Ghana, one of Africa’s smaller countries, ranked 31st in terms of area and 12th in terms of population, is certainly punching above its weight when it comes to investment in the hotel industry. Unlike many countries, where hotel development is focused almost entirely on the capital city, Ghana is seeing investment in a number of other destinations, as well as in Accra.
It doesn’t seem that long ago that Accra was a sleepy, highly attractive alternative to the noise and chaos of Lagos, and we would visit for the weekend, or extend business trips beyond Friday night, to enjoy the slower pace of life there. Today, Accra’s traffic can be truly “’orrible!”, certainly rivalling anything that Lagos has to offer! And there are construction cranes everywhere, in and adjacent to Airport City, as well as downtown Osu and Ridge, and in the stretch in the middle. Even the beach is seeing residential and other towers going up.
A lot of this is attributed to (or, some would say, blamed on!), Big Oil, which came to town and stayed once the Jubilee Field was proved to be viable. Production commenced in late 2010, and has yet to peak.
But note that Ghana’s economy was growing at between 6 per cent and 8 per cent annually before oil production contributed to a spike of 14 per cent in 2011. In 2008, the last “normal” year before the start of commercial oil production (2009 and 2010 were affected pretty much continent-wide by the global financial crisis), Ghana was in the top 5 of non-oil African countries in terms of GDP growth. Unlike many oil-producers, Ghana has several other viable sources of growth and jobs, including mining (gold), agriculture (cocoa) and services (finance, tourism).
Accra, the political and commercial capital, and the main entry point by air, has seen the majority of investment in new hotels to support, and contribute to, Ghana’s growth, benefiting from the boost from the new oil and gas industry, and from the diversified economy. The latter, particularly an increase in activity in manufacturing and services, is vitally important in order for the hotel sector to thrive and grow.
One of the newest hotels in Accra is the 260-room Mövenpick, which opened in 2011. Owned by Kingdom Hotels Investments, the hotel is on the site of the former Ambassador Hotel, and is the largest hotel in Accra. With two full years of trading under its belt, management have focused on the average daily rate, and whilst its
average occupancy is below the market average, its average room rate is some 20 per cent above its nearest competitor, and its RevPAR is 10 per cent higher.
But the Mövenpick is no longer the newest game in town, that slot was taken by African Sun’s Amber Hotel in Airport City, which opened (finally!) in late 2013. This is one of those rarities in West Africa, a hotel which the operator has leased from the owner. The hotel has sat there, apparently completed, since mid-2012, but with one severe problem – the tenant (African Sun) was, I am reliably informed, not able to finance the purchase of the furniture! Today the hotel is still not entirely open, with only around 100 of the total 200 with beds and curtains!
Future openings in Accra include the 267-room Kempinski Hotel, on the site of the former racecourse, and the 209-room Marriott. Both hotels have been under construction for several years, and although opening of both is slated for 2014, I’ll believe it when I see it! Certainly opening before them is Louvre Hotels 104-room Tulip Inn in South Legon, close to the Accra Mall. This is Royal Airport Hotels’ former Travel Express Hotel, which was sold a while back to raise funds for other projects.
There are several other planned hotels in Accra – I’m aware of potential developers talking to Hilton, Hyatt, Radisson Blu, Park Inn, City Lodge and others, but nothing yet signed. Even Hong Kong-based Shangri La, a deluxe hotel and resort brand, list a potential new hotel in Accra on their web site!
Is there a danger of oversupply? There’s always a danger of oversupply! It happens in any market from time to time, but the likelihood in Accra is, in my opinion low. Look at how long it has taken the Kempinski and the Marriott to – well, not open. Both have been under construction for some years, and this has become established as the norm, not the exception. If both open at the same time, say at the end of 2014, there will be indigestion for a while whilst they are absorbed, but currently there is nothing else under construction of any note, so they and other hotels will benefit from increasing demand (as the economy continues to grow) and as nothing else enters the market. And many would say that the shortage of rooms at certain times of the year means that the city is unable to accommodate the larger conferences and other events which want to hold there.
Royal Airport Hotels were mentioned above as the seller of the Travel Express Hotel – they are also the owner of the highly successful 168-room Holiday Inn in Airport City – surely the only airport hotel ever to turn away aircrew demand because they could fill the hotel with business travellers?! Patrick Fares, owner of Royal Airport Hotels, recognised the potential of Takoradi some years ago and acquired the former Atlantic Hotel there, which he has now renovated and extended to be a 150-room Best Western Plus Hotel, opening this year, and vying to be the first internationally-branded hotel in Ghana’s oil capital with the 100-room Protea Hotel, under construction there.
Takoradi is the centre of the oil and gas industry, Ghana’s “Port Harcourt” so to speak. The port there is one of the centres for the export of cocoa, and there are plans by Chinese construction firm Huasheng Jiangquan Group to invest over US$2 billion to develop an industrial park in Shama, creating some 5,000 jobs. This is part of the Government of Ghana’s drive to develop Takoradi and the Western Region, and follows Lonrho Ports’ announcement of an investment to develop a free port close to Takoradi.
Up in Tamale, in the north of Ghana, Ganaa Hotels Ltd. is currently building a 110-room hotel, due to open this year, and are in advanced discussions for it to be branded as a Best Western Plus, giving the chain a “triangle” of three hotels in the country (Accra, Takoradi and Tamale).
Nothing concrete yet, but investors are known to be looking at Tema, Ghana’s eastern port close to Accra, and at Kumasi. One such investor is the New York and Accra-based BGI, who are primarily planning to develop retail malls, initially in Accra, Tema and Kumasi, and who recognise the synergy between retail and hotels. They are currently seeking brands who will join with them in these developments.
Outside the urban centres, there is interest in resort properties, catering to the leisure and conference markets. The newest opening is the 84-room Royal Senchi Hotel close to Akosombo, close enough to Accra to be easily accessible, but far enough away to generate weekend and other short-break leisure traffic. There is also growing interest in Ghana’s coast, with interest in the Gomoah Fetteh area, where the world-class Whitesands resort is located, and in Ada, where the River Voltga meets the Atlantic Ocean.
Ghana has always been regarded as “Africa-lite”, an attractive destination to do business and for leisure trips. And, despite Accra’s “go-slow” traffic these days, it remains one of Africa’s success stories. I believe we will see new hotel deals signed in 2014, adding to the existing properties, and adding to Ghana’s attractive tourism offer.
W Hospitality Group, Lagos