Our ‘Pipeline’ report has just been published, showing a total pipeline of 401 new hotels due to open between 2019 and 2026, with just over 75,000 rooms. Of those, 110 deals were signed in 2018 and the first couple of months of 2019, accounting for 18,651 rooms.

Do you really want a robot to deliver your room service order? There have been a couple of reports
recently about hotels in Asia and their experiences with robot staff, both positive and negative

The chairs in the lobby, the front desk, the tables in the restaurant, and what goes on top of them (plates, glasses, silverware etc.), and in the bedroom of course there’s the bed, and the sheets and towels, and so on. In the industry, we call it Furniture, Fixtures and Equipment (FF&E) and Operating Supplies and Equipment (OS&E). Simply put, FF&E is the big stuff, OS&E is the small stuff.

 

7 Key Areas for People Management in the Hospitality Industry in Africa

 

One of the major challenges we face in our industry is human capital development, particularly here in Africa. Imagine my delight at being invited to a workshop on Sustainable Tourism in Africa to reconsider employment and human capacity development for our region. For anyone working in this industry, this concern will always be in the forefront.

Indeed, I captured the title for this article from Professor Thomas Baum of the University of Strathclyde at a workshop I attended which was held in Johannesburg in September 2017 (By the way, the ‘P’ stands for people!).  A Newton Fund-sponsored event, tourism scholars from Kenya, Zambia, Zimbabwe, Nigeria, Ghana, South Africa and the United Kingdom all gathered together at the University of Johannesburg for a gruelling week of presentations and, of course, the statutory tour of the sights and sounds of the amazing city of Jozi!

One of the key ideas that came through from the workshop was the need to find home-grown solutions to the challenges facing human capital development in the tourism industry in Africa. Now this bedrock idea germinated into several mini-ideas in my mind, like what are the issues that exist within the people space in tourism? What do human resource directors identify as their main issues? What do the employees themselves think are their issues? Middle management? Owners and investors? Think about it, by considering the different perspectives each stakeholder group might have, we create a mine of data that could provide the very answers we seek.

My thinking is that before we proffer ready-made solutions for how things could be made better, we need to spend more time digging and getting to the root of the matter. Sub-Saharan Africa is currently the largest growth market for hotels in the world. We need to think how to bring our people up to scratch to support this growth. First stop, what do the HR directors think?

Early December 2017, I organised a focus group discussion with three human resource directors from international chain hotels in Lagos. They shared their experiences and gave first-hand insights into their HR concerns. We concluded that people management for the hotel sector needs to focus on seven core areas:

  1. coaching employees to transit from a “job” mind set to a “career” mind set;
  2. reworking employment benefits schemes;
  3. refocusing on training and development;
  4. recruiting and retaining talent;
  5. employing for diversity;
  6. managing the organisational climate; and
  7. the critical role of management.

Each one of these concerns is a challenge in its own right, but holds the key for putting the ‘P’ back in tourism!

So this basically sums up what will be the focus of the series of articles that I will be posting over the coming year.  Looking at these core areas, we will explore where we are right now in terms of human capital development, and what we need to do in order to get to where we need to be.

I end with a quote from one of the HR directors:

“You have to be on the shop floor, helping the people...you have your HR coordinators who do the nitty-gritty work for you. But you, the HR Director, you have to be on the floor with the people, talking to them, encouraging them!”

This promises to be an exciting exploration of the deeper perspectives.  Hold tight!

Belinda Nwosu

Terrorism is an unfortunate “fact of life” that has plagued society throughout the whole of the last two millennia. In recent years an increasing number of attacks, across a wider part of the world, have led to a changing dynamic in relation to the impact of such attacks.

In this research paper David Harper, Head of Property Services for Hotel Partners Africa, provides some unique research on the impact of such terror attacks, with the help of hotel trading statistics and analysis, carried out by STR.

The impact of terrorism on the hotel and resort market in Africa has been substantial over the last few years, making the need for careful analysis of the phenomena essential.

