism. No one else has that, he said.
“Besides, Egypt’s proximity to markets in Europe.makes it extremely well-placed.
The Ritz-Carlton Hotel Company currently operates 72 hotels in the Americas, Europe, Asia, the Middle East, Africa, and the Caribbean. More than 30 hotel and residential projects are currently under development around the globe.
The company plans to sign another contract for a hotel in Dubai and is eyeing further opportunities in other travel destinations in the region, including Beirut.