Investing in the African Hospitality Industry: Challenges and Opportunities
Are you looking to invest in the hospitality industry? Have you considered Africa as a potential market? In a recent podcast episode, Halla Matar Choufany, President of HVS in Middle East, Africa, and Asia, shared her insights on the challenges and opportunities in the African hospitality industry.
Choufany highlighted the diverse markets in Africa, each at different stages of development. However, she sees potential in conducting feasibility studies to identify sustainable schemes that tie into the bigger picture of tourism infrastructure. Connectivity, financing, safety, and mindset are some of the challenges facing the African market, but changing the mindset around the difficulties of doing business in Africa could lead to finding solutions.
Despite the economic slowdown, there is a migration of money into the Middle East and Africa, making it a good time to invest in Africa as the cost to acquire certain assets is lower compared to other markets. Private equity firms are already showing interest in the African market, and Choufany believes that as more transactions and investments take place, lenders will follow suit.
Instead of building new hotels, Choufany suggests converting and renovating existing assets in Africa, which requires less capital investment and can potentially bring newer and renovated products to the market. She also sees potential for unique and smaller hospitality offerings, such as lodges and local home accommodations.
The conversation also touched on the importance of market research and having the right team and advisors in place to make successful investments in the hospitality industry. So, if you're considering investing in the African hospitality industry, be sure to do your research, understand the market, and have the right team in place to make it a success.
Best Western's Strategic Approach to Growth and Expansion in Africa and Beyond
Best Western Hotel Group's recent acquisition of World Hotels and expansion into the luxury market is a reflection of their CEO's global growth strategy. With a goal of having 80 hotels in Africa by 2026, Best Western is actively working with existing hoteliers and owners to rebrand and expand their footprint on the continent.
Wytze Van Den Berg, the Vice President EMEA, explains how Best Western has integrated the World Hotels team into their own, adding experienced professionals in the upper upscale and luxury segments to their team. Best Western will continue to use all of their brand names for consumer marketing purposes, but for B2B sales, they will reach out to clients as BWH Hotels.
In addition to growth and expansion, Wytze also highlights the importance of cost savings and competitiveness in the industry. Rising labor, energy, and construction costs make it increasingly important to collectively source materials for construction and invest in technology to make distribution more economic. Operational cost savings through combined buying power also play a crucial role.
Best Western's strategic approach to growth and expansion in Africa and beyond is a reflection of their commitment to offering a wide range of options to keep customers loyal while remaining competitive in the current market. As the industry continues to evolve, Best Western is positioning itself for continued success and growth.
Welcome to the AHIF podcast featuring Stephan Sebah, VP of Development at Golden Tulip, as we delve into Africa's hospitality investment landscape. Gain valuable insights from his 20 years in the financial market, specializing in analysis, risk management, and investment strategies. Discover how his expertise seamlessly transitions into the hospitality industry, bridging the gap between investors and the sector.
Stephan shares exciting updates about Golden Tulip, currently operating 11 hotels with 900 rooms across East Africa and the West Coast. Explore their ambitious growth plans, including four upcoming hotel constructions and discussions for potential partnerships in the pipeline. With a focus on local sourcing, sustainability, and empowering local communities, Golden Tulip is shaping the future of hospitality in Africa.
Join us for an engaging discussion at AHIF, where we'll dive deep into topics like regional sourcing, sustainable practices, and the economic impact of the hospitality sector. Don't miss this opportunity to connect with industry leaders, explore investment opportunities, and be a part of Africa's thriving hospitality landscape. #AHIF #GoldenTulip #HospitalityInvestment #AfricanDevelopment #SustainableTourism