As international hotel brands build their presence in
Africa, Marriott International is nearing an agreement to acquire the continent's
largest native chain, a move that would nearly double its current distribution
there.
Several major brands during the past few years have signed
projects in key African cities, many of which have a nascent business travel
population and few or no hotels under flags familiar to Western travelers. As
of the beginning of 2013, international and regional chains had more than 200
hotel projects totaling about 40,000 rooms in the development pipeline,
according to W Hospitality Group's 2013 Africa Pipeline Study.
Hilton Worldwide and Carlson Rezidor in particular have "invested
heavily" in development offices in Africa, the report noted, and the two
companies as of the time of the report led in terms of rooms under development.
The Hilton flagship brand and Radisson Blu each had 17 African hotels under
development at the beginning of the year, about three-quarters of which were in
some stage of actual construction.
Development particularly has blossomed in Sub-Saharan
Africa. Of the hotels under development, 130 projects—about 21,000 rooms—were
in the region, compared with 77—almost 19,000 rooms—in North Africa. The
Sub-Saharan pipeline was up 23 percent year over year, while the North African
pipeline was up 9 percent, according to the report.
Deals have continued to roll in this year. Just last month,
Starwood's Sheraton brand announced agreements to build the first
internationally branded hotels in Juba, South Sudan, and Nouakchott,
Mauritania, as well as a hotel in Conakry, Guinea. Sheraton also has properties
under development in Dakar, Senegal; Annaba, Algeria; and Tripoli, Libya.
Including those projects, Starwood plans to open 15 new hotels in Africa during
the next five years, increasing its current portfolio by 30 percent.
Midprice hotel chains also are looking for opportunities in
the region. Best Western International this summer added three hotels in
Nigeria and Ghana and has five hotels under development in West Africa.
Marriott International last month announced a move that
would leapfrog it past its competitors in the region: a pending agreement to acquire South Africa-based Protea Hotels. Marriott has signed a letter of
intent with Protea Hospitality Holdings to acquire Protea's three brands,
totaling 116 hotels with 10,184 rooms. Eighty of those hotels are in South
Africa, with the rest in Malawi, Namibia, Nigeria, Tanzania, Uganda and Zambia.
The combined portfolio and pipeline of Marriott and Protea—which consists
largely of the upper-tier Protea Hotels brand, along with two hotels under the
lifestyle Protea Hotel Fire & Ice brand and 10 under the luxury African
Pride Hotels brand—would give Marriott the largest presence in Africa of any
hotel company, according to the company, which plans to maintain Protea's
existing brands.
Marriott and Protea expect a definitive agreement to be
signed by year-end and the transaction to close in early 2014. Terms of the
deal were not disclosed.
Speaking in November at an event in New York for Marriott's
Autograph brand, Marriott CEO Arne Sorenson called Africa one of the "world's
great development areas" for hoteliers.
"For the first time since independence swept Africa 50
years ago, we're seeing good governments in a number of places, we're seeing
economies grow and we're seeing the size of the middle class grow," he
said. "We're excited about getting much more broadly into Africa in one
fell swoop."
Marriott also plans to continue building its own brands in
Africa. Sorenson said the company's been working on about a dozen deals,
including hotels scheduled to open in Ghana and Rwanda late next year.
Despite the growing pipelines, building hotels in the region
continues to present challenges, according to Marriott International president
for the Middle East and Africa Alex Kyriakidis. "The development cycle for
opening new hotels in Africa is typically long, due to the challenges posed by
emerging infrastructure," he said in a statement.
Even so, W Hospitality Group's reported ground-up
development is poised to continue, with "five hotel funds currently active
in Africa and others being established, seeking acquisition and new-build
opportunities. In addition, several international construction companies from
Europe, the Middle East and elsewhere are eying the market, bringing
construction finance with them."
This report
originally appeared in the Dec. 16, 2013, edition of Business Travel News.