2018 Hotel Chain Development Pipelines in Africa It is with great pleasure that we present the 2018 edition of our annual Hotel Chain Development Pipelines in Africa. This is our 10th edition, and we present it with a sense of achievement and pride, as we have been instrumental in documenting with some accuracy the development activity of the hotel chains, hotel owners and investors in Africa over the past decade, at least that activity which is associated with one of the chains.
It has been a positive story, and we are proud to be closely involved with it – in addition to the research work carried out for this report, we have provided professional advice to several of the projects that are included in the data.
For ten years, we have been quantifying the hotel development activity in Africa at country, regional and city levels, and our detailed analyses provide useful information for investors, governments, hospitality and real estate professionals, students and other interested parties.
This 10th edition of our annual survey has a record 41 international and regional contributors, reporting pipeline activity of just over 76,000 rooms in 418 hotels, a 14 per cent increase on the 2017 pipeline. Hotel development activity in Africa has come a long way in ten years, and the pipeline has grown from 29,692 rooms in 144 hotels in 2009 when we first started, to 76,322 rooms in 418 hotels today.
Africa continues to present considerable opportunities for the discerning investor. According to the World Bank, six of the world’s fastest growing economies in 2018 are in Africa, Front Page: and of these, three (Ethiopia, Senegal and Marriott Tanzania) appear in the top 10 countries by Cape Town rooms and pipeline status in this report. Corinthia Hotel 94 deals were reported to have been signed Khartoum since the beginning of 2017 to now, up on the
2 Hotel Chain Development Pipelines in Africa 2018 Foreword
2016 total of 86 deals. 2017 was a relatively good allow the hotel industry to expand its provision year for many countries in Africa, taking into of quality service and great guest experiences consideration the macroeconomic adjustments to a wider range of people. Midscale hotels are necessitated by the low price of oil and other “easier” (and faster) to build, and less expensive commodities, and the resultant cutbacks in to develop. government expenditure. Africa continues to show its resilience, and the continent is Our annual report on hotel development expected to grow by 3.5 per cent in 2018, activity in Africa has become acknowledged as according to the African Development Bank. the most authoritative source on the growth of the hotel industry in Africa. We are delighted to Marriott International once again leads the have the continuing opportunity to be closely hotel chain development pipeline in terms of involved in the African hotel success story. number of rooms and number of hotels. But as well as the global giants, we have also been We are extremely grateful to the hotel chains able to include more African hotel chains as who contributed to our report this year, both contributors this year, and are especially pleased those stalwarts who provide their data every to welcome those contributing to our report for year, and those new to the survey in 2018. A full the first time, such as Latitude and Verde. We list of the contributors to this report is provided also welcome international chains who are new in Appendix 1. contributors to the pipeline report: The Ascott, Kerzner International and RIU Hotels & Resorts. A special thank you goes to the hotel chain executives who responded to our request As well as the data, our report contains insights for commentary on the hospitality industry, from senior development executives in the hotel as quoted throughout this report; they have chains on their outlook for 2018, and which provided very interesting insight into the provide information on the internal strategic development potential of Africa, and their considerations that affect pipeline activity. activity there.
As we have now been collecting data on the Should you have any comments and questions pipeline for 10 years, we present in this report on the report, then please do get in touch. a comparative analysis, to show by how much hotel development activity has grown in the past decade. The pipeline in Africa has grown by 148 per cent since 2009, mainly focused on Trevor J Ward the chains’ upscale, upper upscale and luxury Managing Director brands, which in 2018 make up fully 80 per W Hospitality Group cent of the total pipeline. There remains a clear Lagos, Nigeria gap in the market for the entry of budget and May 2018 midscale brands, positioned to cater for the rising volume of intra-Africa travel, as well as to growing numbers of domestic travellers.