The research bears out the following 13, important conclusions, with some significant implications for how countries and the Travel & Tourism industry deal with terror attacks:

1.    The impact of terror attacks across the world is lessening

2.    There has been a marked rise in terror attacks in recent years

3.    The average casualty count has declined in recent years

4.    In general, international tourism is resilient to terrorism

5.    Recovery times for all types of locations are improving

6.    Recovery time depends on the profile and scale of the market place

7.    The impact of terrorism varies by political regime, income and tourism intensity

8.    The long-term impact depends on the public perception of safety and on the trust placed in the authorities in that location

9.    Political unrest has a longer-term impact than a terrorist attack

10. Frequency of attacks has a greater effect than the severity of an attack

11. The coverage in the media has an important impact on trading

12. The impact of an attack tends to be region-wide, so there is a financial imperative on neighbouring countries to try and stop any attacks being made on their neighbours

13. On average you are five times as likely to die by falling out of bed than you are to die as a result of a terrorist attack

For further information or for a copy of the full research paper, please contact David Harper at David.Harper@HotelPartnersAfrica.com

Long-dominated by the luxurious Sheraton Hotel, Addis Ababa is seeing a huge expansion in its hotel stock currently, with at least 1,250 mid-market to upscale new rooms actually under construction, and a further 800 to 1,000 in the planning stages.  The Sheraton, and the other branded hotel, the somewhat aged Hilton, are likely to be joined by Holiday Inn, Radisson, Marriott, Ibis, Novotel and Four Points in the very near future.

Driving this boom is a rapid emergence from Ethiopia’s dark years, and particularly greater confidence in the economy on the part of the large and successful Ethiopian Diaspora.  Addis Ababa is one of Africa’s primary administrative centres, the home of the African Union and the United Nations’ Economic Commission for Africa.  Ethiopia is an attractive country from an investor’s point of view, with its population of 77 million providing an inexpensive, well-educated and trainable labour force.  It is strategically located at the crossroads between Africa, the Middle East and Asia.

Agriculture is one of the country’s most promising resources.  The potential exists for self-sufficiency in grains and for export development in livestock, vegetables and fruits.  Agriculture employs 80 per cent of the work force, and accounts for half of Ethiopia’s GDP and 60 per cent of its exports.  Even though most production is at a subsistence level, large parts of commodity exports are provided by the small agricultural cash crop sector. Many other economic activities depend on agriculture, including marketing, processing and exportation.

Ethiopia’s economic growth averaged 8.6 per cent (source: OECD) between 2004 and 2006, driven by agriculture as well as expansion in industry and services. Other sources report economic growth of 10 per cent for the past two years.  The World bank is forecasting 9 per cent annual GDP growth to 2010.

Business and conference demand accounts for some 75 per cent of the total demand for hotel accommodation in Addis Ababa and, unlike many African cities which rely almost entirely on the commercial market, the city enjoys a high level of demand from the leisure sector, approximately 16 per cent of total demand.

Ethiopia is shaking off its negative images, and having some success in the specialist leisure market, particularly travellers looking for a unique combination of adventure, history, natural wonder and religion.  Addis Ababa boasts several historic sites, such as St Georges Cathedral and the Menelik Mausoleum, but it is in the north and the south of the country that the main attractions lie, including the Northern Circuit, taking in such wonders as the sunken churches at Lalibela, and the Rift Valley to the

south, a birding paradise.  With the increase in tourists coming through Addis Ababa, local entrepreneurs such as Tadiwos Belete of Boston Partners, and Sheikh Al Amoudi of Midroc are investing in eco lodges around the country, tapping into their own resources as well as the Diaspora.

In addition to demand from business and other visitors to the country itself, Addis Ababa’s new airport is attracting increasing numbers of transit passengers, with Ethiopian Airlines having one of the best hubs in Africa.  Troubles in neighbouring Kenya, and increasing crime at Johannesburg airport, have heightened the appeal of Addis Ababa as a transit hub.  This activity generates considerable demand for hotel accommodation, and Ethiopian Airlines, in partnership with Chinese investors, is planning a new hotel at the airport to accommodate that demand.

