Luxury Hotels Tap into Conflict-Zone Market

Jun 15, 12 | 12:07 am

By Hasnain Kazim

In places where hardly a tourist would dare to venture, the Serena Hotel chain offers its guests soft beds, fresh fruit and high security. But surrounded by barbed wire and concrete walls, is this war-zone luxury niche viable?

The hotel guest is relieved when the receptionist accepts his credit card with a smile. "Thank God," he says. "A few years ago, I couldn't pay with a card. No credit card companies had branches in Afghanistan! I'm relieved that I don't have to drive out to get cash." A journey through Kabul is not without "potentially fatal risks," he adds. But now all that can be avoided.

Not much else has changed since 2005, when the five-star Serena Hotel opened its doors in the center of Kabul. Enclosed by towering concrete walls and barbed wire, the sand-colored building is surrounded by lush green lawns and manicured flower beds — a haven of luxury amid chaos. Snipers patrol the roofs, and entry, strictly controlled, is subject to numerous security checks. Guest are patted down, while their baggage is scanned twice and sniffed for explosives by large dogs.

Stickers with guns crossed out in bright red circles are all around the hotel, but it is still patrolled by young gunmen with their hair slicked back and pistols poking out from under their suit jackets.

This niche market of luxury hotels in war zones is dominated by the Serena chain. Founded in the 1970s, Serena operates 36 five-star hotels across Africa and Asia. Their branch in the Pakistani capital of Islamabad is their "flagship" model. A fortress on the top of a hill, it operates under the same tight security measures as its Afghan counterpart. Other Serena destinations include Kigali in Rwanda, Kampala in Uganda, and their latest venture, the Serena in Dushanbe, Tajikistan.

An Expensive Endeavor

The Serena chain is expanding. New hotels are being planned for Damascus and Aleppo in Syria, and Herat and Mazar-i-Sharif in Afghanistan. "One day, it will be possible to travel in Afghanistan again," says an optimistic staff member at the Serena Kabul. "When that happens, we want to be the first to offer tourists the possibility of a first-class stay." An Afghan travel company is already said to be preparing travel itineraries in anticipation.

But the Kabul business is barely profitable. When the former Hotel Kabul was renovated to become the five-star Serena, the project cost over $30 million. Now it is seldom more than half-full. The majority of clients — businessmen, diplomats, aid workers, consultants, journalists, and important dignitaries — are returning customers. It's rare for them to pay the full price of $356 per night. They usually get the rooms for a third of the asking price.

It wasn't just the construction that was expensive, though. The day-to-day costs of running the hotel add up too. The huge security bill is compounded by importing products that aren't available in Kabul, mainly food. Even the soap is imported. Alcohol, which is forbidden in strictly Islamic Afghanistan, is not available to guests in the Serena Kabul. Clients in the Serena in Islamabad are allowed to enjoy alcohol in their rooms -- but only if they're not Muslim.

There's more… Continue reading the full article "Luxury Hotels Tap into Conflict-Zone Market" including a photo slideshow on the Spiegel Online website.