by As dusk fell over the verdant grounds of the Marriott Mena House hotel, the reflection of the Great Pyramid of Giza grew darker in a pool built to represent the last of the seven wonders of the world.
A smooth jazz band of the Eagles’ Hotel California played on the grass lawns as guests gathered for dinner, and the staff tried to convey a sense of business as usual, despite the hotel being acquired most recently by a famous Egyptian real estate tycoon, Hisham. Talaat Moustafa, and two powerful Emirati conglomerates.
The sale of Mena House and six other historic hotels – financed by the Emirates – is part of what Timothy E Kaldas, an analyst of the struggling and often opaque economy, has called a “big fire sale” of state assets. say the government. cash injections and diving deeper into debt.
Moustafa is Egypt’s biggest real estate developer, whose business empire has seen a rebirth since his release from prison in 2017, after President Abdel Fatah al-Sisi pardoned him on a murder conviction. Its portfolio of properties across Egypt’s new capital, the crown jewel of Sisi’s major projects, includes its hospitality arm, Icon, which owns several luxury hotels in Cairo.
His Talaat Moustafa Group (TMG) now owns seven heritage hotels across Egypt, including Mena House. This includes others that serve as monuments to Egypt’s recent history, including the Sofitel Winter Palace in Luxor, the Old Cataract in Aswan and the Steigenberger Cecil on the coast of Alexandria. International hotel chains continue to run the hotels, but Icon bought a majority stake in the Egyptian government company that owns them.
Egypt’s prime minister, Mostafa Madbouly, celebrated the $800m sale to Moustafa, who praised the acquisition for bringing in foreign currency. He added that the sale was financed by a “known international strategic investor”.
A week later, the mystery buyers were revealed as Abu Dhabi Development Holding Company (ADQ), a sovereign wealth fund based in the Emirati capital together with its subsidiary Abu Dhabi National Exhibition Company (Adnec Group), owners of the ExCel center in London. .
No piece of land or modern history is considered off limits in the Egyptian government’s desperate efforts to raise money. Emirati investors have snapped up Egyptian properties and companies in recent years, including the $200m sale of Egypt’s infamous government building in Cairo’s Tahrir square. An Emirati consortium is said to be in talks over a $22bn deal to acquire land on Egypt’s north coast, which Bloomberg reported also involved TMG.
The sale of huge tracts of land and historic hotels is part of Cairo’s efforts to deal with mounting debt. Sisi’s rule has a particularly large economic role for those close to his regime, especially Moustafa, and his citizens are suffering amid austerity measures and rising inflation. Egypt is the second largest debtor to the International Monetary Fund after Argentina, and is currently in talks to increase its lending program.
“This is clearly a country that sells public assets under duress,” said Kaldas, an analyst with the Tahrir Institute for Middle East Policy. “Egypt’s finances are in a completely unsustainable state.”
Mena House was built as a royal hunting lodge before being converted into a hotel in 1887, featuring a cocktail bar and dining room with a stunning view of the pyramids. Its historic wing is filled with opulent rooms including a suite where Winston Churchill stayed during the 1943 Cairo conference, and an exact replica of the bedroom of Egyptian diva Uum Kalthoum.
The marble floors, mirrored lobby and vaulted ceilings welcomed guests on previous visits that demonstrated Egypt’s diplomatic prowess, when the hotel hosted peace talks between Egyptian president Anwar Sadat and representatives from Israel in one of its banquet rooms.
Luis Monreal, general manager of the Geneva-based Aga Khan Cultural Trust, and a long-time visitor to Mena House, said he hoped the new owners realized that Egypt’s historic hotels have more than just financial value. “They are part of Egypt’s history, tourism that helped integrate Egypt into the wider world,” he said.
A spokesman for TMG declined to comment on the hotel sales.
Moustafa was convicted in 2009 of paying $2m to a former police officer to kill Lebanese singer Suzanne Tamim, and cut her throat in her Dubai apartment.
That Moustafa, a member of the Egyptian elite who was traditionally considered above the law, faced his trial in Cairo at all can be seen as evidence of the anger of the Emirates that the murder took place on the soil, because Egypt has not extradited its citizens.
The trial shocked the Egyptian public in a rare moment of failure for the country’s super-rich, and the murder plot later inspired the film. The Nile Hilton Incident, it was never shown in Egyptian cinemas under government censorship. Moustafa has defended his innocence from prison, saying in a widely publicized letter that the charges against him were false.
“These lies will not be able to move the great pyramids I built in the Egyptian economy,” he wrote.
Although his words drew alarm at the time they were prophetic in the end. After a retrial in which he was sentenced to 15 years in prison, Moustafa served half that time before being pardoned by Sisi, and his previous conviction was little obstacle to his new role as a broker for Emirati cash injections into the economy. Egypt.
ADQ and Adnec spokespeople did not respond to requests for comment on the deal, or the significance of Emirati wealth funds choosing to do business with Moustafa now.
Hotel chains Sofitel and Steigenberger also declined to comment. A spokesman for the Marriott hotel chain that operates the Mena House stressed that everything was as usual. “The transaction does not affect day-to-day business or our employees,” they said.
Kaldas pointed out that the sale of hotels will ultimately be counter-productive in the state’s fundraising efforts, as the much-needed foreign currency brought in by hotels will now flow elsewhere.
“The Egyptian state received an injection of $800m, which is great in summary, but it is permanently losing income from these assets. This is plaster, all he is doing is putting money on fire for an unsustainable economic model, a model that is thwarted by fostering an insurmountable patronage network at the expense of the public good,” he said.
“This will not stabilize the economy, it will only start the counter down the road – $30bn is going to Egypt next year,” he said.
A reporter in Cairo contributed to this story.
