Africa hotel market Q4 2019: Why investors are going at it alone
The last decade and a preference for control have shifted the focus among hotel investors targeting Africa away from local development partners. "After a strong period of hotel development, hotel investors are more seasoned and they are implementing new investment strategies," explains Xander Nijnens, executive vice president of JLL Hotels & Hospitality Group in sub-Saharan Africa.
“With an increase in experience, we are seeing regional and international investors opt for full control over their assets and they are moving away from the kind of partnering-up approach we saw earlier in the decade when the market was more nascent. Doing so increases control and exit option, as well as easing decision-making.”
Finding a model that works
Development rather than acquisition is still the main route into the sector among hotel investors and up-and-coming African chains, according to a sentiment survey carried out by JLL. The global hotel operators with an appetite for Africa have greatly improved their development support, and the design and construction sector has seen a lot of maturation, with strong local and regional options now available.
Radisson is rolling out quickly as it aims for more than 130 hotels and 23,000 rooms across Africa by 2022. Hilton now has 100 hotels trading or under development in the region, while regional operators such as Azalai, Onomo and Mangalis are expanding with their own capital.
“The big brands are increasing their value add by relooking at how they support development, improve operations and localise distribution channels,” Nijnens says. “Large technical service teams and support offices are now in place at the African arms of most major global hotel brands.”
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