We have just published the 10th edition of our annual Hotel Chain Development Pipelines in Africa 2018 report, which shows all the deals signed by the international and regional (African) hotel chains with investors. This year’s report has a record 41 contributors reporting 418 deals with over 100 brands. We report continuing growth in the market, from 67,000 rooms last year (an average of 181 rooms per hotel) to 76,320 rooms in 2018 (183 rooms average).
Egypt has the largest number of rooms in the pipeline this year, displacing Nigeria’s first place position. Over 2,000 new rooms were signed in Egypt in 2017, but fewer than 1,000 in Nigeria, a ref lection of the recent recession and sluggish growth there.
Here in West Africa, there are deals signed by the chains in most countries, the exceptions being Burkina Faso, Liberia and The Gambia.
Whilst Nigeria’s pipeline is slightly down on last year, with some previous deals cancelled, the other four countries show remarkable increases, with Côte d’Ivoire the star performer. As the country recovers from its years of conf lict, the investment community and the chains are showing increasing confidence, and no fewer than six deals with 1,200 rooms in total were signed last year, of which over 750 rooms were in three deals signed by Marriott. All the new hotels are in Abidjan.
Cape Verde also saw a large increase in the pipeline, with Melia, Hilton and Deutsche (formerly Steigenberger) all having multiple deals there. And in Senegal, almost 1,000 rooms in Hyatt, Mangalis, Golden Tulip and other brands are due to open by the end of 2019. These include hotels in the ‘new Dakar’, Diamniadio, joining Radisson which opened there earlier this year.
For Africa as a whole, around 55% of the pipeline rooms are under construction, with Nigeria reporting 43% on site, and Cape Verde 68%. In West Africa the figure is slightly below the African average, at 49%, but that ref lects the fact that West Africa is a primary focus for the chains’ development activity, and therefore many of the deals are fairly new.
Looking at who is signing all these deals, Marriott is by far the biggest player. Now the largest hotel company in the world, after its 2016 acquisition of Starwood (Sheraton, Four Points et al), and its 2014 purchase of Cape Town-based Protea, Marriott is also becoming the largest player in Africa, with a total pipeline of almost 18,000 rooms in 93 hotels, which is 72% more hotels and 54% more rooms than second-placed Hilton, and almost 10 times the pipeline of IHG, the former global ‘Number One’.
Marriott ’s African pipeline is up 8% on 2017, and in West Africa, it is up 25%, not only because of the increase in Abidjan, but also with deals signed in Lagos, Abuja and Accra.
Another chain which did well in 2017 was Radisson, which signed and opened their second Radisson Blu in Lagos, the Radisson in Diamniadio (another quick one!) and a Radisson Collection in Abuja. Mangalis also achieved much, increasing its pipeline from four hotels to 11, whilst also opening its first Seen-branded hotel in Abidjan.
West Africa remains one of the main focuses of the brands in terms of getting more deals signed – Wyndham appointed an area developer based in Lagos last year, and major chains such as Marriott and Hilton are known to be looking to set up shop here, because they see so much potential in the region. I agree with that. C