Hotel development remains strong in West Africa

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ABIDJAN, CTE D’IVOIRE — Africa is considered to be one of the most promising regions for hotel developers. In addition to small chains and independents, four global hotel groups dominate signings and openings on the continent.

During the last four rolling quarters, in September 2019, Accor, Hilton, Marriott International and Radisson Hotel Group opened 2,800 rooms and signed agreements for 6,600 rooms. Across Africa, hotel development remains important in most advanced economies, such as Morocco and South Africa; and projects are multiplying in East Africa, particularly in Ethiopia, Kenya, Tanzania and Uganda.

In West Africa, Nigeria is returning to the development scene with emerging regional destinations beyond Abuja and Lagos. Francophone Africa is also changing rapidly. Côte d’Ivoire’s Ministry of Tourism has launched an ambitious national tourism development plan, Sublime Côte d’Ivoire, and has already announced more than $ 1 billion in investments in the sector. Senegal is the other regional star, with local programs like Diamnadio, Lac Rose near Dakar and Pointe Sarene. The other countries showing active hotel development are Benin, Cameroon, Guinea, Niger and Togo.

Philippe Doizelet, Managing Partner, Hotels, Horwath HTL, hotel consultant in West Africa, in collaboration with the Forum de l’Investissement Hôtelier Africain (FIHA), a conference on hotel investment in Francophone Africa, identified four Fundamental factors that fuel a growing flow of investment in the hospitality sector in West Africa: air connectivity, better economic growth, currency and demographics.

In recent years, additional air links have transformed travel to and from West Africa, which, Doizelet said, has been a game-changer. “In the past, the main hubs for flights between West African countries were Paris and Casablanca. However, thanks to the rapid growth of Ethiopian Airlines and other carriers, such as Emirates, Kenya Airways and Turkish, the situation has changed; and new routes are offered to travelers. For example, it is now possible to fly directly from New York to Abidjan, where the African Development Bank is located, and to Lomé, where the Central Bank of West African States (BOAD) is located… request housing, ”he said.

According to the UNWTO, international tourist arrivals to Africa increased by 7% in 2018, one of the fastest growing rates in the world along with East Asia and the Pacific. Flight data analyst ForwardKeys recently confirmed that this trend continues. In 2019, African aviation grew by 7.5% and it is the most remarkable growth market for the first quarter of 2020. As of January 1, international bookings abroad were ahead by 12, 5%, 10% to other African countries and 13.5% to the rest of the world. As a destination, Africa is also expected to do well, as bookings from other continents are currently ahead by 12.9%.

The second factor is the economic growth of many rapidly expanding West African countries. According to World Bank data for 2018, several, such as Benin, Burkina Faso, Gambia, Ghana, Guinea, Côte d’Ivoire and Senegal are growing at 6% per year or better, or more double the world average, 3%. It is an attraction for international investors. However, this is not all; As prosperity increases nationally, so does the local financial services industry. He then seeks to invest the clients’ money; and a good proportion of this capital gravitates towards real estate projects and, in turn, new national infrastructures. As these projects come to fruition, more prosperity is generated and thus a virtuous circle is stimulated, which acts as a catalyst for further economic development.

Money is the third factor. Later this year, the CFA franc, which is pegged to the euro, is expected to be phased out and 15 West African countries (ECOWAS) will adopt the Eco, a new floating common currency, designed to reduce the cost of do business with each other and thus increase trade. However, while there is enthusiasm for the Eco, it is somewhat nuanced as the economies of participating countries are at different stages of development and governments may find it difficult to adhere to agreed guidelines for managing their economies.

The fourth factor is demographics. The population is young and growing. According to Doizelet, it is also characterized by a thirst for learning and a confidence in the future. “People are seeing their standard of living improve and they are eager to seize the opportunities. We find that this mindset is reflected throughout the hospitality industry; it’s incredibly refreshing and it attracts business. he said.

Horwath HTL also identifies four factors that threaten economic progress; these are security issues, the political agenda, governance and the increase in public debt. Although Africa experiences far fewer conflicts today than it did three or four decades ago, when most African countries experienced war, parts of the Sahel are still subject to security threats. On the political level, if democracy continues to spread, it is not yet the rule everywhere, especially at the time of the big elections.

Third, governance. Doizelet said: “When the people are poor and the state is weak, there will be corruption, but I am not convinced that it is much worse than in other parts of the world.

The fourth concern is the increase in public debt, much of which has been taken out in the form of long-term loans from the Chinese to build infrastructure. However, the debt-to-GDP ratio of many West African states is still lower than that of many highly developed countries.

Matthew Weihs, Managing Director of Bench Events, which organizes FIHA, said: “Africa is not the easiest place to do business, but it is an incredibly exciting place as the opportunities prevail. largely on threats. Every time we organize a hotel investment forum, I see new hotel openings coming up and I meet new players eager to enter the market. FIHA delegates are literally building Africa’s future right before our eyes and everyone who attends the conference has the opportunity to participate.

FIHA will take place at the Sofitel Abidjan Hôtel Ivoire in Abidjan, from March 23 to 25.


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