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Hotel developers plan 40,000 new rooms across Africa
Question of the Day
NAIROBI, Kenya — The rooftop pool at Nairobi’s newest high-rise hotel juts out over the edge so swimmers can peer through the glass bottom eight stories down.
A new champagne bar sits nearby. IPads with detailed wine descriptions serve as menus.
This is the face of new, high-end hotels in Africa.
Nairobi has seen the construction of several upscale properties in recent years, as developers eye an increase in business travel to a continent with rising business prospects.
International hotel developers are planning nearly 40,000 new rooms across Africa in the coming years.
Travel and tourism in Africa generate about $164 billion a year, 9 percent of the continent’s total gross domestic product, said David Scowsill, president and chief executive officer of World Travel & Tourism Council. He said tourism generates almost 19 million jobs in Africa, which is 7.1 percent of all employment.
And that business is expected to increase.
Africa’s middle class is expected to soon begin leisure travel en masse, and an international forum held in Nairobi last week was packed with hotel executives because of this fact alone: Africa’s middle class today numbers 300 million people, but by 2050 will number 1 billion.
“Africa is the only region of the world where birth rates are above [population] replacement rates,” Ian Goldin, a professor at Oxford, told the forum. “Its population is the fastest growing of all the continents, and it has the youngest labor force. Notably, inequality on the continent is going down, even as it rises in the rest of the world.”
But hotel owners= beware. The continent is still a maze of business challenges: Slow land acquisition, slow government approval, slow construction.
Christian Karaoglanian, chief development officer for French hotel group Accor, said one project has been under construction in Ethiopia for five years. Another property in Nigeria took three years longer than expected.
“There is a lack of professional expertise. They don’t necessarily have the expert people,” Mr. Karaoglanian said.
Despite the challenges, Accor has 5,000 rooms under development or construction across Africa, but Mr. Karaoglanian said that for now Accor sees Asia as its more important growth market.
Moshi Perera, the general manager of the Sankara, the hotel with the rooftop pool, said that for a long time there was more demand than supply for high-end hotels in Nairobi.
But hotels can become potential targets, and the Sankara has anti-ram blocks and high security walls. Business risks in Africa include terrorism and political instability.
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