The chains typically seek to enter a country with their flagship brand, mostly upscale or above, before opening a budget or midscale brand hotel. This move into other categories will
3 Hotel Chain Development Pipelines in Africa 2018 Best Western Nairobi
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4 Hotel Chain Development Pipelines in Africa 2018 Foreword from Bench Events
Congratulations to W Hospitality Group for The 9th edition of AHIF will take place at the another excellent publication, providing the Radisson Blu, Nairobi from 2-4 October 2018 industry with intelligent insight into the pipeline and we are delighted to be returning to Kenya, activity of the main hotel players in Africa. It is where we are working closely with the Kenyan only through such knowledge and transparency Ministry of Tourism & Wildlife, and the Tourism that the industry can execute their strategic Finance Corporation. There are a number of plans for growth. With year-on-year double- events taking place in the first week of October digit growth in the number of deals signed including the Magical Kenya Tourism Expo. by the chains, Africa is today regularly spoken Kenya’s Head of State, President Uhuru Kenyatta, about in the corporate boardrooms of power, will launch both events publicly on the morning and those global companies not investing their of Wednesday October 3rd at a ceremony at the time in this burgeoning market are missing out Kenyatta International Convention Centre. on the opportunity of a lifetime. For more information on AHIF 2018 and to Marriott’s surge to the top of the African register as a delegate visit: rankings is a case in point. Having almost no www.africa-conference.com. presence on the continent just five years ago, and nothing in sub-Saharan Africa, they are by far the biggest bigger player in Africa now, through a combination of acquisitions – of About Bench Events Protea in 2014 and Starwood in 2016 – and Bench Events delivers outstanding conferences focused development effort, all driven from the for the hospitality industry for delegates to very top of the organisation. learn, to network and to do deals – like those deals featured in this report. Our conferences We are the organisers of the Africa Hotel also aim to raise awareness for our industry Investment Forum (AHIF), and the pipeline as a leading contributor to economic growth, report and the detailed findings are always employment and prosperity in Africa. one of the featured sessions at AHIF, with Trevor Ward presenting the results of his company’s research. These findings provide a Jonathan Worsley solid background to some of the debates that Chairman, Bench Events follow, as the chains and investors discuss their www.benchevents.com future plans for Africa.
Trevor will be joined by Chris Nassetta, CEO of Hilton; Cedric Guilleminot, CEO of African operator Onomo Hotels; financier Ilaria Benucci of CDC, an investor in the industry; and conservationist Dr Max Graham of Space for Giants, to name but a few. AHIF is attended by the highest calibre international hotel investors of any conference in Africa. It connects business leaders from the international and regional markets, driving investment into tourism projects, infrastructure and hotel development across the continent.
5 Hotel Chain Development Pipelines in Africa 2018 Table of Contents
Foreword by Trevor Ward...... 2
Foreword from Bench Events...... 5
Methodology...... 7
2018 Research Findings...... 10
Section 1: Regional Summary...... 11
The African Hotel Industry in 2017...... 19
Africa in the Global Hotel Industry...... 22
Section 2: Hotel Chains and Brands...... 24
Expectations for 2018...... 30
Section 3: Status of Hotel Development Activity...... 32
Appendices...... 41
About Us...... 54
6 Hotel Chain Development Pipelines in Africa 2018 Methodology
Our report covers the 54 countries in Africa, including North Africa (Morocco, Algeria, Tunisia, Libya and Egypt), sub-Saharan Africa and the Indian Ocean islands, and provides consistent, reliable and comparable data on the development pipeline activity of the hotel chains who are operating in, and those who are seeking to enter for the first time, Africa.
This report has been compiled from the data on signed deals provided to us in early 2018 by 41 regional (African) and international hotel chains. To be included in this report, Africa-based chains need to operate in more than one country on the continent, and the international chains in more than one country globally. We do not, therefore, include hotel chains which are domestic, i.e. operate in only one country. In addition, the deals need to be legally-binding management, franchise or other agreements (some of the chains are owner-operators) which state the intention of the parties to open a hotel at a date in the future. Deals at the stage of an MOU, which are “hoped-for” (whether or not they are under construction), are not included. The data have been analysed in several ways, including by region, by country, 41 by city, by hotel chain and by brand. This provides several permutations with chains which to understand the pipeline activity in Africa. The status of each project has been assessed, differentiating hotels that are in the pre-planning stage (i.e. still on paper) from those that are on-site, in the construction phase. “In construction” is a phrase that needs some explanation, however – it means that work has started on site, but there are many projects where work has been suspended for some time (in a few cases for several years). Whether or not they will ever materialise is a moot point, but they remain as deals in the pipeline.
The comparative figures shown in our analysis for 2017 are not the same as those shown in last year’s report - the mega-deal signed by AccorHotels for 50 hotels in Angola has fallen away, and we have therefore rebased previous years’ data to account for this.
This year we have a record 41 contributors, and are pleased to welcome as new participants, amongst others Ascott, Kerzner, Latitude and Verde. Appendices1, 3 and 4 list all the hotel chains, and their brands, that participated in our survey this year, and details of their individual development activity in Africa.
