Global hotel companies plan African growth

The Africa Hotel Investment Forum is being held this week in Nairobi, with scores of companies taking the opportunity to reveal new plans for growth across the continent. Marriott International, for example, is launching the AC brand into Africa later this year, and plans to have 200 hotels and 38,000 rooms in the region by 2023. Hilton, meanwhile, is on track to more than double its African portfolio in the next five years, and has already opened the first Curio Collection hotel in Lagos.

AccorHotels Grows in Ghana

Other global companies trumpeted their development plans during the conference. AccorHotels and Platinum Properties, for example, have signed a deal to open the 363-guestroom Pullman Accra Airport City, the first Pullman-branded hotel in Ghana. The complex, set to open in 2021, will  include the Pullman Living serviced apartments, making it the country’s first dual-purpose hospitality project, as well as Ghana’s largest hotel.

“Pullman Accra Airport City will solidify our presence in a country where we already operate an Ibis Styles as well as the Mövenpick Ambassador Hotel Accra,” stated Mark Willis, CEO, Middle East and Africa, AccorHotels. “Moreover, this project will strengthen our brand’s visibility in West Africa where we already operate in Dakar and Abidjan and signed a Pullman hotel in Lagos earlier this year."

The Pullman Accra will have 214 hotel rooms and suites as well as 149 serviced apartments under the Pullman Living brand. The property is a joint development between equity partners Inter-Afrique Holdings Ltd. and Ghana Infrastructure Investment Fund, the private-sector-focused sovereign wealth fund of Ghana that has diversified interests in infrastructure and tourism. The development is managed by Inter-Afrique Properties Ltd. as development manager; Diagonal Projects Africa as project manager, IBC Equity Partners as transaction advisor and W Hospitality Ltd. as hotel consultant.

Radisson eyes 2022

Radisson Hospitality AB, part of Radisson Hotel Group, signed 10 new hotels for Africa during the first nine months of 2018. The company’s growth strategy in Africa is a key initiative for Destination 2022, its five-year strategic operating plan. Ultimately,  Radisson wants to be one of the top-three hotel companies in the world. The group plans to reach 130 hotels with more than 23,000 rooms in Africa by 2022.

“Each signing is strategically aligned to deliver our five-year development plan, through new market entries, the introduction of new brands and delivering scaled growth in Africa’s key destinations,” said Andrew McLachlan, SVP of development, sub-Saharan Africa, Radisson Hotel Group. “So far this year, we will be adding 1,300-plus rooms to our portfolio in Africa and plan to continue this accelerated growth through further expansion in key markets across this flourishing continent.”

Africa’s Appeal

Giving the keynote address at the conference, Daniel Silke, political economy analyst and director of the Cape Town-based Political Futures Consultancy, gave an optimistic assessment of Africa as a destination for inward investment.

“With geo-political risk increasing across the world, Africa’s recent growth spurt is in question," he told attendees. "Increasing protectionism from the Trump administration amidst an expanding U.S./China Trade conflict adds to the tensions. The rising U.S. dollar and interest rates also puts pressure on inward investment to the continent as well as domestic currencies.” Silke cited political uncertainty in Europe and the unresolved Brexit issue in the UK  as further causes for concern

“African nations face these global threats along with other emerging markets across the world; however, despite these tensions, African nations continue to consolidate their economic growth," said SIlke. While global growth is set to stagnate in 2019, he added, Africa’s growth is set to improve over 2018 and outpace the global GDP average. “A rising consumer class underpins much of the performance of African economies, but better governance, institutional capacity and business reforms all assist in attracting foreign direct investment from a variety of nations—and not just China."

Silke believes the continent is only at the beginning of enhancing its intra-Africa trade. “Economic policies are shifting across important markets as new leaders embrace more market-friendly reforms,” he said, noting trade wars can shift production and manufacturing toward the continent as Africa remains largely outside the current tariff wars. “A more-educated population, a clamoring for jobs and urbanization all contribute to the rise of the services sector, agriculture and manufacturing as key players into the future.”