Advice and Opinion Events

Hilton confident on hotel development in Africa

Hotel Reception Desk Generic

Tourism on the African continent is on the increase with four million new arrivals in 2016, bringing the number of visitor totals to 58 million, according to the latest UNWTO World Tourism Barometer. Sub-Saharan Africa is leading this growth at +11%.

There is an ongoing demand for local knowledge and expertise from prospective investors in sub-Saharan Africa, which prompted HVS, the global hotel consultancy, to hold its inaugural Tourism, Hotel Investment and Networking Conference, THINC Africa, last year.

Following its success, the second THINC Africa Conference will take place on 30-31 August 2017 at the FNB Portside Building, in Cape Town’s iconic V&A Waterfront precinct.

“We are bullish on Africa and believe it represents a huge opportunity for us, with the emerging middle class, urbanisation trends and increased arrivals to the continent. We are entering new markets and bringing new brands and product into key countries, and expect to double in size across Africa in the next 5 years or so. We also see great opportunity for franchise agreements across the continent,” says Mike Collini, Vice President Development for Africa at Hilton.

“When we drilled down country by country we came up with about 150 potential developments. If you look at Hilton Garden Inn, for example, this is highly efficient in its design, and more importantly in its operational model. We’ve already opened our first hotel under this brand in North Africa and the first one in Sub-Sahara is scheduled to open later this year, we believe it is a perfect fit for Africa” says Collini.

Hilton, sponsor of this year’s THINC Africa conference, is looking to develop in both existing and new markets including Cape Town, Johannesburg, Luanda and Lagos as well as looking at the possibility of managing lodges and resorts, with a focus on core capitals and commercial cities.

Collini says that in order to deal with the challenges of development in Africa and to mitigate risk there are three fundamentals that need to be put in place. “It’s important to speak to a professional hotel consultant at the outset to establish which segment is right and look at the supply and the dynamics around that. It’s essential to get a competent hotel architect on board and to get the operator involved at the earliest stage.”

Tim Smith, managing partner of HVS Africa, emphasises that the consultants need to be engaged “before you put a spade in the ground, because once you’ve put a spade in the ground you’ve started making decisions and often those decisions aren’t suitable or appropriate for the hotel brand”.

Collini adds that the Hilton is looking to grow with local strategic partners. “Currently, all of our ownership base and the people we work with are local, although we do foresee off-shore investment coming into hotels in Africa in the future.”

As Smith points out: “Because training is not always easily accessible across Africa, it can be challenging to find the right partner, but the sheer size of the African continent means that you can’t physically look after all the regions from your home base, so franchisors and local partners with local expertise are essential to grow and nurture those markets.”