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\u201cThere\u2019s a huge amount of interest in Africa at the moment in terms of investment, hotel investment and the growth of tourism,\u201d says Jonathan Worsley, Chairman of Bench Events which organized the Hotel Investment Conference Africa in Morocco recently. The hotel industry has really taken off in many African nations, especially now that the continent is experiencing a time of, mostly, widespread peace.<\/p>\n
The majority of new hotels that are springing up are geared to fit the comforts of businesspeople.\u00a0 Many of these hotels are located in post-conflict and mineral-rich African countries.<\/p>\n
Investors and developers to date, interestingly, have largely been local corporations. Now, international chains like Marriott have started to expand their hotels into Africa, setting up regional headquarters and bringing in top management.\u00a0 According to Trevor Ward, from W Hospitality, \u201cIn the last couple of years you\u2019ve seen so much more interest from the chains.\u00a0 Chains like Hilton and Radisson, among others, have put senior executives on the continent.\u00a0 They\u2019re based in Africa to drive their development tactics, as opposed to trying to do it from Europe, which was not working.\u201d<\/p>\n
Well-known hotel chains not only suggest a familiar level of comfort to weary travelers and businesspeople, but also tell others that business is growing in these countries.\u00a0 Hotel development, in general, helps lay the groundwork for business infrastructure in countries.\u00a0 Wayne Troughten, from HTI Consulting, speculates that, \u201cthe brands will put Africa back onto the map [as a travel destination] and also enable more regional travel.\u201d \u00a0Trevor Ward adds, \u201cHotels create a demand and therefore grow the economy directly.\u201d<\/p>\n
Hotels are not just there to accommodate travelers and help the economies, they are doing big business themselves.\u00a0 As Ward explains, \u201cHotels can be very profitable.\u00a0 We have hotels here in Lagos which can achieve a profit of 65-70%.\u00a0 On a comparable basis, a hotel in Germany would be very happy to do 30%, in London it\u2019s probably 40-50%.\u201d\u00a0 So, the profits are already there.<\/p>\n
According to Troughten as infrastructure improves, so too will the hotel business. \u201cHave a look at the number of the airports that are currently in expansion phase or planning expansions in Africa and you will see where a lot of the growth is happening,\u201d he explains.\u00a0 \u201cSome of these airports probably haven\u2019t been refurbished or expanded in 30-40 years.\u00a0 Expansions are happening all over the place in order to keep up with demand and drive, which is good for the hotel business.\u201d<\/p>\n
Southern and Eastern Africa are areas that generally see a lot more tourists, though occasionally the numbers can vary.\u00a0 Troughten highlights the effects of the World Cup on the conditions in South Africa, \u201cUp until about 2005, or 2006, we saw significant growth in tourism and basically the hotel growth couldn\u2019t keep up with the demand caused by tourism and business.\u00a0 Prior to the World Cup, hotel occupancy averages were reaching about 75-77%.\u201d Hotels were developed leading up to the World Cup in 2010 and, unfortunately, after it ended demand for hotel rooms dropped. This created an oversupply in the market, which is just now starting to show signs of improvement.<\/p>\n
Conditions in Western and Central Africa may be less developed than their neighbors to the south, but the presence of oil, gas and minerals in these countries will bring big business there.\u00a0 Big business will bring money into the economy, which will lead to bigger and better hotels, because everybody\u2019s got to have a place to stay. Recent business hotel development in the mining capital of the Democratic Republic of Congo, Lubumbashi, is a good example.<\/p>\n
The North African hotel market got hit with the unrest and transition caused by the Arab Spring in 2011.\u00a0 The key exception was Morocco, which remained stable during this period.\u00a0 There has been no disruption in hotel development there and hotel development continues strong with over 20 projects in the pipeline for major hotels.<\/p>\n
The growth in the hotel market is not a short-term opportunity but also presents longer term opportunities as projections for growth in travel and airport expansion plans go well into the next decade, which as noted earlier will help drive the hotel business.<\/p>\n","protected":false},"excerpt":{"rendered":"
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