World’s hotels choose Africa
PIPELINE: MARRIOTT LEADS THE PACK
Marriott leads the pack, but there are concerns about completion timelines.
But there are concerns about completion timelines and practicability.
As global uncertainty continues to rattle both developed and emerging markets, renowned brands in the hotel space are finding solace in Africa. The hotel space has seen stellar growth in the past decade, with 418 deals and more than 100 brands making their entry into the Mother Continent.
Year-on-year performance for Africa as a whole this year has shown growth, though growth in the number of rooms in the pipeline has been inconsistent – veering from 25% in 2015, to 13% lastb year and ticking up slightly to 14% this year.
Much of the investment correlates with tourism figures for the traditional leisure market, as well as the growing meetings, incentives, conferencing and exhibitions business tourism sector.
Despite the relative slowdown of overall expansion across the continent, Ethiopia’s new room figures have continued to move simultaneously with the gross domestic product (GDP) growth (its annual GDP growth averaging 5.9% between 1981 and 2017).
“Ethiopia’s hotel expansion is truly impressive,” says Trevor Ward, MD of Nigerian-headquartered W Hospitality Group, which conducts a yearly Hotel Chain Development Pipeline Survey. “The activity there has been huge. Investors and operators are now looking to exploit the opportunities outside of Addis Ababa, in the secondary cities and tourism centres.”
Hotel investment is steadily making its way to the Eastern Africa region.
David Tarsh, founder of Tarsh Consulting, says: “AccorHotels is among the chains focusing heavily on East Africa, including Ethiopia, doubling the number of hotels in its development pipeline in the region, and achieving a 66% growth in the number of rooms signed.”
Hilton Hotels & Resorts has embarked upon a more long-term rollout, dedicating part of its $50 million (R717 million) Hilton Africa Growth Initiative to the region, which has seen a 51% growth in its pipeline.
Among the global brands, Marriott International tops this year’s table for the most planned hotel rooms in the pipeline across Africa. Ward says: “Marriott International currently has a development pipeline of 93 new hotels with 17 708 rooms in Africa. Almost 50% of those rooms – 8 587 – are already under construction.”
He says the Hilton chain and Radisson Hotel Group rank second and third, with 6 352 and 4 840 rooms currently under construction respectively.
French multinational AccorHotels has seen a massive rollout too, with major signings in 2016 and 2017 across the continent bearing over 10 000 rooms, although 36% of these are under construction. Following Radisson’s expansion in the past decade, the chain now has the largest number of rooms under construction, beating the Hilton brand by over 300 rooms.
Despite the optimism, concerns remain regarding the completion timelines and their practicability. Ward cautions: “Of the total 76 322 rooms in the African pipeline, almost 34 000 rooms are said by the chains to have scheduled openings this year and in 2019. The reality on the ground, however, is that 4 000 of those rooms were not even under construction by the first quarter of 2018.”