Top global hotel chains eye East African market

Saturday September 28 2013
Hotel chains

Kenyan Cabinet Secretary for EAC, Commerce and Tourism Phyllis Kandie (left) with World Travel and Tourism Council president David Scowsill at the Travel and Tourism Conference at the InterContinental Hotel, Nairobi, on September 24. Photo/Salaton Njau.

A number of global hotel chains are planning to venture into the East African market in the next three years, hoping to tap into the growing number of tourists visiting the region.

Top executives attending a conference in Nairobi last week said they had lined up several investments in the coming months in Kenya, Uganda, Tanzania and Rwanda. They are hoping to cash in on the growing demand for accommodation and conference facilities in the region.

Managers of Starwood Hotels and Resorts Worldwide, a US hotel chain, said they planned to open six hotels in Kenya and Tanzania in the next three years under the Sheraton franchise.

Neil George, Starwood’s senior vice president in charge of acquisitions and development in Middle East and Africa, said one of the hotels will be based in Nairobi’s central business district while the other will be set up near the Jomo Kenyatta International Airport.

The third will be set up in one of the game parks. In Tanzania, Zanzibar, Serengeti and Dar es Salaam are the key targets.

Sheraton’s project in Rwanda is at an advanced stage, he said.


But the executives cited difficulties in raising funds as one of the biggest hurdles to investing in the East African Community.

READ: East Africa’s high set-up costs worry hotel chains

“Finding the right developers is a nightmare. Banks are not lending easily because of the downturn in the economies,” said Mr George on the sidelines of the Africa Hotel Investment Forum. “In the next 12 months we will have deals to announce.”

The EAC states hope to raise the annual tourism earnings to $16 billion from $7 billion by 2020. The plan is to double the number of tourists to 10 million annually, riding on the introduction of a single EAC passport, classification of hotels, increased marketing spend and training of personnel in the hospitality industry.

Kenya’s Cabinet Secretary for East African Affairs, Commerce and Tourism Phyllis Kandie said the government would facilitate the construction of hotels to meet the rising demand for accommodation.

Kempinsiki, which opened Villa Rosa in Nairobi last month, said it plans to venture into Kigali in November.

“We plan to set up 10 bungalows with a capacity of 200 rooms in Kigali,” said Reto Wittwer, the Kempinsiki president.

The Rezidor Hotel Group, a member of the Carlson Rezidor Hotel Group, has developed the Radisson Blu Hotel and Convention Centre in Kigali, which is scheduled to open in the second quarter of 2014. It has 292 rooms. It also plans to build Park Inn in Kigali.

“There is huge potential in the region, but we should find ways to bridge the equity gap to attract investors,” said Andrew McLachlan, Rezidor’s vice-president, business development for Africa and Indian Ocean Islands.

Marriott announced plans to open a five-star hotel with 251 rooms while Vision Hotel plans to open a four-star one with 157 rooms in Kigali. Marriott said it would also expand its investments in Kenya, Ethiopia, Ghana, Benin, Gabon and Nigeria, without giving details.

French hotel group Accor is also eyeing Kenya, South Africa, Angola, Nigeria, Ghana, Morocco and Algeria, according to Philippe Baretaud, senior vice-president in charge of Europe, Middle East and Africa.

InterContinental Hotel Group (IHG) is looking at having three new hotels in Nairobi — Holiday Inn, InterContinental and Crowne Plaza. The chain said it is going into Tanzania and Ethiopia as well. An InterContinental hotel is currently under construction in Uganda.