AccorHotels deal puts it, and Africa, suites ahead

26 June 2016 - 02:00 By BRENDAN PEACOCK

Now the largest operator by number of rooms on the continent, AccorHotels has signed a management contract for 50 hotels in Angola that are expected to be built by 2017 in partnership with local Angolan company AAA Activos.Gillian Saunders,Grant Thornton's global leader for the travel, tourism and leisure industry, said that even though economic growth in sub-Saharan Africa had tailed off mostly because of the commodity price slump, there was still an undersupply of branded hotels in Africa, hence the continuation of the "rush for Africa" narrative.story_article_left1She said hotel chains were banking on a continuation of the trend where new, internationally-branded hotels can set up shop in new territories and siphon business from existing independent operators.The undersupply of quality branded hotel rooms has meant chains are able to charge "very strong room rates" where there is not yet stiff competition."That helps make the equation work. The trick is finding local partner investors."Typically, most international hotel operators sign management agreements with property owners or developers, which limits their risk exposure. This aversion to taking much actual equity also limits the amount of foreign direct investment.Nevertheless, Saunders said, most governments - and particularly city authorities - were "neutral to positive" on the announcements of so many international hotel entrants, presumably because they bring job creation and secondary spending to the cities.A rush of announcements of hotel deals does not mean doors will certainly open, either. Deals can be caught up in red tape for years, while disagreements between local partners and international operators can stall development.But Saunders said most international operators tended to follow through.block_quotes_start Together, Nigeria and Angola account for nearly a third of all hotels in the pipeline                                        block_quotes_endAccording to the W Hospitality Group's "Hotel Chain Development Pipeline in Africa" report, compiled by Lagos-based Trevor Ward and released in March, the continent remains attractive to hotel operators - particularly Nigeria, Angola and Zambia, even though their economic dependence on commodities means growth has been slower than in some other African territories.The report contains data from 36 hotel groups operating 86 brands in Africa and shows that pipeline development is up 30% on last year. Ward said STR, the global hotel data provider, put the global average in the past year at a 10% increase.Sub-Saharan Africa showed a 42.1% increase in the number of hotel rooms in the pipeline, with the AccorHotels deal having a big impact on these figures.story_article_right2As recently as 2011, planned growth in North Africa was 25% higher than that of sub-Saharan Africa, but the picture has changed significantly, with proposed schemes in North Africa in the past year languishing at 7.5%.Within sub-Saharan Africa, West Africa has the lion's share - 45% - of hotel rooms in the pipeline, with 26% in Southern Africa, 24% in East Africa and 5% in Central Africa. Nigeria leads the way with 61 planned hotels and 10222 rooms, followed by Angola with 56 hotels and 7560 rooms. South Africa is in ninth position with a proposed 11 hotels and 2058 rooms.Together, Nigeria and Angola account for nearly a third of all hotels in the pipeline.Fourteen countries reported no signed deals in the last year, including Lesotho, Malawi and Zimbabwe.AccorHotels's Ibis Styles brand has the most hotels on order, with 28, followed by Radisson Blu with 25, Mercure with 24 and Hilton with 16. Radisson has the most rooms in the pipeline with 5693, ahead of Hilton's 4851 and Ibis Styles's 3822.peacockb@sundaytimes.co.za..

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