HOTEL construction has become a growth industry in Jordan with investors confident that the Middle East peace process will boost tourist numbers. Tourism Ministry statistics show there are 23 new hotels under construction in the country. Another half dozen are undergoing a major refit or expansion, while about a dozen are on the drawing board. Conservative estimates suggest that about $450 million is now being invested in new hotel projects.
The prospect of such business is now attracting leading international contractors, architects and hotel chains to a market that, apart from a surge of building in the tourist centre of Petra, had been dormant for a decade.
When Zara Investment invited international contractors to prequalify for its Amman Grand Hyatt and Zara Trade Centre project, it received 42 applications. Al Dawliyeh for Industrial Trading and Touristic Projects’ Sheraton Hotel attracted about 50 potential prequalifiers and Al Sharq Investment’s Holiday Inn some 35 applications.
Zara has now drawn up a short list of 12 international contractors, all in joint venture with locals, with offers for the Hyatt due by 6 July. The ambitious scheme includes construction of a five-star 313-room hotel, which will be linked by a tunnel to the Zara Trade Centre, comprising a 17-storey building containing offices and retail outlets.
Zara Investment is currently the largest player in the field with four new hotels, with a total estimated value of $180 million, underway or planned. Its $18.5 million, fourstar Movenpick in Petra is expected to be opened in late April. Tendering for its Aqaba Bridge project, also to be managed by Movenpick, is planned for mid-1996. The project will be in two sections, with work on its beach side apartments to start first and the hotel to follow. The two elements will be connected by a bridge containing a swimming pool and shopping centre. Progress on a fourth project, a Dead Sea Movenpick, is awaiting the settlement of terms on the leasing of land from the government.
The Arab European Company for Tourism and Hotel Management, a joint venture between local contractor Zeyad Salah and France’s ACCOR Devimco, is also working on four hotel projects at Aqaba, Petra, Amman and the Dead Sea. The scale of their investment is more modest, at an estimated $50 million for the four, but the projects have brought another major international hotel group to the country.
The third heavy investor at the top end of the market is Al-Dawliyeh for Industrial, Trading & Touristic Projects, whose subsidiary, Al-Dawliyeh for Hotels & Malls, has already started work on its five-star 300room Sheraton hotel in Amman, designed by the UK’s RTKL. The group is now in the process of establishing a secondary subsidiary, Al Dawliyeh for the Union of Hotels, which will take over construction of a four-star Hilton Hotel in Amman for which designs have already been completed. Work on the hotel is expected to begin by April.
Al-Dawliyeh deputy general manager Mohammad Jaber says he expects to see solid foreign contractor interest in both the Sheraton and Hilton hotels, although the threestar hotel is likely to be of more interest to local companies. Foreign interest so far seems to be on a project-byproject basis, although the UK’s Higgs & Hill has taken a longer-term position, forming a joint venture, Ammoun Higgs & Hill, with the local Ammoun Maintenance and Contracting. Ammoun Maintenance general manager Elias Baddour sees hotel building as the quickest prospect for new work in Jordan. ‘Investors are depressed at present,’ he says, ‘but they won’t stop planning.’
Upgrading existing facilities
Jordan’s leading hotels are also undergoing extensive refurbishment. Jordan Intercontinental in Amman is spending $20 million to add 120 rooms, meeting facilities, a health club and car park to its existing facilities. The Marriott Hotel in Amman is spending an estimated $14-7 million to refurbish existing facilities, build a new conference centre and construct a 100-room extension. A number of four-star hotels in Amman, including the Middle East, the Ambassador and the Grand Palace, are also going ahead with substantial refurbishment.
Most other new hotels already under construction are small three-star ventures, but there are projects on the drawing board which are certain to attract further international attention. These include two Aqaba ventures: a $60 million venture between Pointe International of the US and the local ARAM International investments for a 450room resort and 36-hole golf course and a Club Mediterranee resort now under negotiation with Century Investments Group.
A mid-1995 call by the Jordan Valley Authority (JVA) for applications to develop the Dead Sea brought more than 60 expressions of interest. The Tourism Ministry has indicated that 23 development areas have been identified, with 3,200 beds to be provided by 2000 in the first phase of a two-stage programme.
So far, the JVA has started negotiations for just four hotels. However, its requirement that investors put up five years rent in advance and finance the infrastructure for hotels has slowed progress even on these. Development in Aqaba is also just beginning. Zoning for new tourist development areas has been completed and contracts have already been let for infrastructure design. Once the JVA and the Aqaba Region Authority take the plunge and give more companies the goahead, the boom in Amman is set to spread to other parts of the country.