If you would like to participate in our survey, and meet the criteria stated above, then please do get in touch. 111 Brands
7 Hotel Chain Development Pipelines in Africa 2018 Azalaï Hôtel Abidjan
8 Hotel Chain Development Pipelines in Africa 2018 List of Tables and Charts
Tables Table 1: Regional Summary...... 11 Table 2: Regional Summary: 2009 to 2018 Comparison...... 11 Table 3: Countries in the Pipeline by Sub-Region...... 12 Table 4: Countries with no Pipeline...... 13 Table 5: Top 10 Countries by Number of Rooms...... 14 Table 6: 2009: Top 5 Countries by Number of Rooms...... 15 Table 7: Top 10 Brands by Number of Planned Hotels and Rooms...... 24 Table 8: Top 10 Chains by Number of Planned Hotels...... 25 Table 9: Top 10 Chains by Number of Planned Rooms...... 26 Table 10: 2009: Top 5 Chains by Number of Planned Rooms...... 27 Table 11: Hotel Openings 2017...... 28 Table 12: Top 10 Chains: Pipeline vs Existing Hotels in Africa...... 29 Table 13: SSA vs. North Africa by Pipeline Status...... 32 Table 14: Top 10 Countries by Pipeline Status...... 32 Table 15: 2009: Top 5 Countries by Pipeline Status...... 33 Table 16: Top 10 Brands by Pipeline Status...... 33 Table 17: Top 10 Chains by Pipeline Status...... 34 Table 18: Years the Deals Were Signed – Number of Hotels...... 35 Table 19: 2015-2017 Scheduled vs. Actual Hotel Openings...... 36 Table 20: Anticipated Opening Years of Pipeline Deals...... 36 Table 21: Anticipated Opening Years of Pipeline Deals – Onsite Construction...... 37
Charts Chart 1: Regional Summary...... 12 Chart 2: Sub-Saharan Africa Sub-Regional Breakdown (Rooms)...... 13 Chart 3: Top 10 countries by number of planned rooms and their average size...... 15 Chart 4: Top 10 Countries by Number of Planned Rooms 2016 -2018...... 16 Chart 5: Top 10 Cities by Number of Planned Rooms...... 16 Chart 6: Top 10 Cities by Number of Planned Rooms (Sub-Saharan Africa)...... 17 Chart 7: Top 10 Brands by Number of Planned Rooms & Average Size...... 25 Chart 8: Top 10 Chains by Number of Planned Rooms & Average Size...... 27 Chart 9: Type of Agreement - Number of Deals Signed...... 29 Chart 10: Anticipated Opening Years of Pipeline Deals...... 35 Chart 11: Anticipated Additions to Supply (Rooms, Cumulative)...... 37 Chart 12: Anticipated Opening Years of Pipeline Deals – Onsite Construction...... 38
9 Hotel Chain Development Pipelines in Africa 2018 2018 Research Findings
10 Hotel Chain Development Pipelines in Africa 2018 Section 1: Regional Summary
This year 41 hotel chains contributed to our survey, reporting pipeline activity of 76,322 rooms in 418 hotels.
The data have been analysed initially according to two main regions, i.e. North Africa (5 countries) and sub-Saharan Africa (49 countries, including the Indian Ocean islands). Both regions reported growth in their pipeline activity, as shown in Table 1. There is growth overall of 14 per cent in 2018, and since 2014 has almost doubled in five years. Since 2014, the North Africa pipeline has grown by 74 per cent, from 16,449 rooms in 73 hotels to 28,643 rooms in 120 hotels this year. 14% Growth has been higher in sub-Saharan Africa, more than doubling since 2014. overall growth Year-on-year performance in 2018 still shows growth, although more muted than in recent years – a massive 33 per cent in 2015, 26 per cent in 2016, 9 per cent in 2017, and 11 per cent in 2018. The growth is, of course, on a higher base, with a similar number of rooms – around 10,000 – added to the total pipeline each year since 2014. 76,322 418 rooms hotels
Table 1: Hotel Chain Development Pipelines in Africa 2018 Regional Summary 2014 2015 2016 2017 2018 Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms North Africa 73 16,449 79 18,565 87 19,971 107 23,836 120 28,643 Sub-Saharan Africa 142 23,283 191 31,150 227 39,416 262 43,113 298 47,679 TOTAL 215 39,732 270 49,715 314 59,387 369 66,949 418 76,322
Ten Years Ago What was happening a decade ago? In 2009, the pipeline rooms in North Africa were approximately half today’s figure, and in sub-Saharan approximately one third.
Table 2: Hotel Chain Development Pipelines in Africa 2018 Regional Summary: 2009 to 2018 Comparison 2009 2018 Change Hotels Rooms Hotels Rooms Hotels Rooms North Africa 61 15,611 120 28,643 97% 83% Sub-Saharan Africa 87 15,210 298 47,679 243% 213% TOTAL 148 30,821 418 76,322 182% 148%
11 Hotel Chain Development Pipelines in Africa 2018 Chart 1 provides a graphical representation of the planned rooms in North Africa and sub-Saharan Africa. Chart 1: Hotel Chain Development Pipelines in Africa 2018 Regional Summary