Warc Blog

Hotel chains target Africa

24 July 2013
LAGOS: Leading international hotel chains are expanding their presence in Africa due to the region's high economic growth rates and strong demographic trends.

With more than half of the continent set to produce an average GDP expansion of 5% annually, fuelled in part by rising exports of oil and minerals, demand for business accommodation is growing fast and is creating opportunities for global brands.

Trevor Ward, principal of the Nigeria-based consultancy W Hospitality Group, told Bloomberg that planned developments have risen 23% in sub-Saharan Africa and 9% in North Africa. This compared with 8.5% in the Asia-Pacific region and 4% in Europe.

"There is not that much opportunity left in the more-developed markets like Europe and in the US for new hotel developments," Ward added. "Today, Africa is seen as a big blank block on the map where hotel companies need a presence in."

Meanwhile, Hassan Ahdab, vice president of the African and Indian Ocean region for Starwood Hotels, pointed out that "Africa's middle class is almost as large as the entire populations of Russian and Brazil combined… the boom in sub-Saharan Africa is attracting business talent from the rich world".

As a consequence, Starwood plans to increase its number of properties in Africa from its current 38 to 50 by 2016.

Meanwhile, according to a survey from W Hospitality, Marriott has plans for 3,900 rooms at 22 hotels and luxury hotelier Groupe du Louvre plans to double its number of rooms in the region to 2,290. Hilton is set to be the region's largest international hotel chain, with plans for 6,230 rooms at 23 hotels.

Rudi Jagersbacher, Hilton's regional president, indicated that the company's ultimate aim is to have properties in all of Africa's key cities.

Hyatt, too, has plans to open hotels in cities such as Lagos, Nairobi, Accra and elsewhere, in part to attract Chinese business travellers.

Peter Norman, a senior vice president at Hyatt, said: "Our strong development pipeline in China supports our expansion into Africa. By building preference amongst Chinese business travellers at home, we will encourage them to visit Hyatt hotels when they are abroad."

Data sourced from Bloomberg, Financial Times; additional content by Warc staff

 
Envelope
EMAIL UPDATES

Sign up to Warc News – free daily bulletins on brand and market strategy, digital media and innovation


 

News content feedPrint