When and where will the first Shaza hotel open?
Realistically the first hotel will open by the end of next year in Dubai.
However Dubai’s construction delays and building costs (which have escalated by about 30 per cent since we first started our projects about three years ago) have led to changes.
We are actually buying a hotel in central downtown Marrakech which we will knock down and rebuild, something we hadn’t anticipated doing. We originally planned to buy land, a shopping mall and a hotel there but that became complex. We realised that Marrakech was a market we wanted to get into as soon as possible as there too prices were going up. So this could actually be the first Shaza hotel to open.
There are a few things that have changed in ways we didn’t quite expect. Identifying the land to buy and the hotels to build proved more complex than we anticipated. Dubai for example became a lot more clustered as a market and therefore the first projects have moved further away from the core GCC region.
We didn’t expect interest outside of the ME but we have been approached for a number of opportunities in markets such as Geneva, where we are currently negotiating a hotel there on the same concept of knock down and rebuild; Istanbul, Kuala Lumpur, Sarajevo – places where there is natural traffic for a Shaza type hotel.
So the market in which we are likely to be opening our first hotels is different to what we originally anticipated, but I think it all augers well. We would have demonstrated the ability for this brand to be very international and not just a regional brand.
How many hotels are you building?
A total of 30 is our goal within our eight year fund life. We will build about 10 ourselves as operators and we hope to attract 20 third parties to build hotels which we would then operate on their behalf.
Why will Shaza be successful in the region?
There is no other product on the market today that will be offering what we will. Firstly, we have what the Middle Eastern traveller is looking for – there is the security factor, the family factor, shopping, good locations in corporate destinations and the fact that Shaza reflects their lifestyle and culture. Although other brands are Sharia compliant there is nothing else apart from not serving alcohol that is going to be as attractive to the ME traveller.
What we will achieve is extreme product consistency across the brand and ultimately that is what is going to make any brand successful.
What has been the feedback from the industry?
Whenever anyone starts a new concept there is some skepticism. We still have a lot to prove to those doubters that they are wrong but one thing we have demonstrated is that the business community believes in it – we got the funding mostly from GCC countries.
How are you demonstrating eco friendliness?
We have a huge advantage here as every hotel we build can be designed to the latest ecologically friendly building standards. However, let’s not overcook the goose. Let’s make sure we are adhering to all the major environmental standards that we can feasibly do, so are aiming for a LEED (Leadership in Energy and Environmental Design green building rating system) silver which is achievable in all products.
Your biggest concerns in the Middle East?
Contruction delays and the cost of materials for building our hotels, and in Dubai, we have labour related problems. In a concept like Shaza we need to be very selective in choosing staff, who must be culturally aware, and speak a language our guests are familiar with – they will have to have a skills set other Western brands won’t necessarily require. That is definitely going to be a challenge for us.
Infrastructure in Dubai specifically but also in the broader Middle East region is an issue; one of the risks is that a lot of investment has been made in all fields – well and good – but what if the infrastructure doesn’t meet those needs?
Another problem is that of inflation, linked to any dynamic economy, but obviously the cost of everything from labour to real estate soars, and all is a vicious circle. The risk spreads to the broader GCC region too.