“Security is key,” said Alex Kyriakidis, Marriott’s president and managing director for the Middle East and Africa, who noted business challenges amid the Arab Spring. “Egypt occupancy has crashed. This is the test that Kenya has to confront.”
Kenya’s last presidential election resulted in more than 1,000 violent deaths. The country’s tourism minister, Danson Mwazo, told The Associated Press there is “absolutely zero chance” of violence during its next election in March.
The greatest prize in Africa for Marriott is domestic tourism, said Kyriakidis. Southern Africa will be the fastest growing region in the world for Marriott in the coming years.
It has room to grow on the continent. Of its 420,000 hotel rooms worldwide, only 4,000 – 1 percent – are in Africa, said Trevor Ward the managing director of W Hospitality Group.
More are coming. Ward said Hilton now has nine hotels and 3,380 rooms in the pipeline across Africa; Movenpick has 12 and 2,182; Radisson Blue has 14 and 3,429; Ibis has 19 and 2,632. Many of those developments are in North Africa.
Nigeria has the most hotels under development at 43, but those projects often take longer than they should to finish. An undersupply of hotels in Lagos has led to sky-high prices. A couple traveling with their daughter – Dave and Arina McCarthy – recently stayed at the Federal Palace Hotel in Lagos.
“It’s not cheap,” Dave McCarthy said. “The pegged rate seems to be about $420 a night.”
“If you’re flying in for a couple of nights, $800 for a multinational company isn’t a lot of money,” he said. “As a tourist destination, $400 a night is a lot. … People aren’t going to choose to come here.”
The delays caused by corruption and lack of construction skills in Nigeria makes the country unattractive to hotel investors who can build properties anywhere in the world, said Nick van Marken, an analyst in the travel sector at Deloitte.
“The potential (for Africa) is evident. The emerging middle class, rising GDP, all the numbers point in the right direction. The problem is there’s a lack of transparency, and there’s corruption,” he said.
Kenya’s Rift Valley and the country’s 35,000 elephants are attractions no other country can offer, van Marken said.
“I think the good news is the mood is optimistic,” he said. “If you’re investing in Africa you’re going to be pragmatic. Some investors might be worn down because of the difficulties, but most are upbeat.”<< previous 1 2