THE PIPELINE : AFRICA
Watch for giants such as Carlson Rezidor to joint-venture with banks . “ We have a joint venture with Mvelaphanda ( one of the most important Black Economic Empowerment players in Africa ) that gives us a development and operational advantage ,” Neumann says . “ This helps us and our owners to overcome funding hurdles which delay growth .”
Risk and reward Not surprisingly , Africa will be an asset-light play . “ Our focus is on management contracts ,” says Marriott ’ s Strachan . Hilton is also emphasizing management contracts , though Fitzgibbon says he is open to franchising .
In a few more mature markets like South Africa , leases are an option , as are strategic joint ventures . In some instances , too , international chains are inking partnerships with local brands . Louvre Hotels Group recently announced a deal to oversee the management , operations and marketing of the Ryad Mogador Hotels chain . Local and regional chains still tend to favor ownership , particularly outside their home countries . “ Tsogo prefers to own all or a major stake in its hotels where possible ,” von Aulock says . “ We utilize our own capital and balance sheet , so funding is not an issue for us . Ring-fenced financing for individual hotel projects is difficult to get but not impossible , but the costs tend to be fairly exorbitant unless there is a substantial promoter of the project .”
International and local chains alike have their battles . Laico , a Libyanowned , Tunisian-managed chain , has had some success , but its hotels are rarely able to compete with the international chains when they go headto-head . “ The difference is that Laico owns their hotels ,” Ward says .
Mali-based Azalaï is an exception to that rule . Having raised funding through Togo-based Cauris , it is establishing a presence in West Africa .
Overall , though , Ward feels the hotel market in Africa will continue to belong to major international players . Demes , though , says that in some sectors , South African brands do have a chance to steal a march . “ South African brands together with operators that have chosen to work from a South African ‘ base ’ continue to remain preferred partners in the mid- to upscale segment of many African countries , especially since some international brands ’ standards are rather inflexible ,” Demes points out .
Looking ahead , the picture is pretty rosy . According to STR , 483 hotels totaling 118,713 rooms are in the Middle East / Africa pipeline . And that number could be conservative .
“ Africa has strong development opportunities given that many of the 56 countries that make up the continent are emerging travel destinations where hotel development hasn ’ t reached its peak ,” says Karl Hala , IHG ’ s director of operations , Africa and general manager of the InterContinental Nairobi . Maybe , this will be Africa ’ s time to shine .
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