Hotel investors scout new opportunities for expansion across Africa
Hospitality investors defied security fears in Kenya following a terrorist attack over the weekend to attend a high profile hotel investment conference in capital Nairobi. According to organisers of the three-day Africa Hotel Investment Forum, only 10% of delegates cancelled their travel plans following the Westgate mall attack.
More than 400 delegates including CEOs and senior executives from leading hotels brands such as Hilton WorldWide, Marriott International, Wyndham Hotel Group, Rezidor Hotel Group, InterContinental Hotels Group, Hyatt International, Lonrho Hotels and Kempinski Hotels are in Nairobi scouting for investments opportunities in Africa.
The investors, 40% of whom are from outside Africa according to event organisers, discussed investment opportunities, operating costs and human capital challenges, financing and partnerships in the hospitality industry.
On the second day of the forum, Wyndham Hotel Group announced it had signed a two hotel deal in Tanzania but declined to give further details. African hospitality management group Mangalis Management announced it is constructing 2,200 rooms and suites across 15 properties in 15 African countries at a cost of £315m (US$507m). Other senior executives told How we made it in Africa that they were in talks with investors at the forum about potential deals in sub-Saharan Africa.
Speaking at the forum, Dr Martyn Davies, CEO of Frontier Advisory, said the turnout of investors in Nairobi during a terrorist attack shows how risk perceptions of Africa are changing.
“[About] 90% of delegates arrived here in Nairobi during the city’s… possibly most trying times. What does this mean about risk in Africa? Think about it. How has Africa become de-risked?
“I think that is very telling as to how we are increasingly viewing the continent, not so much from the traditional lens of high risk… but more around lesser risk, significantly reduced risk and commercial achievement,” said Davies.
Davies explained that the normal expectation would have been for visitors to cancel their trips given the access to information about the attack on social and mainstream media minutes after it happened.
“It’s not a question of ignorance is bliss, it’s exactly the opposite. What is paradoxical here is that despite the increase [in information] and in full knowledge of events taking place here in Nairobi we still chose to come here.”
David Scowsill, president and CEO of World Travel and Tourism Council, explained that cancelling the forum would let the terrorists triumph. He added that stakeholders should not allow terrorism to stop the business of travel and tourism, noting that the industry is critical to creating jobs, driving GDP growth and stimulating investments in Africa.
“In Kenya, our industry is a cornerstone of the economy. Some 1.8m visitors came to this country in 2012. It accounts for about 12.5% GDP, one in 10 jobs, 20% of the exports and around $7bn of investments forecast over the next 10 years.”
Scowsill expressed optimism about Kenya’s hospitality industry noting the industry has shown resilience in the past in overcoming terrorism threats, natural disasters [and] man-made crises all over the world.
“Our industry is resilient,” he said. “In each occasion, travel and tourism has returned to growth with remarkable speed.”