Global brands scramble for African market

The Dubai-based company manages hotels directly for owners and leverages its in-depth market knowledge and extensive experience of working with the world’s largest hotel companies to generate superior returns for hotel owners.

Thomas Emanuel, the Business Development Director at STR revealed during the Africa Hotel Investment Forum held in Addis Ababa, Ethiopia, on Sept. 24 that the leading hotel’s scramble for the African continent is attributed to the fact that there has been low hotel room supplies.

“There were no enough rooms in these cities particularly from international brands compared with particularly developed part of the world,” he said.

“There is a growing middle class, growing connectivity, growing economies across various markets, available of natural resources and inflow of Foreign Direct Investments on the continent, and the global brands wants to be in these markets because they see opportunities for growth.”

However, approximately 17 cities including Nairobi, Durban, Cape Town, Windhoek, Johannesburg, Abuja, Lagos, Accra, and Casablanca are experiencing a medium room occupancy rates of 50-65% due to high hotel supplies.

Kampala, Kigali, Lusaka, Victoria Falls, Bamako and Conakry have room occupancy rates of below 50%.

On the other hand, Mauritius, Cape Verde, Cairo, Seychelles, Alexandria, Marrakech, Dakar, Agadir are experiencing high room occupancy rates above 65%.

In terms of rates, cities such as Seychelles, Mauritius, Addis Ababa, Khartoum, Abuja, Accra and Marrakech are fetching higher average daily room rate of US$150 compared with other cities on the continent.

Kampala, Nairobi, Kigali, Dar es Salaam, Lagos, Conakry, Casablanca and Cairo hotel facilities are fetching between US$101 and US$150 average daily room rate.

However, Durban, Johannesburg, Windhoek, Cape Verde, Agadir and Alexandria are fetching an average daily room rate of below US$100.

Revenue per available room (RevPAR), which is calculated by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate, has sharply declined in Kampala, Nairobi, Dar es Salaam, Victoria Falls, Mauritius, Casablanca, Algiers, Khartoum and Abidjan, owed to a combination of factors including high hotel supplies, insecurity, mineral discoveries , among others in various markets.

KEANE forecasts 700 new hotel restaurants and bars in Africa

Meanwhile, a new study by the food and beverage (F&B) strategy & design firm KEANE, forecasts that 700 new hotel restaurants and bars will be opened in Africa by 2025, in internationally branded hotels.

The prediction is based on KEANE’s research into 410 F&B venues across the 100 internationally branded hotels in the major 10 cities in Africa and W Hospitality Group’s authoritative hotel development pipeline report.

Stefan Breg, Group Strategy Director of KEANE said: “Over the last 70 years, the restaurant market internationally has been built on three factors; growing towns and cities, broad distribution of income and a growing middle class. When you take into account that the anticipated rate of urbanization, expected across Africa, will outpace India and China in the next 25 years, Africa will become one of the world’s most vibrant dining scenes.”

He said Africa’s hotels could follow different routes forward for F&B. First, the European/North American model of 2-3 F&B venues per hotel with F&B playing a secondary role to the marketing of rooms.

The alternative was the Middle Eastern/Dubai model of four or more venues, a proportion of which, are operated in association with third parties; a scenario where F&B plays not only a strategic role but also a significant source of income.
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