Global brands see opportunity in French-speaking African regions

A measurable uptick in hotel-investment opportunities has been seen across French-speaking African regions, which, according to Horwath HTL France’s managing partner Philippe Doizelet, is due to the historically low penetration of international operators in the markets.

"This rise in sentiment is predominantly explained by the lack of quantitative and qualitative supply in some regions, with many hotels not being able to respond to the increasing demand,” he said.

For example, 50 percent of Radisson Hotel Group’s African deals have been in the Francophone region this year. “The Radisson Hotel Group has identified Francophone Africa as a key market and we’re aggressively expanding within the region to become the market leader,” said Erwan Garnier, director of business development. “Our objective is to double our current Francophone presence to 40 hotels with over 9,000 rooms in the market by 2022.”

Recent Radisson announcements for the region include: the 165-guestroom Radisson Red Hotel Abidjan in the Ivory Coast, scheduled to open in 2021; the 196-guestroom Radisson Blu Hotel Niamey, Niger; the 123-guestroom Radisson Blu Hotel Conakry, Guinea, scheduled to open in 2019; and the 120-guestroom Radisson Blu Hotel, Casablanca, Morocco, also slated to open next year. 

Radisson’s growth strategy is matched by AccorHotels, Mangalis and other international and regional chain, all of which are upping the ante in the region. “Other international groups actively looking for new development opportunities in the region [include] Hyatt, Hilton, Marriott, Kempinski, as well as regional groups including Azalaï, Mangalis and Onomo,” said Doizelet.

“By 2022, Mangalis will be the regional hotel leader with 20 properties in operation and under development offering [more than] 2,600 rooms in the various segments of the industry,” said Mangalis CEO Olivier Jacquin, noting the company will be launching four Noon-branded hotels in Benin, Niger and Ivory Coast.

With a significant number of brands entering the market, growth at this juncture remains constrained to the midscale pricing bracket, as there remains only a few locations for high-end developments, said Doizelet. “So far, only a handful of destinations in French-speaking Africa are suitable for top-end hotel development, such as Ivory Coast or Senegal.”

The major international groups seem to agree with Doizelet’s assessment, especially in Senegal, with Radisson Hotel group particularly active in the Dakar market and using the city as a launch pad for regional growth. “Senegal is the number-one market for international investors because of its long-term economic stability,” said Garnier. “We already have two of the country’s leading internationally branded hotels; Radisson Blu Hotel, Dakar Sea Plaza and Radisson Hotel Dakar Diamniadio. However, we now want to introduce the rest of our African brands to Senegal, i.e. Radisson Collection, Radisson RED and Park Inn by Radisson.”

And while competition grows daily in the market, Jacquin believes the scale of the opportunity in the market provides room for all operators. “The presence of a variety of suppliers gives the international and regional travelers choice of products in a market [that] is still growing,” he said. “Mangalis, like any other brand, has its own DNA and signature. In addition, we are an African-rooted hotel operator and developer.”

As Radisson continues to expand across the market with almost 90 properties in its management portfolio, the company’s rapid growth depends on developing strong local ties. “We have an asset-light strategy in Africa,” said Garnier, noting this kind of strategy relies on a “robust” local foundation and partners. “We are always looking for local partners that have the long-term vision of developing hotels with an international partner like the Radisson Hotel Group, financial muscle to leverage the equity needed to kickstart the project, financial partners to raise the debt to complete the project. However, more importantly, they must have the local connections to navigate the local administration to obtain construction permits and local legalities.”