Marriott International is negotiating an agreement to
acquire Cape Town, South Africa-based Protea Hotels, a move that would nearly
double its current distribution on the continent.
Marriott on Thursday announced that it 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 would give Marriott
the largest presence in Africa of any hotel company, according to Marriott.
Marriott and Protea expect a definitive agreement to be signed
by the end of this year and the transaction to close in early 2014. Terms of
the deal were not disclosed.
Speaking on Thursday in New York at an event 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. Building hotels in
the region, however, continues to present challenges to hoteliers.
"The development cycle for opening new hotels in Africa
is typically long, due to the challenges posed by emerging infrastructure, so
joining forces with Protea Hotels and their highly respected management team is
the strongest way to jumpstart Marriott's footprint in Africa," Marriott
International president for the Middle East and Africa Alex Kyriakidis said in
a statement.
Protea's portfolio consists largely of the upper-tier Protea
Hotels brand as well as two hotels under the lifestyle Protea Hotel Fire &
Ice brand and 10 under the luxury African Pride Hotels brand.