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Adel Hana  /  AP
The eight-story Arcmed Al Mashtal hotel is an anomaly in Gaza, where most local people live in poverty and ride donkey-driven carts.
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updated 8/6/2011 10:07:32 AM ET 2011-08-06T14:07:32

The Gaza Strip's first five-star hotel gleams with marble floors, five luxury restaurants and a breezy cafe overlooking the territory's white sandy beaches and sparkling blue Mediterranean Sea. The only thing missing are guests.

Nearly all of the newly opened hotel's 222 rooms, decked out with ornate metal-worked lamps, flat screen televisions, oversized beds and sea views, sit empty. The tourists whom the developers expected to flood to Gaza when they launched the project 13 years ago are nowhere to be seen. Local residents, most of them living in poverty, can only dream of staying in the gleaming complex.

The eight-story structure is an anomaly in Gaza, yet it cannot escape its surroundings. Residents riding donkey-driven carts occasionally trot by. Women cannot swim in the pool, in a nod to conservative Gaza tradition. There is no alcohol — banned by Hamas in line with Islamic law. On a recent day, two women in conservative Islamic headscarves and loose gowns sipped drinks by the pool, as children splashed inside.

Earlier this month, the hotel's developer, Palestinian investment company Padico decided to finally open it. The company, controlled by politically independent billionaire Munib al-Masri, hopes to recover at least some of its costs and hopes that Gaza's knotty problems may finally be solved in the coming years.

"Its risky — but we need to have a change in Gaza," said public relations manager Shadi Agha.

For now, the risk is not paying off. There are no foreign tourists in Gaza, just a handful of Western aid officials who pass through.

Only 80 rooms are even available. Management doesn't want to spend on maintenance for the remaining rooms, Agha said. Early this month, there were just 10 guests in the entire hotel, though the royal suite, at $880 a night, was occupied.

The guests ranged from international aid officials to a honeymooning Gaza couple who wanted to go somewhere nice, Agha said. He wouldn't identify them further or say who was in the royal suite.

The tale of the $47 million Al-Mashtal has mirrored the plight of the Gaza Strip over the past decade.

Padico began construction of the hotel in 1998, a time when Gaza was awash with optimism. The Palestinians had signed interim peace agreements with Israel, and a final deal to end decades of conflict appeared to be in reach. Tourists would pour in.

But the area had collapsed into violence by 2001. Despite fierce fighting with Israel, the hotel's shell was in place by 2006. But it was badly damaged during a brief civil war the following year as Hamas battled the rival Fatah faction and seized control of Gaza. Palestinian militants smashed some 180 windows during the fighting, Agha said.

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The fighting left the Palestinians split between two governments — Hamas in Gaza, and the Fatah-dominated Palestinian Authority in control of the West Bank. The two territories flank either side of Israel, and Palestinians want them to build their future state.

Seeking to contain Hamas, Israel and Egypt imposed a blockade that prevented raw materials and limited most commercial goods from entering Gaza. Although the West Bank-based Padico does not have relations to the militant group, the company was unable to bring in key materials.

The building suffered further damage when Israel launched its three-week offensive against Hamas in December 2008. At one point, two Israeli missiles slammed into the hotel.

The hotel was repaired, but it couldn't be opened still, because the managers needed to make the final touches, like the gym equipment. Israel's blockade prevented those materials from entering.

Under heavy international pressure, Israel eased the blockade in May last year following a deadly naval raid that killed nine international activists trying to sail to Gaza. The hotel was finally completed and opened in late July — years behind schedule.

A Padico official, speaking on condition of anonymity under company orders, said he expected the hotel to operate for a couple of years, to test its fortunes. The hotel's ultimate fate will depend on the fate of Gaza.

"We've done our homework. We are leaving the rest for politicians and militants to decide," he said.

___

With additional reporting by Rizek Abdul Jawad in Gaza City.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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