Passenger traffic at the airport grew at an average of around 20 per cent in the last three years (2004 to 2006, latest data available), and by 120 per cent since 2000; growth is forecast to be 13 per cent into the near future – Ethiopian Airlines will be the first in Africa to fly the new state-of-the-art Boeing Dreamliner.

For the country as a whole, international arrivals increased by 29 per cent in 2006 to almost 300,000, again more than double the 2000 figure.  Preliminary estimates for 2007 are for a significant further increase, due to the celebrations for Ethiopia’s Millennium.

Occupancies in Addis Ababa averaged around 80 per cent in 2007 and, with demand growth forecasts of 8 to 10 per cent annually, much of the future supply should be able to be absorbed without a problem.  As is so often found in markets such as this, the internationally-branded hotels will achieve higher occupancies and rates than the locally managed ones, with the exception of the small boutique hotels that find their special market niche.  The State-owned Ghion chain of hotels has been the subject of privatisation rumours for many years, and it is hoped that the government’s reluctance to do a deal to date will be overcome as more competition enters the market.

TOURISM AND HOTEL STATISTICS

International Traffic Movements at Bole

(Arrivals and Departures)

2000 2001 2002 2003 2004 2005 2006
Passengers 1,037,976 1,096,605 1,237,858 1,314,740 1,573,330 1,869,930 2,287,544
Growth (%) - 5.6 12.8 6.2 19.6 18.8 22.3
Source: Ethiopian Airports Enterprise

Addis Ababa

Ethiopian Airlines Scheduled Passenger Movements

Year Domestic International Ethiopian Total Bole International Total* Ethiopian Share (%)
2003/04 231,797 918,067 1,149,864 1,314,740 87.5
2004/05 253,037 1,186,754 1,439,791 1,573,330 91.5
2005/06 257,844 1,392,409 1,650,253 1,869,930 72.2
2006/07 257,282 1,730,932 1,988,214 2,287,544 86.9
Source: Ethiopian Airlines HQ/Ethiopian Airports Enterprise

* Calendar years 2004 to 2006

Addis Ababa

Transit Passenger Trends 2002  2006

2004 2005 2006
January 6,235 9,122 9,514
February 4,024 6,093 5,399
March 4,188 4,201 6,272
April 5,762 6,119 6,920
May 6,432 5,934 6,956
June 6,184 8,022 7,780
July 7,608 11,505 9,857
August 7,672 11,053 10,278
September 7,145 6,678 9,951
October 5,545 6,959 8,281
November 5,691 7,092 7,721
December 6,052 11,252 10,591
Total 72,538 94,030 99,520
Daily Average 198.7 257.6 272.6
Source: Ethiopian Airlines
Ethiopia

International Tourist Arrivals and Receipts

  Arrivals Growth (%) Receipts (US$m) Growth (%)
2000 135,954 - 62.8 -
2001 148.438 9.2 69.8 11.1
2002 156,327 5.3 73.5 5.3
2003 179,910 15.1 84.6 15.1
2004 184,078 2.3 107.7 27.3
2005 227,389 23.5 128.0 28.1
2006 290,458 27.7 138.9 8.5
Sources: Ministry of Culture and Tourism

Addis Ababa Tourism Commission

It should be noted, however, that tourism statistics in many countries, including Ethiopia, are open to question, due to the methodologies of collection.  It is likely that the data for 2002 and 2003 have been estimated, as evidenced by the same growth figures for arrivals and receipts in 2002 and 2003.  However, the general trend in arrivals is extremely positive, and matches the data gathered at the airport.  The data show significant increases from 2004 which coincides with the opening of the new Bole Airport Terminal. The Ethiopian Diaspora has also increased its traffic back to the country, as the country improves and is more conducive for inward investment.

