Hotel groups target Syria

Several global and regional hotel groups are looking to enter or expand in Syria, senior executives told Reuters, betting that its rich history and coastal destinations will attract overseas tourists as well as Syrians who have long lived abroad.

Although Syria's devastating civil war, which left cities and archaeological treasures in ruins, ended almost two years ago, major challenges remain in drawing tourists back to the Middle East country, which still experiences bouts of violence.

While the US removed Syria in August from its list of state sponsors of terrorism, which had deterred investors, the State Department still advises US citizens not to travel there.

Nevertheless, international flights and tourists began to return last year. Syrian state news agency SANA, citing government data, reported that tourist numbers more than doubled year-on-year in the first half of 2026 to 3.52 million.

"Tourists will always be there because this (Damascus) is the oldest city in the world," said Mohamed Alabbar, founder and chairman of UAE-based Eagle Hills, which is among companies including France's Accor examining opportunities.

Many Syrians who live abroad want to return, added Alabbar, who also chairs Dubai's Burj Khalifa developer Emaar.

Of the tourist total for the first half of this year, 2.13 million were Syrian expatriates, around 660,000 from Arab countries and about 720,000 from other countries, SANA reported.

Ahmed al-Sharaa, the former al-Qaeda commander who is now Syria's president, has worked to improve ties with the West and attract billions in funds to rebuild the country, including from Gulf countries.

Eagle Hills, which is planning a 10 million square metre development in Damascus and a 4.3 million square metre project in coastal Latakia, signed a framework deal for the two projects with Syria on Monday, without disclosing financial details.

Alabbar said that Emaar, which is working on a separate Damascus development, could also participate in the two projects which were worth billions of dollars in total.

Meanwhile, UAE developer Arada has also said it plans to enter the country with a $7 billion project.

'MAJOR POTENTIAL'

Western groups are also actively examining opportunities in Syria, which is getting better connected with flights from Gulf hubs, including services from Qatar Airways and flydubai.

Abu Dhabi's Etihad Airways could add more destinations depending on local support and customers' appetite, its CEO Antonoaldo Neves said last month.

Etihad said on Wednesday it would operate a daily service to Damascus, increasing from four to seven flights a week.

Accor is in advanced negotiations for two projects, its Middle East, Africa & Asia-Pacific CEO Duncan O'Rourke told Reuters, while US firm Wyndham Hotels & Resorts is also scouting in Damascus and beach destinations.

"Very soon, I'm confident that we're going to announce our first signing in Syria," Wyndham's EMEA President Dimitris Manikis told Reuters.

Minor Hotels' Middle East and Africa COO Amir Golbarg said some buildings in old Damascus could be converted to boutique hotels, while projects could also be built from scratch.

"The history, the crossroads, for me it's one of the countries that really has major potential," Golbarg said.

While a handful of traditional homes in the capital have been operating as local boutique hotels for decades, some local communities in the suburbs have protested against some of the mega-projects announced by the government.

There are other hurdles to tourism too.

Although Visa and Mastercard said last month they were launching operations in Syria, electronic payments are so far limited to certain cards issued by foreign banks and are available only at specific locations.

And the country also faces the challenge of rebuilding or updating its infrastructure, including its hotels.

The World Bank said last year that its conservative best estimate for reconstruction costs in Syria stood at $216 billion, including $75 billion for residential buildings and $59 billion for non-residential structures.

"The challenge with the market, it's been basically off the grid for many years. So the (hotel) inventory that's existing is very tired," said Golbarg.