The Gulf & Indian Ocean Investors’ Summit is a hotel investment event designed for investors by investors. The event was recently held in Abu Dhabi on February 6th and 7th, and featured industry players – owners, developers, advisory firms, as well as representatives from hotel companies such as InterContinental Hotel Group, Movenpick, Emaar Hospitality Group, Minor Hotel Group, Kingdom Hotels, and others. Africa featured as part of the programming at the event with a main panel and two country roundtables on Kenya and Zanzibar.
The panel, ‘Africa – A fresh horizon dawning…or another new market destined to disappoint hotel investors?’, was moderated by Lagos-based Trevor Ward of W Hospitality Group, and speakers included Dillip Rajakarier, CEO of Minor Hotel Group, Bani Haddad, Managing Director of Dream Hotel Group, and Raoul Gufflet of The Mauritius Commercial Bank. Speakers at the roundtable discussions on Zanzibar and Kenya included Sara Rosso, CEO of Planhotel Hospitality, as well as representatives from Hyatt, HVS Consulting, among others.
A roundup of the discussions by Hotel News Now fleshed out some points – highlighting that markets with economies that are largely dependent on oil and gas production such as Angola, Gabon and others, have largely seen depressed growth in recent times while other markets with more diverse economies are performing much better. There is great opportunity, and demand, in the midscale and economy segments of the hotel market. The level of sophistication and investment liquidity of the markets impact how positively foreign capital view their investment potential. In the meantime local financing is still relatively expensive to obtain. Some foreign investors shy away from Africa as there are only five markets here considered to be investment grade, most of which are in Northern Africa. The consensus was that African hotel development was a game of immense patience, Sara Rosso of Planhotel Hospitality remarked,“They say here that everything is impossible, but it becomes possible, as opposed to the West where everything is possible, and then they tell you what can’t be done. You need determination and time.”
Zanzibar and Kenya have great potential with increased vacation demand, particularly if external factors such as politics and security become favorable. Kenya in particular has suffered from the perception of insecurity, however Nairobi soldiers on. And although the tourism marketing of some of these destinations are inadequate, regional demand is increasing. For instance, Kenya is seeing a rise in tourists from Nigeria, especially as the high dollar exchange rates have limited buying power and have reduced leisure international travel from the latter country. Other markets like Senegal have been stable for years, but has not really seen sustained increases in hotel demand. Liberia, one of the three countries largely impacted by the Ebola virus, will see the opening of a new hotel targeted at demand generated from the oil, rubber and surfing markets. The hotel will be managed by Dubai-based third-party management group, Aleph Hospitality, and is currently in discussion with several major hotel companies for branding. Delivery of this hotel is expected in 2018.