Rather curious, methinks, that the country with the largest hotel industry in Africa, and with the largest number of home-grown brands, hasn’t got a larger presence of those brands elsewhere in sub-Saharan Africa.

I’m talking, of course, about South Africa.  Travellers who live there, or who visit, will be familiar with a long list of local hotel chains, such as Protea, City Lodge, Tsogo Sun, Peermont, Sun International and Three Cities.  These and others are long-established names “down south”, and most have a significant presence in the industry there – at latest count, Protea have over 80 hotels in South Africa (including those in their African Pride collection), and Tsogo Sun almost 60.

Now, these chains have made pioneering inroads into southern Africa.  Tsogo Sun have a presence in Tanzania, Mozambique and Zambia, Sun International are in Lesotho, Zambia, Swaziland, Botswana and Namibia – and so on.  But “the experts” say that the countries to watch in sub-Saharan Africa, in terms of economic growth, both in percentage terms and absolute dollars, are Angola, Nigeria, Ghana, Ethiopia, Kenya and Tanzania.  Most readers will have a view on whether “those experts” are right, and some will want to add their own “one to watch”.  With the exception of Protea, the presence of the South African chains in those countries is very light.

The South African chains are not keeping up with the international chains, both those long established like Hilton and Le Meridien, and Johnny-come-lately’s such as Kempinski and Carlson Rezidor, when it comes to their expansion.  In our pipeline survey conducted at the beginning of 2012, not one of the  South African chains made it into the top 10 in terms of new rooms in the development pipeline.  Protea were almost there, but because their hotels tend to be small in size, they were elbowed out by the likes of Kempinski and Rotana.

Before one of the Protea guys gets up and shouts at me, they are the one chain that has a substantial presence outside of South Africa, with 11 hotels in Nigeria alone, the most of any international or regional hotel chain, and with several in the development pipeline.  Looking at Nigeria, the largest market outside South Africa, Southern Sun and Sun International have just one hotel apiece, City Lodge is nowhere to be seen (but good to see that they have finally “travelled”, with hotels in Kenya and Botswana).

Graham Wood of Tsogo Sun explained recently at the African Hotel Investment Forum in Nairobi that the reason for this “light footprint” was generally because there had been an almost single-minded historic focus on their domestic market – and look where that got them, with the serious supply overhang from 2010 – and specifically for Tsogo Sun because they have historically had an “asset-heavy” model – i.e. a policy of owning the hotels that they manage.  And that capital requirement has restricted their expansion.

That’s fine, but the fact is that the likes of Hilton, Carlson Rezidor and Starwood are claiming sub-Saharan Africa as their own, and are enjoying first mover advantage in many markets.  The Radisson Blu hotel in downtown Lagos is the best performer in that market.  Starwood have 5 hotels in Nigeria with, between them, more rooms than Tsogo Sun has in the whole of sub-Saharan Africa excluding South Africa, including one in Nigeria.  The non-South African pipeline of all the South African hotel chains is equivalent to that of one company, Marriott, which is a relative newcomer to Africa.  And there is not a single South African-branded hotel in Francophone Africa.

Curious, huh?

Trevor Ward

W Hospitality Group, Lagos           

trevor.ward@w-hospitalitygroup.com