iNTERNATIONAL and
regional hotel brands
are moving into Africa,
changing the landscape
and becoming formidable
competitors to longstanding
hotels.
Earlier this year, a report
from W Hospitality Group
found the number of
planned hotel rooms in
Africa was up 30% on last
year.
Both Wayne Troughton,
ceo, Hospitality & Real
Estate Consulting at HTI
Consulting, and Lee-Anne
Bac, director of Grant
Thornton Johannesburg,
say the interest from
international brands is
driven by the growth in
Africa. Lee-Anne says hotel
development tends to track
economic development.
According to Wayne, some
countries in Africa have
seen annual GDP growth
of 6% and 7%, with some
seeing even 9% growth.
Wayne says there are 41
international brands that
currently have an interest
in entering Africa. He says
10 years ago, when looking
at operator selection
for new developments,
the firm was lucky to get
interest from three or four
brands. He adds that many
other brands, including
those from the Far East
and Middle East, are also
coming into Africa.
Hotel brands can quickly
move into new destinations
by signing management
contracts, says Wayne. “If
someone has the capital
to build a hotel [the hotel
brand] is not taking that
commercial risk.”
According to Lee-Anne,
new brands entering Africa
are serious competitors
to existing properties.
She explains that many of
the hotels in Africa have
ageing infrastructure and
international brands are
coming in with new hotels.
Lee-Anne and Wayne
point out that global
brands are also
internationally known and
therefore come with a
customer base that wants
the security of knowing
it can rely on a certain
standard from a particular
brand.
International brands can
also leverage their loyalty
programmes, says Wayne,
with loyalty programmes
accounting for between
5% and 52% of their
revenue. He adds that the
spend of guests on these
programmes is far greater
than that of other guests.
Wayne says within the
five-star segment, the
entry of international
brands on the continent
will be a game changer.
However, he also says
international brands will
find it challenging to
enter the three- and fourstar
segment as existing
local brands – typically
dominated by domestic
travel – are strong in these
segments.
