Top hoteliers say region's hospitality sector to grow despite global economic slowdown

With the global economic outlook predicting slow growth in African countries, there have been widespread concerns on what it could spell for the hospitality sector in the region. In the Sub-Saharan African region, experts are avoiding much optimism for economic progress projecting growth at around 1.6 per cent against the global outlook of 3.1 per cent. Despite this, hoteliers and experts in the sector remain optimistic that the industry remains a cash cow for investors and governments in Africa. Many say that, while the slowdown is only temporary as a result of high dependency on commodities, as opposed to services, the hotel industry will weather the storm and continue to grow in coming years. Hilton Hotels and Resorts senior vice-president for Europe, Middle East and Africa, Patrick Fitzgibbon, told The New Times that the economic slowdown is less likely to have any impact on the region’s hospitality sector growth. Fitzgibbon said, the East African region was actually underserved and promised long term returns for investors and international hotel brands, including Hilton Hotels. “As opposed to shying away from the East African market due to the slowdown, Hilton Hotel is actually looking to enter the Rwandan market in the near future. “We have begun looking at avenues to enter the market,” he said. He said that they were currently working on a new hotel in Nairobi, Kenya, which is likely to be open next year. Elie Younes, the Rezidor Vice President and Chief Development Officer, said the region continues to hold good prospects for hoteliers despite external economic conditions. The hotel brand, already runs an establishment in the country and plans to open a second one next year. Park Inn has been built in the property that used to be Hotel Kiyovu “After that we will be going out to other destinations across Rwanda to serve the underserved parts of the country. That is how confident we are about this market,” he said. The region has also caught the attention of other international hotel brands such as Best Western Hotels and Resorts, and Accor Hotels, both establishing a presence in neighbouring countries next year. Best Western Hotel is opening in Kenya next year, while Accor Hotels plans to set up shop in Uganda, Tanzania and Kenya. Financial and investments experts called on the international brands interested in the region to take time to understand the region and its business dynamics to avoid falling victim to perceptions and generalisation which could see them miss out on opportunities. Victor Kgomoeswana, an African business and investment consultant, said that, in recent years, the region was faring very well in terms of attracting foreign investments, which was proof of the opportunities it offered. He said that, quite often, investors who look out for media perceptions and opinions about the region miss out on viable opportunities. “There are negative perceptions so much that investors even budget for bribes which are not a reality on the ground or assuming that the region requires aid as opposed to business. The more you interact with the region, the more you understand its doing business environment,” Kgomoeswana said. For hoteliers looking to enter the Rwandan market and other East African markets, he advised them to consider a regional approach as well as seek to build formal partnerships with governments and local businesses. “Most might think that being left behind is always a bad thing; however, contrary to popular perception, in the hotel industry, it actually presents an opportunity for investors and brands. Backlog presents an opportunity,” he added. Financiers say that despite what may seem like a dull economic outlook for the continent, there are funds for viable and bankable hotel projects across the continent David Harper, the head of property services at Hotel Partners Africa, said that there are a number of viable funding options for hotel brands and operators. Mossadeck Bally, the chief executive of Azalia Hotels Group, a financier of hotel projects across the continent, said if brands conduct due diligence and feasibility studies on their projects, there are always financing options available. editorial@newtimes.co.rw

News

Top hoteliers say region's hospitality sector to grow despite global economic slowdown