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Hotel Chains race for Hotel Development in Africa

  • Published by Ozgur Tore

africa construction

Lagos-based consultancy W Hospitality Group announced the findings of this year’s Hotel Chain Development Pipeline Survey. The survey finds that Hilton is leading the race to develop new hotels in Africa by number of rooms however Marriott takes the top spot by the number of hotels with 36 in the pipeline. Continue to read for all details about the 2015 Hotel Chain Development Pipelines in Africa.

Chart below differs in two categories, ranking by number of rooms and number of hotels


2015 Hotel Chain Development Pipelines in Africa

Top 10 Chains by Number of Planned Hotels and Rooms

Rank by Hotels   Rank by Rooms
    Change on 2014 Average Size
1 Marriott 36 1 Hilton Worldwide 7,250 18% 250
2 Carlson Rezidor 32 2 Carlson Rezidor 6,953 11% 217
3 Hilton Worldwide 29 3 Marriott 6,412 22% 178
4 Starwood 21 4 Starwood 4,623 32% 220
5 Mangalis 17 5 Mangalis 2,329 5% 137
6 Swiss International 16 6 Accor 2,273 43% 189
7 Accor 12 7 Rotana 1,955 34% 244
7= Best Western 12 8 Swiss International 1,738 150% 109
9 Rotana 8 9 Kempinski 1,618 3% 324
10 Louvre Hotels Group 7 10 Fairmont Raffles 1,277 366% 319

Mangalis is a new chain, launched in 2013, with its first hotel openings expected in 2015, in Conakry and Dakar. It is of note that Mangalis is achieving its very rapid growth by adopting an “asset-heavy” strategy, funding the development of nearly all of its hotels. This is in contrast with virtually every other chain in the survey, who are “asset-light”, seeking management agreements or, exceptionally, franchises and leases.

If, instead of looking at the chains, one looks at individual brands, Carlson Rezidor’s Radisson Blu brand occupies first position in terms of the number of hotels and rooms in its development pipeline. Its sister brand, Park Inn by Radisson, is also in the top 10, whilst the Hilton brand and its “little brother”, Hilton Garden Inn, occupy second and fifth positions respectively. Marriott and Starwood each have two brands in the top ten, with Starwood achieving particularly strong growth for both brands, Sheraton and Four Points.

Marriott leads in presenting a multi-brand offer, with 10 brands available to developers, including four brands included for the first time since its acquisition of Protea last year. This multi-brand approach has become more commonplace as Africa’s markets continue to develop and become mature enough for multiple brands, catering to markets across a broad spectrum. Having led their market entry with their flagship brands, typically at the upscale level, several of the chains are now introducing their midscale and budget brands.

Kempinski has been signing the biggest deals, with an average 324 rooms per hotel, double that of Park Inn, and of all the chains in the survey has the largest hotel project in sub-Saharan Africa, the 451-room Grand Hotel Oyala Kempinski in Equatorial Guinea's future new capital, Oyala.

2015 Hotel Chain Development Pipeline in Africa

Top 10 Brands by Number of Planned Hotels and Rooms

Rank by Hotels   Rank by Rooms Change on 2014 Average Size - Rooms
  Brand Hotels   Brand Rooms
1 Radisson Blu 22 1 Radisson Blu 5,372 23.9% 244
2 Hilton 16 2 Hilton 4,965 5.1% 310
3 Marriott 11 3 Marriott 2,316 9.5% 211
4 Park Inn by Radisson 10 4 Sheraton 1,862 29.6% 233
5 Hilton Garden Inn 9 5 Hilton Garden Inn 1,682 33.1% 187
5= Noom 9 6 Kempinski 1,618 3.3% 324
7 Sheraton 8 7 Park Inn by Radisson 1,581 -17.3% 158
8 Four Points by Sheraton 7 8 Noom 1,332 12.9% 148
8= Golden Tulip 7 9 Four Points by Sheraton 1,250 37.5% 179
8= Mantis 7 10 Courtyard by Marriott 1,154 0.0% 289

The far larger average size of new hotels signed by Hilton, Kempinski and Marriott (Courtyard) is clear from Chart 5 below. Hilton’s and Courtyard’s largest deals are mostly in North Africa.

Hyatt and Kempinski are set to double their African presence through new deals signed, but in percentage terms it is the smaller chains (in terms of African presence) including those focusing purely on Africa, such as City Blue, Onomo and Azalaї, that have the highest percentage increase. Rotana, the Abu-Dhabi based chain, are making rapid inroads into the continent, with eight new hotels in the pipeline, as is Swiss International, with 16 new franchise deals, of which more than half are in Nigeria.

 

2015 Hotel Chain Development Pipelines in Africa

Top 10 Chains by Pipeline and % of Existing Hotels

    Existing Pipeline Pipeline % of Existing
Rank Company Hotels Rooms Hotels Rooms Hotels Rooms
1 Swiss International 6 547 16 1,738 267% 318%
2 Rotana 2 759 8 1,955 400% 258%
3 City Blue 4 69 2 135 50% 196%
4 Onomo 3 343 4 525 133% 153%
5 Mantis Collection 23 284 7 430 30% 151%
6 Groupe Azalaї 7 700 6 949 86% 136%
7 Carlson Rezidor 25 5,763 32 6,953 128% 121%
8 Wyndham 5 820 6 931 120% 114%
9 Hyatt 4 1,111 7 1,121 175% 101%
10 Kempinski 9 1,656 5 1,618 56% 98%

Deals signed and properties under construction are two very different things. Carlson Rezidor, with 5,250 rooms on site, has more rooms actually under construction than Hilton Worldwide, which has 4,730, and therefore takes the top slot. Best Western enters the top ten, with 94 per cent of its pipeline rooms on site.

2015 Hotel Chain Development Pipelines in Africa

Top 10 Chains by Pipeline Status

Rank Company Hotels Rooms Rank – All Deals
Total Onsite Construction
1 Carlson Rezidor 32 6,953 5,250 76% 2↑
2 Hilton Worldwide 29 7,250 4,730 65% 1↓
3 Marriott 36 6,412 3,555 55% 3↔
4 Starwood 21 4,623 3,016 65% 4↔
5 Accor 12 2,273 2,018 89% 6↑
6 Mangalis 17 2,329 1,204 52% 5↓
7 Best Western 12 1,115 1,050 94% -↑
8 Mövenpick 4 1,001 1,001 100% -↑
9 Kempinski 5 1,618 968 60% 9↔
10 IHG 5 1,195 895 75% -↑

The chart below shows the evolution of the number of rooms in the top five brands’ development pipelines from 2013 to 2015. Although from a small basis, Hilton Garden Inn has seen the largest absolute growth, from two hotels in 2013 to nine hotels in 2015.

africa hotelchaindev2015

Click here for the regional summary

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