Increased Africa travel prompts expansion from Starwood, IHG

In mid-September, Starwood announced plans to add up to 20 hotels to its portfolio in Africa over the next for years, placing emphasis on its Sheraton and St. Regis brands. 

Neil George, Starwood's SVP for acquisitions and development in Africa and the Middle East, told Bloomberg that mainly five-star hotels will be under consideration to be added to the company's existing repertoire of 37 hotels in the region, with five new sites planned for Nigeria.

Well, this expansion is now underway. eTurboNews reported that Starwood signed the Four Points by Sheraton Ikot Ekpene, a new-build property set to open in Nigeria in 2015. The hotel is owned by the Akwa Ibom State Government, and is Starwood's 10th hotel in Nigeria, and it's second in the state of Akwa Ibom, following the Le Meridien Ibom Hotel & Golf Resort.

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“Nigeria remains to be an important growth market for Starwood and we see a significant opportunity in growing our mid-market brands in the country and throughout all of Africa,” Bart Carnahan, SVP acquisitions & development, Starwood Hotels & Resorts, Europe, Africa & Middle East, told eTurboNews.

The expansion has been spurned on by increases in travel an Africa showing a higher economic growth than in the U.S. and Europe. Despite political instability causing losses of occupancy in some areas, average revenue per available room (RevPAR) in southern Africa is up 6.7 percent this year to $74, according to Bloomberg. On top of this, South African RevPAR is up 7 percent in 2014, with a record 9.6 million foreigners visiting the country in 2013, up 5 percent from 2012. 

Because of these factors, Starwood isn't the only company interested in Africa. InterContinental Hotels Group (IHG) revealed plans to develop its first hotel in Ethiopia earlier this month with the 210-room Crowne Plaza Addis Ababa. According to All Africa, IHG signed a management agreement with Tsemex Hotels and Business to develop the property.

Additionally, Global hotel consultancy HVS opened its newest offices in South Africa's Cape Town. According to Incentive Travel & Corporate Meetings, the move is in reaction to the growing interest from hotel investors in the region. HVS London director Tim Smith will head up the new venture.

“Our work in sub-Saharan South Africa has been increasing over the past few years, so it makes sense to have a dedicated office from which our operations can be based," Smith told Incentive Travel & Corporate Meetings.  "There is a real demand from potential hotel investors for local knowledge and being based here will enable us to work more closely with those organizations looking to expand throughout Africa."

Last month HVS released its first African Hotel Valuation Index, which revealed hotel rooms in the Seychelles have the highest value per room (US$522,000) while those in the Nigerian capital of Abuja have seen amongst the biggest rise in value, from US$450,200 in 2012 to US$492,000 in 2013.