Ethiopia

Monthly arrivals 2005-2006, Bole International Airport

Month 2005 2006 % change
January 15,029 26,360 75.3
February 13,419 21,185 57.8
March 15,070 21,984 45.8
April 18,992 24,062 26.6
May 14,602 25,105 71.9
June 20,619 26,102 26.5
July 21,354 27,770 30
August 22,039 25,765 16.9
September 25,537 25,005 -2.08
October 25,484 24,700 -3.07
November 16,513 22,515 36.3
December 18,740 19,995 6.6
Total 227,398 290,458 27.7
Source: Min Culture and Tourism

The diagram below shows data for purpose of visit in 2006, based on statistics provided by the Addis Ababa Tourism Commission:

 

Region of origin data of visitors to Ethiopia for 2006 are as follows:

Ethiopia

Region of Origin, 2006

Continent Arrivals %
Africa 89,923 30.9
Europe 76,466 26.3
North America 61,353 21.1
Middle East 30,556 10.5
Asia 28,033 9.6
Oceania 4,127 1.4
Total 290,248 100
Source: Addis Ababa Tourism Commission
Ethiopia

Inbound Tourists by Country of Residence

Country 2003 2004 2005 2006 Change

2003-2006

USA 26,399 28,112 32,282 43,610 65.2%
UK 8,919 10,627 11,254 16,076 80.2%
China 3,318 4,172 7,649 10,445 214.8%
Kenya 7,481 7,217 9,277 8,690 16.2%
Saudi Arabia 10,503 9,778 5,382 8,463 -19.4%
Italy 6,505 7,696 7,983 8,386 28.9%
India 4,276 4,616 7,125 7,975 86.5%
Germany 5,611 6,256 6,731 7,428 32.4%
Canada 5,013 5,169 8,396 7,349 46.6%
France 4,380 4,501 5,800 6,649 51.8%
Nigeria 3,850 3,415 5,524 6,513 69.2%
Sweden 3,153 3,336 4,342 6,337 101.0%
Israel 2,965 3,874 5,291 5,556 87.4%
Source: Min Culture and Tourism

A 2006 World Bank study of how to grow the tourism industry in Ethiopia highlighted a current lack of private investment and government dominance in the accommodation sector resulting in a lack of high quality accommodation and services. that study provided the following data.

Addis Ababa

Tourist Expenditure and Foreign Exchange Receipts

Purpose of Visit Numbers of Visitors Average Length of Stay Average Spend per Day US$ Average Spend Per Visit US$ Total Spend per Sector US$
Business 46,008 4.4 days 113.89 501.12 23,055,529
Vacation 63,246 8.6 days 123.56 1,062.66 67,208,994
Conference 16,385 2.8 days 109.80 307.44 5,037,404
VFR* 21,738 17.9 days 33.89 606.63 13,186,923
Subtotal 147,377 108,488,850
Not Stated 30,469 803.29 24,475443
Totals 177,846 656.22 132,944,293
Source: World Bank

*Visiting Friends and Relatives.

These data should be regarded as indicative only – they are collected from the forms completed on hotel check-in. Some guests do not complete the forms at all, and we understand where the field for purpose of visit is not completed, the compilers of the statistics record it as ‘other’.

Addis Ababa

Existing Hotel Supply - Published Rates

(including breakfast, excluding  10% Service Charge and 15% VAT)

Hotels of Primary Relevance Tariffs US$
Rooms Single Double Executive Single Executive Double Suite Single Suite Double
Sheraton Addis 295 375 420 425 470 795 795
Hilton Addis Ababa* 350 195 210 220 235 265 265
Ghion Hotel 190 69 85 110 - - -
Hotels of  Secondary Relevance Tariffs US$
Rooms Single Double Executive Single Executive Double Suite Single Suite Double
Hotel De Leopol 74 48 68 162- 213- - -
Atlas Hotel 67 70 80 80 - 150 -
Axum Hotel 64 50-66 60-66 66-90 72-90- 102 -
Imperial Hotel 63 66 84 - - 114 -
Ambassador Suites 52 - - - - 86-111 -
Global Hotel 55 75 - 101 - 127- -
Queen of Sheba 45 71 - 88 - - -
Source: W Hospitality Group Research

