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Hotels in Africa: A big game of Monopoly

03 September 2013, 14:58Fin24

Johannesburg - When delegates arrive at the Africa Hotel Investment Forum (AHIF), which takes place in Nairobi from September 23 to 25 2013, they could be forgiven for feeling like players in a giant, complex game of Monopoly.
Research released by W Hospitality Group, a founding member of Hotel Partners Africa (HPA), revealed that there are 40 000 rooms being planned or constructed on the African continent from now to 2017.

The top city for construction is Lagos, Nigeria, which has 4 080 rooms in development. This is followed by two Egyptian destinations, Cairo, with 2 843 rooms and Hurghada with 2 221 rooms.

The next most popular places are Abuja (1 598 rooms), Algiers (1 528 rooms), Tangier (1 505 rooms) and Nairobi (1 437 rooms).

"The African continent presents Marriott International with substantial opportunities for growth," said Alex Kyriakidis, president and managing director, Middle East & Africa, of Marriott International.

Africa has a billion people, the majority of whom are Gen X and Y. Seven of the top 10 fastest growing economies in the world are in Africa and there is very low penetration by branded hotels.

"The opportunity for the hospitality industry to support the demand for travel, as the middle classes grow from 300 million today to 1 billion by 2050, is key to the continent’s economic success and the prosperity of its people,” he said.
“The most interesting thing to look at in the numbers is not so much the scale of the development pipeline, but how things are changing from city to city", said W Hospitality Group and HPA Founder, Trevor Ward.

In Lagos and Abuja delays in completing hotels can be extreme and not all of the pipeline can be said to be certain to happen, he pointed out.

In Egypt several projects were commenced before the most recent unrest.

"In Marrakesh, growth has slowed down, but bear in mind that several new hotels have recently opened there," he said.

"Development in Addis Ababa is taking off. Historically the country has not been an easy place to do business, but the (hotel) chains are now getting deals done.”
He pointed out that there are some capital cities that seem not to be getting the attention that they deserve, for example Luanda, Abidjan, Khartoum and Kampala.

Luanda has only three hotels in the development pipeline – not for want of trying by the hotel chains, almost all of whom have been looking for deals there for several years.

Abidjan only reports two projects in the pipeline (432 rooms). However, it is poised to experience substantial growth over the next few years, becoming once again a major economic hub in the region, particularly for francophone Africa.

The return of the headquarters of the African Development Bank, scheduled for 2014, will bring with it about 2 000 employees and will attract many visitors, who all require international-standard accommodation.

The trends and challenges of hotel development in Africa will be scrutinised in detail at AHIF, which brings together the leading international hotel investors in Africa with local operators, tourism ministers, government officials and industry experts.

AHIF 2012 attracted 426 delegates from 38 countries, representing 310 organisations and several networking contacts made there have since resulted in deals.

- Fin24


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