Africa now ranks among the fastest growing economic regions in the world, according to a recent report (June 2011) by the McKinsey Global Institute. The hotel sector reflects this exciting trend with established and international brands and developers entering the marketplace and developing their opportunities with long term growth prospects, including: Hilton Worldwide, Marriott International and The Rezidor Hotel Group. Recent construction pipelines indicate that there are over 190 planned hotel projects in planning and development, with combined guestrooms totally over 37,000, the most popular locations are Morocco, Nigeria and South Africa. The continent’s real GDP rose by an average of nearly 5% per annum over the last decade and with the collective GDP of $1.6. Trillion (in 2008) is now roughly equal to Brazil or Russia, reflecting the flourishing growth in sectors including: telecoms, banking, retail and construction with impressive increasing foreign investment.
Examples of recent planned hotel developments and openings include:
• Hotel operator Monte-Carlo SBM has teamed up with developer Aerium Atlas Management (part of the Aerium Group) to develop a 34.5 acre site in the Menara district of Marrakech: the £120m Jawhar Resort, Spa and Private Residences.
• Rocco Forte Collection is launching a new five-star 90 all suite room hotel, golf and spa resort – the Assoufid Resort in Marrakesh, with the North Africa Holding Company. Rocco Forte will also be managing the 275-room Shepheard Hotel in Cairo with The Egyptian General Company for Tourism and Hotels (EGOTH) to launch in 2013.
• Jumeirah Group is developing the Jumeirah Gamsha Bay Resort in Egypt, a luxury 250 room hotel on the mixed-use development of Palm Gamsha.
• Sofitel Luxuy Hotels will open its second location in Equatorial Guinea, on Bioko Island in Africa, the Sofitel Malabo Sipopo Le Golf – featuring 200 luxurious rooms.
• The Rezidor Hotel Group has recently announced the planning of its 7th hotel in Nigeria, The Park Inn Lagos, Apapa featuring 125 rooms and set to open in 2013. Rezidor has the largest pipeline in Sub-Saharan Africa with new openings planned in Addis Ababa, Ethiopia, Zambia, Rwanda and Mozambique.
• Taj Hotels is set to launch the Taj Palace Marrakesh, later this year, following on from the successful opening of the Taj Cape Town in 2010.
• Sol Melia is set to open a new hotel on the island of Zanzibar in Tanzania, the Melia Zanzibar – a 5 star holiday resort and following the inauguration of its first hotel in Cabo Verde. The company has 6 hotels on the African continent, with 4 in Egypt.
Providing a unique insight and overview into the opportunities available, Bench Events is organising the inaugural Hotel Investment Conference in Africa (HICA) taking place in Casablanca (26th and 27th of September) and already attracting delegates from around the world interested in benefiting from the networking opportunities, a programme of seminars and sessions with a list of influential speakers which will educate potential investors and developers and raise awareness to optimise the opportunity of sustainable development of the hospitality industry on the African continent.
As further outlined in the McKinsey report, the rate of return on foreign investment in Africa is higher than in any other developing market (from $9 billion in 2000 to $62 billion in 2008) and providing early entry adopters the chance to develop their own markets and establish brand presence and profile whilst shaping the future economic climate and promoting new levels of tourism (both domestic and international).
The World Travel Organisation has recently forecast that in-bound tourism (to Africa) will increase over 50% from 2010 to 2020 while Africa’s combined consumer spending is now $860 billion and set to continue to grow. A recent Financial Times article (published following the World Economic Forum 2011 in Africa) reported that more than 10 African economies are forecast (by the African Development Bank) to grow at more than 7 per cent this year. Finance experts use the returns achieved by the World Bank’s International Finance Corporation (IFC) as a good guide to what is possible. From 2000 to March 2010, the IFC saw a return of almost 22 per cent a year on its African private equity portfolio, higher than for any other emerging markets region – a trend experienced by many of the large investment funds.