*the Hilton includes breakfast only in its executive room and suite rates

Addis Ababa

Roomnight Demand and Market Mix

(2007)

Market Sector Roomnights Market Mix
Business 173,453 49.7%
Conference 93,098 26.7%
Aircrew 4,576 1.3%
Airport related 22,269 6.4%
Leisure 55,314 15.9%
Total Demand 348,710 100.0%
Addis Ababa

Future Hotel Projects

Projects Rooms Status Estimated Opening Date
Jupiter Hotel 40 Near completion Q2 - 2008
Zenebat 80 Under construction 2009
Debrea Damo 80 Under construction mid-2009
Intercontinental (SIMEX) 151 Work stopped 2010
Sunshine 250 Studies in progress 2010
Emerald 168 Work stopped 2010
Sheraton (Extension) 200 Studies in progress 2010
Jupiter Hotel 2 102 Under construction 2010
Ibis 140 Under construction mid-2010
Novotel 100 Under construction mid-2010
African Union 200 Work commenced mid-2010
CATIC 325 Studies in progress 2011
Kenenisa Bekele 75 Site identified 2011
Four Points 200 Site identified 2012
Total 2,111
Source: W Hospitality Group Research

There are just over 2,100 new hotel rooms planned or under construction in Addis Ababa,.  However, some of these projects have been on the drawing board for years and most were supposed to have been completed in anticipation of the Ethiopian Millennium celebrations in 2007 - which has come and gone.

It is evident from observation on the ground in Addis Ababa that commencement of construction does not necessarily mean that the hotel will be completed on time, if at all.  Only time will tell whether all of the above hotels will materialise.  It is logical to assume that hotels such as the Ibis and the Novotel will proceed to realisation within the planned timeframe, as the promoters have financial substance.  Whether the same can be said of the other hotels under construction, such as the Simex and Emerald, is unclear.  What is clear is that the promoters were, for whatever reason, unable to meet their planned realisation date, and that must cast doubt regarding the future of the projects.

 

 

 

 

Trevor Ward

W Hospitality Group, Lagos

trevor.ward@w-hospitalitygroup.com

Tanzania is one of Africa’s rising stars, with economic growth of a healthy 6 to 7 per cent, and a working democracy.  Tourism is one of the main drivers of the economy, and the country benefits from its “twin” product of safari and beaches.  Both, in my opinion, are the best in East Africa, with the fabulous Northern Circuit and world famous Serengeti, and the beaches and history of Zanzibar and the mainland.

Investors from the Middle East are waking up to Tanzania’s great potential, with several headline investments in recent years.  One of the first major entrants to the market were the UAE’s Albwardy Group, which is the owner of the Kilimanjaro Hotel in Dar es Salaam, and the Zamani in Zanzibar, both operated by Kempinski.  Dubai-based Kingdom Hotel Investments were the next, purchasing the Mövenpick Hotel in Dar es Salaam, and soon after entering into a US$20 million joint venture investment with Kuwait’s IFA, also in Zanzibar.  Now Istithmar have arrived on the island, announcing a US$150 million resort there.

The Tanzanian government has given permission for further building in the Serengeti, with a planned expansion from the present 940 beds to 4,500.  Ten times the size of Kenya’s Masai Mara Park, the government believes that this expansion is sustainable, and essential if the increased demand for safari tourism is to be met.  Albawardy already have an investment there, again with Kempinski as managers.

Tanzania also has a tremendous opportunity for conference tourism, with excellent facilities in the northern city of Arusha, the gateway to the Northern Circuit, and the location of an international airport with daily flights from the Netherlands, Ethiopia and Kenya.  The Arusha International Conference Centre has already hosted many international events, and will host the 8th Leon Sullivan Summit in June 2008.

