DEVELOPMENT
2 to WATCH in Africa
It ’ s hard to keep track of all the activity in Africa , but two players are worth watching – both stylish and efficient developers and operators banking on the continent ’ s future .
Urban Hotel Group and Latitude Hotels are relatively young integrated operators approaching a widely diverse African hotel market from two angles , but they share a goal : to establish an early foothold in Sub- Saharan Africa , a frontier with plenty of untapped potential .
Urban Hotel Group is hewing to the budget and value end of the spectrum , where there is a dearth of well-designed , consistent product for the growing business travel market . The three concepts ( Urban Express , Urban Luxe and Urban Lofts ) have per-key building costs in the US $ 60,000 to US $ 75,000 range and ADRs from US $ 75 to US $ 130 . “ Good value and good design are hard to find in Africa . That ’ s our niche ,” says Managing Partner Chris Jannou .
The learning curve for Urban , however , has been steep , Jannou adds , with obstacles like tribal lands , widespread graft and the African notion of time . “ We in the west have money to spend ; they have time to spend — and they will outspend you ,” he says .
Development financing has gradually materialized in the form of pension funds , development finance institutions , or DFIs , private equity and retail banks . Local contractors often have been slow to adopt modern construction methods that might reduce construction time and costs . In general , everything seems to take longer than it should . But “ anything is possible if you have the stomach and patience for it ,” Jannou says .
Urban has two hotels open in Zambia , with a goal of five new locations across the region over each of the next five years in capital cities and commercial centers . At that point , Jannou says management will reevaluate whether to hold or go public . “ The way we see it is there is an opportunity at the value end right now , and people will catch on to that opportunity . So we plan to get out there as fast as possible ,” he says .
BOUTIQUE FOR BUSINESS Latitude Hotels is banking on a very
32 hotelsmag . com March 2019