I wrote last month about the “march of the chains” – how for the first time the international hotel companies are devoting serious resources to increasing their presence in Africa.  Why?  Because their presence here is still woefully inadequate, compared to the coverage they have achieved in most of the rest of the world.  And why now?  Because the global focus on Africa has meant greater travel, to and within the continent, and travellers need hotels.  A simple enough equation – would that hotel development in Africa were that easy!  But I’ll leave that to another time………….

Africa, together with its islands, has 53 countries, so how to choose where to go?  Most country capitals can support an internationally-branded hotel just because of the government and other activity there, and because they are the main international gateway of the country (although not always, think Nigeria, think South Africa).  But once those dots are on the map, there need to be other reasons for expansion.

In general terms (and NEVER generalise about Africa!) there are two main sectors driving the economies of Africa, and therefore hotel development – oil and tourism.  The continent is beset by problems, both natural and manmade, but at the same time it is blessed with an abundance of natural resources.  And the world needs those resources, particularly the oil and gas.  Fifteen per cent of the USA’s oil is imported from the Bight of Benin (Nigeria, Equatorial Guinea, Cameroon etc), and many billions of dollars continue to be invested in increasing the production of oil and gas there.

So many hotel companies – Hilton, InterContinental, Radisson SAS to name but 3 – are actively targeting the oil-producing countries, specifically Nigeria, Equatorial Guinea and Angola.  Sudan is also a major producer of oil, and Khartoum is also a focus of attention, as is the south of the country, where a number of hotels are being developed in and around the new capital, Juba, to support the development of the newly-autonomous region.

Oil is also a major focus in North Africa, with Libya and Algeria witnessing increasing interest, especially in the former now that sanctions no longer prohibit the US-based chains from working there.

Elsewhere in North Africa, and  in the east of the continent, tourism predominates as the reason for hotel development.  Morocco and Tunisia are experiencing major development whilst Mombasa in Kenya is rising again as an exotic destination, often twinning with a safari; InterContinental are looking to re-enter that market after several years’ absence.  Currently only Serena are the only international chain there.  Presenting serious potential competition to Mombasa is Zanzibar, in my opinion one of the best destinations on the coast, with a fabulous tourism product.  Kempinski and Serena both have great hotels there, with Mövenpick recently entering the market.  Says Kristin Thorsteinsdottir of Radisson SAS “Zanzibar is on our wish list but barriers to entry seem to be quite high, there is a shortage of sites in good locations. It is my hope that the island will achieve room rates similar or higher to the ones currently achieved in locations such as Mauritius.”

Elsewhere in Tanzania, the safari product, better in many respects than Kenya’s, is receiving close attention, from Kempinski and others.  Mozambique, profiled elsewhere in this edition, is also a “new” tourist destination, although the capital, has already experienced a glut of hotel development, largely driven from South Africa. (HN – if this is not the case and, let’s face it, you’re now the expert, please change it!).

But ask many if not most international chains, and they will tell you that South Africa is the main target for their expansion, not least because it is so much easier to develop there than most other places in Africa.  But commercial considerations, of course, predominate.  According to Radisson SAS’s Thorsteinsdottir, “Johannesburg, Cape Town and Durban all experienced double digit growth in RevPar last year. There is still room for growth in those locations and the Football World Cup in 2010 will provide exposure globally, giving the country a showcase opportunity across the sporting, business and general tourism markets”.

Expansion of the chains out of South Africa is also a new phenomenon, with Protea now operating around 25 hotels in 7 other countries in sub-Saharan Africa (and also in Egypt, the UK and Reunion).  They have been particularly successful in penetrating the Nigerian market, with 9 hotels currently operating.  Southern Sun, currently with just one hotel outside South Africa (in the Seychelles) are also seriously looking at Nigeria, with deals in Lagos, Abuja and Calabar on the books.

Who has been the most successful in Africa?  Accor, by far, with 54 hotels and almost 6,500 rooms in 17 countries in sub-Saharan Africa.  Add in North Africa, and that goes up to 124 hotels, almost 21,000 rooms and 21 countries.  The other chains must be looking at that enviously, and wondering how they will ever catch up!

Trevor Ward

W Hospitality Group, Lagos

trevor.ward@w-hospitalitygroup.com