Africa’s Burgeoning Economy Entices Global Hotel Giants

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VENTURES AFRICA – Global hotel giants are in a rush to set base in Kenya a continental research study has revealed.

The study by Lagos based W hospitality Group has revealed a positive spike touching on the number of multinational hotel investors rushing to set up operations in sub-Saharan Africa.

As other continental economic fronts continue to suffer depressed investments, Sub Saharan Africa countries recorded a 42 per cent increase in upcoming hotel investments.

According to Kenya Tourist Development Corporation (KTDC) Chief Executive Officer Marianne Ndegwa while corroborating the survey findings, the number of pipeline hotel rooms has significantly increased.

“In sub-Saharan Africa, Kenya is emerging as a fast growing hotel investment destination with international chains such as: Best Western, Radisson Blu, Park Inn and Three Cities-branded hotels all under construction. There is also a 200-room Lansmore Hotel, Lonrho’s new brand, on the drawing board,” Ndegwa said.

The report by W Hospitality Ndegwa, disclosed, estimates that the hotel chains polled in the recent surveycurrently have almost 99,000 rooms operating in Africa, with around 44,300 in North Africa and 54,600 in sub-Saharan Africa.

The W Hospitality Group Managing Director, Mr. Trevor Ward, says seven percent of the world’s 10 fastestgrowing economies are based in Africa.

“Where the economic growth is around six percent per annum; that’s more than double the rate of many majorWestern economies and faster than the average for Asia. So if you are answerable to shareholders for growingreturns, these are facts you can’t afford to ignore,” he said.

The study notes that an analysis of leading economic and demographic trends sheds more light on the phenomenon. African economies have become much healthier.

“In the 1990s, average was running at over 20 percent; by the 2000s, it had fallen to less than 10 percent. Over the same period, debt as a percentage of GDP fell from over 80 percent to less than 60 percent and national budget deficits had diminished by over 60 percent,” it says.

Last year, the Rezidor Hotel Group, one of the fastest growing hotel companies worldwide, announced they will construct a second hotel in Kenya.

The proposed Park Inn to be built in Nairobi will add 126 rooms to Rezidor’s global pipeline and welcome the first guests in by December, 2013.

It will be the group’s second hotel in Kenya after the Radisson Blu Hotel, with 244 rooms, which is under construction by the same group. Radisson Blu is now expected to be finished by end of March 2014.

The Park Inn is Rezidor’s first park Inn brand by Radisson in Kenya and also the first in East Africa. It will be located at Woodvale Grove in the popular commercial and economic Westlands district of Nairobi, five kilometers northwest of the city centre.

Despite the negative impact of Kenya’s politics, the tourism sector continues to grow, albeit too slowly compared to the national potential.

The arrival of international hotel brands like Sheraton, Radisson Blu, Park Inn, Holiday Group and others is an indication of the confidence some foreigners have in the future of the country.

For instance, the number of tourists arriving in Kenya rose by 11.1 percent to 1.26 million in the year to March2012, up from 1.147 million in the year to March 2011, says the latest Central Bank of Kenya Monthly Economic report. Europe and Africa dominated accounting for 46.7 percent and 23.9 percent of total tourist arrivals respectively.

Oceania, Africa and America were the three highest growth sources of tourist arrivals at 21.3 percent, 12.8percent and 12 percent, respectively.

Foreigners from Europe and from Asia are also being drawn into the sector, an indication of which is theincreasing number of Italian, Greek, Indian, Chinese, Thai and Japanese restaurants and hotels.