Hilton Worldwide to speed its growth in Africa

HOTEL group Hilton Worldwide will accelerate growth in Africa and already has 19 properties in the pipeline to add to its 33 hotels on the continent, CEO Chris Nassetta said on Thursday.

“There are amazing growth opportunities in Africa — we will grow rapidly, there is exceptional opportunity to grow that base,” Mr Nassetta said.

Many players in the hospitality space are turning their attention to the rest of Africa‚ as growth slows in developed markets. At the beginning of September, Carlson Rezidor opened its first hotel in Zambia, Lusaka, marking the group’s 22nd hotel in Africa.

This brings Carlson Rezidor’s African portfolio of properties in operation and under development to 48 hotels with 10,889 rooms. It is the 10th-largest hotel group worldwide‚ operating brands such as Radisson Blu‚ Park Inn by Radisson and Hotel Missoni.

“Countries such as Mauritius and Seychelles remain favourable tourist destinations for travellers from Africa and across the region, giving us a sound rationale to combine portfolios and drive growth from one central point,” Mr Nassetta said.

The group has also established an office in Johannesburg, to be headed by Johannes van der Putten, who will become Hilton Worldwide’s vice-president for Africa and Indian Ocean, leading operations across the continent with a focus on supporting the company’s business expansion strategy.

Hilton Worldwide has added about 1,000 hotels in the past five years to its portfolio, which translates into about 162,000 rooms around the world. “We hope to add another 1,000 in the next three to five years,” Mr Nassetta said.

The group has about 4,000 hotels in 102 countries. It focuses on third party capital sources as opposed to owning the properties itself. The company manages a property for a local or regional player.

Pointing to Africa’s projected growth rate of 6%, Hilton Worldwide Middle East and Africa president Rudi Jagersbacher said earlier this year: “This gives us confidence to invest even further. Our long-term goal is to have a Hilton hotel in every key city across the continent. The next few years promise to bring a wide range of opportunities, including the opening of hotels in new markets such as Sierra Leone, Chad and Uganda.”

The company also announced that Pezula Resort & Spa in Knysna, Western Cape, will join its luxury portfolio segment, Conrad Hotels & Resorts, following the signing of a management agreement with resort owners, Alderney Establishment. Hilton Worldwide now has four properties in South Africa, including Pezula.

Industry players have said the outlook for the hotel industry in sub-Saharan Africa is increasingly positive, with potential growth of 7%-15% in revenue per available room (RevPAR) expected for this year. This is almost double the growth expected for America and Asia.

RevPAR is a measure the hotel industry uses to calculate daily sales by multiplying the occupancy rate with the average daily rate for a room.

Local players have not been left out of the expansion drive. As part of its $130m African expansion drive, the Protea Hospitality Group in July signed an agreement for the construction of another hotel in Uganda. Protea, with its partners in the property sector, aims to build 10 hotels on the continent, making it the largest investor in new hotels in Africa this year. JSE-listed City Lodge plans to invest as much as R1.5bn over the next five to 10 years building up to 20 hotels in Africa.

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