Global brands see opportunity in East Africa

Hilton Addis Ababa. Photo credit: Hilton

According to a regional study from Lagos, Nigeria-based W Hospitality Group, Ethiopia is leading hotel development in East Africa. The hotel development pipeline in Ethiopia is up almost 50 percent from last year, with the capital city of Addis Ababa accounting for 86 percent of the total at almost 5,000 rooms in 25 hotels. The cities of Awassa, Bahir Dar, Bishoftu, Gondar, Hawassa and Langano also are planning expansion. The study credits government incentives as well as international conferences and “global bases for [nongovernmental organizations], embassies and aid agencies” for the hotel growth in the city. 

Beyond Ethiopia, Kenya has 2,754 rooms under construction, and Tanzania also has seen increased interest from developers. 

Of global brands eyeing the region, Paris-based AccorHotels has doubled the number of hotels in its development pipeline in East Africa, with a 66-percent increase in the number of rooms signed. 

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Hilton, meanwhile, is deploying part of its $50-million Hilton Africa Growth Initiative to help fund growth in the region. The project, announced almost a year ago, earmarked funds to support the conversion of around 100 hotels with approximately 20,000 guestrooms in multiple African markets into Hilton-branded properties—primarily the flagship Hilton brand, the DoubleTree by Hilton brand and the company’s Curio Collection soft brand. W Hospitality Group’s report says that the company has seen a 51-percent growth in its regional pipeline for its efforts. 

The report isn’t all good news, however. While there is plenty of branded supply in the regional pipeline, W Hospitality noted that many projects have stalled for lack of investors. With tourism improving and opportunities abounding, these unfinished developments may be a good opportunity for new investment.