Starwood aims to move first in Africa

30 November 2012

LAGOS: Starwood Hotels & Resorts is planning to more than double the size of its African portfolio by the end of the decade, and thus potentially gain a first-mover advantage as a result.

The company expects to open ten new hotels in the region during the next three years, which would give it 48 sites in 15 countries. By 2020, it hopes to boast 100 properties on the continent.

"We like to say that we will enter markets before it is even obvious that we should be there because by the time it is obvious, we want to be up and running," Frits van Paasschen, Starwood's chief executive, told How we made it in Africa.

At present, Egypt, Morocco and Nigeria are among the firm's leading hubs in Africa. Taking Nigeria as an example, van Paasschen said it will build three properties in the country, adding to the current five.

"The number of hotels today in Africa falls short of demand in many markets and that's a function of the fact that capital is in short supply or difficult to attain and in the past companies have under-invested in the opportunity in Africa," he continued.

"Some of the older hotels are in need of capital and renovation but – as importantly – there is a great demand for more hotels in the markets where economies are growing as quickly as they are."

Drawing upon his own experiences of visiting Africa, van Paasschen cited two core learnings of major significance to making progress.

"The first of which is that Africa is clearly changing and the development and the construction of infrastructure is under way," he said. "The second is that there is still quite a way to go and much development that still needs to take place."

Looking forward, the Ivory Coast, Ghana and Angola are some of the main countries where Starwood is seeking to establish a presence, with business travel remaining the primary driver of its activity.

Van Paasschen said: "We have many of our loyal guests asking us whether we have hotels there. We have customers expressing an interest so those are the three markets we would be very interested in."

Starwood actually began trading in Africa during the 1970s, and van Paasschen suggested this comparatively long history constituted a huge bonus for the organisation.

"It gives us a base of experience in markets; executives that know how to get things done; a reputation with customers and with government; and a familiarity of the brand among travellers – and that is the best foundation to be able to grow."

Data sourced from How we made it in Africa; additional content by Warc staff