REGIONAL PROFILE
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for it given the challenges we expect to see outside more mature markets . About 50 % of growth will come from Hilton Garden Inn , and I don ’ t see why 50 % of that can ’ t be modular .”
Construction is likely the best way forward . “ The biggest challenge we find is quality product for conversion ,” says Chawla , whose Louvre brands have 40 with 6,650 keys trading and 22 hotels opening within 12 months . “ It is not ideal and in many cases existing hotels don ’ t meet health and safety standards , or the quality of construction is inferior .”
No matter the size of the opportunities , these regional players have to be careful of the pitfalls of a still emerging hotel space . Wolfgang Neumann , member of the board at Rezidor Hotel Group and former CEO , urges patience to overcome knowledge gaps , bureaucracy and compliance issues . “ Everything takes longer in Africa , from building to opening , to training , import of goods , licenses , etc .,” Neumann says . “ Be ready and have this built into your opening / pre-opening cashflow planning .”
Neumann also warns that many local African developers are new to the hotel game and need assistance and education about building an opening . “ One must be closely connected to the owners and key people , and be ready and willing to assist / help ,” he says .
McLachlan adds that developers should use turnkey construction contractors that agree to fixed times and prices to avoid delays and interest cost rollups that can as much as double the price of development . “ If planning takes longer , it is worth it , and don ’ t succumb to pressure to start construction too early and end up with a bad project that may need to be torn down ,” he says
In a
NUTShELL
W Hospitality Group ’ s Trevor Ward and JLL ’ s Xander Nijnens assess African markets .
South AfricA
In the doldrums with more political turmoil ahead ; upturn in pipeline activity as the oversupply created by the 2010 FIFA World Cup has been absorbed .
Mozambique was supposed to be big , but is on the naughty step because of fibs about loans taken by government . In Angola , it is so difficult to do business , the economy is in free fall and AccorHotels has a huge 50-hotel deal , which is really all that ’ s needed . Angolan capital Luanda could be oversupplied with non-branded hotels – several are “ under construction ” and some of those are stalled .
centrAl AfricA
There are opportunities in Cameroon , but much talk and little action . It is a difficult place to do business .
WeSt AfricA
There are still massive opportunities in Nigeria , including many of the secondary cities , but it will take time for economic recovery to come through ( recovery in oil prices would help ), and for the impact on devaluation of the naira to work out . It imports everything and , therefore , the price of building a hotel is double what it was three years ago . Ghana has some prospects in cities like Tema and Kumasi , but lots of supply coming up in Accra . Hot spots are the Ivory Coast and Senegal , although there are multiple projects in Dakar . Sierra Leone has great tourism potential . north AfricA
Algeria has great tourism potential on the Mediterranean coastline , if the political will were there . Morocco is all but “ done .” Tunisia has a lot of supply planned for Tunis . Egypt has a huge development pipeline despite the problems because the product is just so terrific .
eASt AfricA
Opportunities in the secondary cities of Kenya ( Kisumu and Nanyuki ) and Tanzania . Nairobi is oversupplied . Dar es Salaam hotels are suffering from a ban on any government business being held in hotels . Opportunities are in secondary cities . Djibouti is a tiny country with great potential as a new airline has just started . In Ethiopia , Addis is oversupplied , but there are opportunities in secondary cities .
Uganda has great opportunities both in Kampala and elsewhere with great potential to increase safari and other types of tourism . In Rwanda , Kigali is oversupplied .
indiAn oceAn
New airlift has opened up many new source markets . The challenging operating climate in North Africa is displacing beach tourism into the Indian Ocean . The beach and nature appeal of the Seychelles , Zanzibar , where airlift has improved , Mauritius and Madagascar are exceptional . There are very strong local and regional operators that deliver an excellent service experience , and there are trendy new beach destinations compared to the more established core in Asia .
36 hotelsmag . com October 2017