Growing middle class, economy attracts investments in the hotel industry
Kampala, Uganda | ISAAC KHISA | Nearly six years ago, 18 countries in Africa did not have any global branded hotel as prospective owners and operators did not see business opportunities. But this has now reduced to only five countries – Central African Republic, Eritrea, Gambia, Liberia and Somalia – on the continent.
Hotel brands such as Accor, Marriot, Hilton, Sheraton, Radisson Blue, and City Blue are now casting their nets wider on the continent owed to the growing middle class, growing economies and increase in foreign direct investments.
This comes as Sub-Saharan Africa economy continue to show signs of robust recovery, with the Gross Domestic Products forecast to grow 2.8 per cent this year, according to the World Bank.
Similarly, FDI inflow into the continent is on an upward trend, recording an 11% increase to $46bn in 2018.
Latest data from STR, an American firm that tracks supply and demand data for multiple market sectors including hotel industry, shows that Accor and Marriott that leads the hotel rooms in Africa, with 24,512 and 24,508 rooms, respectively, have lined up approximately 20,000 and 15,000 rooms, respectively, to be opened in the few years to come.
Radisson Group Hotels and Hilton Worldwide, which currently have 16,230 and 11,289 rooms in Africa, plans to add approx. 10,000 and 11,000 rooms, respectively. Other global brands planning to increase their operations on the continent include; Intercontinental Hotel, Best Western Hotels and Resorts, and Hilton Garden Inn.
Some of the cities that the hotel brands are investing in include; Cape Town, Kampala, Lusaka, Abidjan, Nairobi, Abuja, Addis Ababa and Cairo. Currently, Africa has 5,000 hotels.
On Sept. 24, Accor Hotels that currently operates 164 hotels across 22 countries in Africa, signed a partnership deal with the Compagnie Hôtelière et Immobilière du Congo (CHIC), owned by leading Democratic Republic of Congo conglomerates, to open Novotel properties in the capital, Kinshasa, and its two major mining centres in the south, Lubumbashi and Kolwezi.
The partnership will introduce 337 keys to Sub-Saharan Africa’s largest country. Mark Willis, CEO, Accor Middle East & Africa, said “With Africa tipped as the next global market and DRC one of the continent’s fastest-expanding economies with an affluent middle class, the time is right to introduce our flagship midscale lifestyle brand in three major growth markets.”
The hotel brand already operates two properties under the upscale Pullman brand in DRC – the Pullman Kinshasa Grand Hotel and the Pullman Grand Karavia in Lubumbashi.
City Blue hotels with operations in Kenya, Uganda, and Zambia, plans to open doors to the Tanzanian market in Dar es Salaam. The hotel group plans to open the 65 bedroom facility in March 2020.
The Hotel is also eyeing at having properties in Arusha, Mwanza, and Zanzibar as well as Democratic Republic of Congo.
Similarly, the InterContinental Hotels Group, has signed a Master Development Agreement (MDA) with Aleph Hospitality to develop ten franchise hotels across IHG’s portfolio of brands in midscale and upscale segments.
The MDA will see IHG expand its presence in Africa across key countries such as Kenya, Ethiopia, Nigeria, Morocco, Algeria and Ghana. The addition of new hotels, as a part of the agreement, will solidify IHG’s position as one of the leading hospitality players in the MEA region and will strengthen IHG’s portfolio in the continent, across six brands including Crowne Plaza, voco, Hotel Indigo, Holiday Inn, Holiday Inn Express and Staybridge Suites.
With a portfolio including nine hotels across five countries on the continent and plans to expand to 35 hotels across the MEA region by 2025, Aleph Hospitality is a pioneering hotel management company offering a results-driven alternative to traditional hotel management models.