Hospitality sector in East Africa sees a boom with tourism expansion and oil discoveries

Protea Hotel-John Hickey-Fry flickr optThe regional investment in the hospitality sector is an indication of increased opportunities offered by the East African Community (EAC) market and discovery of oil in member countries. (Image source: John Hickey-Fry/Flickr)South African hotel chain Protea Hotels has announced plans to develop five new properties in East Africa to tap into the expanding tourism and oil sectors

It is reportedly among the many hospitality brands that have, in recent years, invested billions of dollars in the region.

The firm already has four hotels in Tanzania, three in Uganda and one in Kenya.

Over the next five years, the hotel chain plans to add two properties each in Rwanda and Zanzibar and one in Uganda. In Q2 2014, an additional 100 rooms to its 73-room Protea Entebbe will come up in Uganda. Meanwhile, the construction of a new Protea Hoima Hotel in the oil-rich region of northern Uganda begins in 2017.

The hotel is also seeking new opportunities in Kisumu and Nairobi in Kenya.

Stuart Cook, MD of Protea Hotels East Africa, said, “The second phase of construction targets international corporate business travelers, air crew and domestic conference market.”

The planned development of new properties comes even as the US chain Marriott International announced plans to buy Protea Hospitality Group’s 125 properties in Africa.

The regional investment in the hospitality sector is an indication of increased opportunities offered by the East African Community (EAC) market and discovery of oil in member countries.

The EAC hopes to raise their annual tourist earnings from the current US$7bn to US$16bn by 2020.

In a similar development, Hilton Hotel, known for its dominant property in Nairobi, is currently constructing a hotel in Kampala with plans underway for another in Dar es Salaam.

At the same time, officials from the US Starwood Hotels and Resorts Worldwide recently said they planned to open six hotels in Kenya and Tanzania in the next three years under the Sheraton franchise.

According to Neil George, senior V-P in charge of acquisitions and development in Middle East and Africa, one property will be in Nairobi’s Central Business District and another at the Jomo Kenyatta International Airport. A third will be set up in one of the game parks. Others key targets include Zanzibar, Serengeti and Dar es Salaam.
Kempinski also opened a new Villa Rosa Hotel in Nairobi recently and has plans to venture into Kigali soon.

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

Rezidor Hotel Group, member of the Carlson Rezidor Hotel Group, has developed the 292-room Radisson Blu Hotel and Convention Centre in Kigali that is scheduled to open in Q2 2014. It also plans to build Park Inn in Kigali, sources said.

Rezidor has already set up a 126-room hotel in Westlands and a 256-room hotel in Upper Hill, both on the outskirts of Nairobi. It also has a hotel in Addis Ababa, Ethiopia.

Another firm, Mangalis Management Group (MMG), owned by a West African conglomerate Teyliom International, plans to invest US$551mn in the hospitality sector in 13 sub-Saharan African countries.

The firm plans to construct 2,200 rooms and suites in 15 properties across Africa, with some being set up in the East Africa.

Teyliom International entered the African hospitality market in 2009 when it opened the Radison Blu Dakar.

Other foreign investors in the region include Korean HwanSung Group, which plans to open 150-room HwanSung Hotel near JKIA in Nairobi, while Accor Hotels is set to open a 140-room hotel in the Kenyan capital.

 

Mwangi Mumero

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