Few countries can boast the combination of excellent conference facilities as well as the opportunity for pre- and post-conference trips to world class leisure destinations such as Zanzibar and the Serengeti.  The famous Mt Meru Hotel in Arusha is now in private hands, and a joint venture between local and South African investors is poised to undertake a complete renovation, along with an expansion of the number of rooms and the conference facilities, in the coming months.  Albawardy purchased the former Hotel

77 in the privatization process, for redevelopment as a mid-scale hotel, and other investors are known to be looking at this market.

Tanzania has experienced almost a 30 per cent increase in arrivals since 2000, to approximately 650,000 in 2006.  Around one quarter of these were to Zanzibar, which is aiming for an increase to 500,000 in 2013.  Constraints to future tourism growth are air access and hotel capacity.  The potential arrival of SAA, Emirates and Qatar airlines into the Zanzibar and Arusha markets will ease the lack of transport, which should in turn promote further investment in hotel accommodation.

TANZANIA TOURISM DATA

Tanzania

International Tourist Arrivals and Receipts

  Arrivals Receipts (US$m)
2000 501,669 739.1
2001 525,000 725.0
2002 575,000 730.0
2003 576,000 731.0
2004 582,807 746.0
2005 612,754 823.1
2006 644,124 862.0
Source: MNRT, Tourism Department

The following chart shows the indexed growth in visitor arrivals in Tanzania, using

2000 = 100.


There is distinct seasonality in the arrival figures, as shown by the following chart:


The low months of April to June coincide with the rainy season, whilst the peak months of July, August, December and January coincide with the European and North American holiday seasons.

Of the total visitors in 2006, 56 per cent arrived by air, 41 per cent by road, and the remainder by rail and sea.  The figure for road arrivals includes visitors from the region, as well as long-haul travellers (from Europe and North America mainly) arriving by road from Kenya.

Eighty-one per cent of visitors to Tanzania are on vacation, and 11 per cent are on business, with 8 per cent “other”.

Actual country/region of origin data for 2006 are as follows:

Tanzania

Region of Origin, 2006

  Arrivals %
East Africa 248,031 38.5%
Central Africa 11,100 1.7%
Southern Africa 30,650 4.8%
Other Africa 3,659 0.6%
North America 68,877 10.7%
Other Americas 2,401 0.4%
Northern Europe 94,724 14.7%
Southern Europe 64,320 10.0%
Western Europe 60,663 9.4%
Other Europe 9,341 1.5%
Middle East 6,815 1.1%
East Asia/Pacific 28,222 4.4%
South Asia 15,321 2.4%
Total 644,124 100.0%
Source: GTB

The top five generating countries in Africa were Kenya, South Africa, Malawi, Rwanda and Burundi.  The top five generating countries in Europe were the United Kingdom, Italy, France, Germany and Spain.  The USA and Canada are important sources of visitors, with Japan, China and Australia important sources in Asia/Pacific.

It is estimated that at least 75 per cent of tourists (holidaymakers) to Tanzania visit the national parks in the northern circuit, with Arusha at its centre, and therefore the data on park entrances are of relevance.

Trevor Ward

W Hospitality Group, Lagos

trevor.ward@w-hospitalitygroup.com

In today’s global village, there is increasing pressure for differentiation. There was a time when hotel chains prided themselves on the uniformity of their properties – “anywhere in the world, you’ll know that you’re in one of our hotels” – sure, but where in the world am I!

I have been travelling around various African capitals in recent months, and it strikes me that, whilst most developers are talking about constructing new 5 star hotels, they seem to be missing an opportunity in the market, that is the extended-stay hotel.

I have written in previous editions about the interest that the international hotel chains are showing in Africa, seeking to expand their network in the face of increasing demand for hotel accommodation and other services.

Affiliated to

Plot 10, Ayo Babatunde Crescent, off Oniru Market Road, Lekki Phase 1, Lagos, Nigeria
+234 (01) 295 6236
info@w-hospitalitygroup.com

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