As dusk fell over the green grounds of the Marriott Mena House hotel, the reflection of the Great Pyramid of Giza darkened in a pool built to reflect the last of the Seven Wonders of the World.
A band played a smooth jazz version of the Eagles’ Hotel California on the lawns as guests gathered for dinner, while staff tried to convey a sense of business as usual despite the hotel’s recent takeover by a notorious Egyptian real estate magnate, 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 Egypt’s struggling and often opaque economy, called “a disappointing sale” of state assets that the government has called for shouts. cash injections as they dive deeper into debt.
Moustafa is Egypt’s largest real estate developer, whose business empire has witnessed a rebirth since his release from prison in 2017 after President Abdel Fatah al-Sisi pardoned him for a murder conviction. His portfolio includes properties in Egypt’s new capital, the crown jewel of Sisi’s mega-projects, in addition to his hospitality arm, Icon, which owns several luxury hotels in Cairo.
His Talaat Moustafa Group (TMG) has now acquired seven heritage hotels in Egypt, including Mena House. This includes others that serve as monuments to Egypt’s recent past, 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 operate the hotels, but Icon bought a majority stake in the Egyptian government company that owned the hotels.
Egyptian Prime Minister Mostafa Madbouly celebrated the $800 million sale to Moustafa, who praised the takeover for bringing in foreign currency. He added that the sale was financed by “a well-known international strategic investor.”
Weeks later, the mystery buyers were revealed as the Abu Dhabi Developmental Holding Company (ADQ), a sovereign wealth fund based in the Emirati capital, along with its subsidiary the Abu Dhabi National Exhibitions 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 been snapping up Egyptian properties and businesses in recent years, including the $200 million sale of a notorious Egyptian government building in Cairo’s Tahrir Square. An Emirati consortium is reportedly in talks for a $22 billion deal to acquire land on Egypt’s northern coast, with TMG also involved, according to Bloomberg.
The sale of vast tracts of land and historic hotels is part of Cairo’s efforts to cope with its growing debt mountain. Sisi’s rule has been characterized by an outsized economic role for those close to his regime, especially Moustafa, while his citizens suffer from sharp austerity measures and rising inflation. Egypt is now the International Monetary Fund’s second-largest debtor after Argentina and is in talks to expand its lending program.
“This is clearly a country that is forcibly selling off public assets,” said Kaldas, an analyst at the Tahrir Institute for Middle East Policy. “Egypt’s finances are in a completely unsustainable position.”
Mena House was built as a royal hunting lodge before being converted into a hotel in 1887. It features a cocktail bar and a dining room with beautiful views of the pyramids. The historic wing is filled with opulent suites, including a room 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 for visits that showcased the former might of Egyptian diplomacy, as the hotel hosted peace talks between Egyptian President Anwar Sadat and representatives of Israel in one of the banquet rooms.
Luis Monreal, the general manager of the Geneva-based Aga Khan Trust for Culture, and a longtime visitor to Mena House, said he hoped the new owners understood that Egypt’s historic hotels have a value beyond just the financial value. “They are part of Egypt’s history, tourism that has contributed to Egypt’s integration into the wider world,” he said.
A TMG spokesperson declined to comment on the hotel sales.
Moustafa was convicted in 2009 of paying a former police officer $2 million to kill Lebanese singer Suzanne Tamim while slitting her throat in her Dubai apartment.
That Moustafa, a member of Egypt’s traditionally above-the-law elite, was put on trial in Cairo at all was seen as evidence of Emiratis anger that the killing took place on their territory, as Egypt does not extradite its citizens.
The trial shocked Egyptian audiences in a rare moment of downfall for the country’s super-rich, while the murder plot later inspired the film. The Nile Hilton Incident, never shown in Egyptian cinemas under extensive government censorship. Moustafa defended his innocence from prison and stated in a widely publicized letter that the charges against him were false.
“These lies will not move the great pyramids I have built in the Egyptian economy,” he wrote.
Although his words provoked scorn at the time, they ultimately proved prophetic. After a retrial in which he was sentenced to 15 years in prison, Moustafa served half of that time before being pardoned by Sisi, and his previous conviction appeared to be little impediment to his new role as a broker for cash injections into the Egyptian economy.
Spokespeople for ADQ and Adnec did not respond to requests for comment on the deal, or on the significance of the Emirati wealth funds now choosing to do business with Moustafa.
Both the Sofitel and Steigenberger hotel chains declined to comment. A spokesperson for the Marriott hotel chain that operates Mena House insisted everything was ‘business as usual’. “The transaction has no impact on day-to-day operations or our employees,” they said.
Kaldas pointed out that selling off hotels will ultimately prove counterproductive in the state’s fundraising efforts because the much-needed foreign currency that hotels bring in will now flow elsewhere.
“The Egyptian state received an injection of $800 million, which at first glance is great news, but the state is losing income from these assets forever. This is a band-aid, all it does is fuel an unsustainable economic model, a model hampered by maintaining an insatiable patronage network at the expense of the public interest,” he said.
“This will not stabilize the economy, it will only stir things up: Egypt owes $30 billion in the coming year,” he said.
A reporter in Cairo contributed to this story.