Dubai: The Gulf's hotel investment and earning calculations have changed as projects are taking longer to develop due to the unending construction spree in the region, a hotelier said.
"Construction delays are becoming more common now. Investors are cautious about escalating costs of construction and expenses on labour and senior executive resources," said Christopher Hartley, chief executive of Shaza Hotels.
He said earlier a period of 24 months was enough to have a new hotel under operation.
But investors are compensated by revenue growth from higher occupancy levels in the region's expanding tourism sector.
"I do not see softening of demand for hotels," Hartley said.
A real estate consultancy said in a recent report that 30 hotels have been delayed in Dubai in 2007 because of construction problems.
Shaza, a joint venture between Kempinski Hotels and private equity firm Guidance Financial Group, hopes to have three hotels in Dubai by 2010, with the first property planned to open on Shaikh Zayed Road in 2009.
An alcohol-free luxury hotel concept, the brand has received seven firm investor commitments since its launch last year. Four hotels are expected to open in Cairo, Bahrain, Marrakesh and Jeddah around 2010.
Interest in the Shaza brand, which follows Islamic principles in design and development, has come from several places outside the Middle East.
Bosnian capital Sarajevo and Konya in Turkey are among potential sites, Hartley said.
