Discover why so many international hoteliers are investing in Africa
“African leaders striving to develop their economies without relying on resources are turning to tourism, and international hoteliers from Wyndham and Marriott to Hilton, Rezidor and AccorHotels are not only getting in on the action, but picking up their pace of investment.”
Arabian Business is the Middle East’s leading business publication and in a 3,000-word analysis of the continent’s hotel and hospitality sector in concludes: “Africa is a place to be, it is only a matter of where, not if.”
Top business reporter Courtney Trenwith interviewed key business figures from around the world about their hotel programmes over the coming decade for her report ‘Checking into Africa’s hospitality revolution’.
She wrote: ‘With population growing by 30 million people each year, and projected to increase to 40 million per year by 2050, plus rapidly increasing income levels, hoteliers are announcing multiple new properties at a time.’
As part of the Hilton Worldwide told Arabian Business that it will double its presence on the continent to more than 80 hotels in less than five years. In October Hilton WW announced it would manage a 255-key hotel in Kenya’s capital, Nairobi, in what would be the tallest development in Africa. It also plans to operate what will likely be the most extravagant airport hotel on the continent, in Lagos, Nigeria.
France-based AccorHotels is opening 50 new hotels in Angola in partnership with local firm AAA Activos Lda. The 6,200 rooms will span economy to luxury and gradually open by 2017, despite the country’s commodity bust.
“Its mammoth investment in the southern African state is on top of existing properties across 15 African countries,” said the Arabian Business report.
Chief operating officer for Africa, Antoine Guego said three of Accor’s Novotel and ibis hotels in Africa are among the brands’ best performers across a region spanning southern Europe, the Middle East and Africa.
The Arabian Business report said: “The company believes so strongly in the continent’s profitability it is not only managing hotels but buying into them, and there are plans to invest in 18 key cities over the next five years. They include Johannesburg, Cape Town, Nairobi, Abuja, Abidjan and Dakar.”
Guego told the publication: “Africa is definitely the continent of opportunity for the 21st century. We have an ambition to reach 200 hotels by 2020. We have 106 under operation, it will be 110 by the end of the year.”
Marriott International in 2013 it bought South Africa’s largest hotelier, Protea, with 23,000 rooms in 138 hotels from Morocco to South Africa. The move took it from 13th largest hotel company on the continent (with only 10 hotels) to number one.
“We did it in part because we had nothing in Sub-Saharan Africa and we view this part of the world as being an enormous long-term growth opportunity,” Marriott International CEO Arne Sorenson told delegates at the Africa Hotels Investment Forum (AHIF) in Kigali in early October, according to the report.
Africa analyst Lars Christensen told Arabian Business: “Foreign investors are largely unaware of the potential in Africa.”
Christensen says contrary to the media reports, investors look beyond political risks. “I’m much more worried about politics in the US and Europe than in Africa.”
Xander Nijnens, from consultants JLL, says the difficulty in developing scale in Africa can deter international investors, especially smaller players.
Read the full report: ‘Checking in to Africa’s hospitality revolution’ HERE