Shares in Action Hotels (LON:AHCG) took a serious hit on Thursday, falling over 12 percent as delayed hotel openings disappoint investors.

The company reported revenue in-line with expectations, up around 22 percent to approximately $53.1 million. Adjusted EBITDA increased by 16 percent to approximately $18.5 million, with the value of Action Hotels’ hotel assets increasing by 15 percent to $458 million.

However, the group said had unexpected delays on new hotel openings, saying:

“As is typical in many development companies, Action Hotels experienced some unforeseen delays in opening dates of some of its new hotels and this has negatively impacted revenue resulting in a level that is materially below market expectations.”

It also added that due to the company being in an accelerated growth and development phase, an “overall net loss before tax position is expected as a result of the impact of pre-opening costs of the new hotels, finance costs and depreciation and amortisation.”

Whilst trading in the first quarter of 2017 remained solid, with total revenue up around 14 percent, the company remains “mindful of adverse pressure on the hotel sector across the Middle East”.

Alain Debare, Action Hotels CEO said:

“We are pleased to update the market on our performance which has been robust across the Action Hotels portfolio. We remain focused on driving performance at our operating hotels and our growth reflects the strong contribution from our mature hotel portfolio, as well as the encouraging success of our newest hotels as they gain traction in their respective markets. We have a good pipeline of hotels in development and are on track to complete an additional three hotels this year.”

Investors appeared not to be reassured by the group’s statement, with shares falling 11.96 percent to 40.50 (0933GMT).