International hotel brand, Starwood recently announced the growth of their global sales operation with the opening of a Starwood Sales Organisation in South Africa. Regional VP for Africa and Indian Ocean, Hassan Ahdab sat down with Business Traveller Africa and gave us his thoughts on South Africa’s over-supply of hotel rooms and what the future holds for the African hospitality industry.
Why the Starwood interest in South Africa?
Starwood is very well distributed and established in North Africa. There is no reason why we shouldn’t be likewise in southern Africa, particularly South Africa which has the most developed business environment in the region.
Does this interest extend to the rest of Africa?
Starwood has the largest portfolio of upscale, upper-upscale and luxury hotels on the African continent. We have a very strong presence across Africa with nearly 40 hotels and another 11 new hotels to open in the next few years. Currently, Starwood is represented by five brands – Le Méridien, Sheraton, Four Points by Sheraton, The Luxury Collection, and Westin – in Africa. We will introduce two luxury brands, St. Regis and W, to the region in the coming years.
As an emerging market, Africa offers exciting opportunities for our business growth. Starwood will continue selective growth in these regions, particularly Nigeria, Ghana, Senegal, and the Ivory Coast in central Africa; and Namibia, Botswana, Mozambique, and Angola in southern Africa. These countries offer an attractive and stable environment for businesses. The climate for development in Africa is healthy and therefore we have increased our development resources. We have a very positive outlook on Africa, as there is a relatively less representation of global hotel chains compared to other destinations.
What do you make of the over-supply of hotel rooms in South Africa?
It’s a result of the 2010 World Cup, but South Africa needed to put on a good show and to handle the global response to this major international event. That there is currently an over-supply of rooms is a natural progression, as has been observed in many other countries and cities that have hosted similar worldwide events. In the long run, this is a positive after-effect from the World Cup, as the new supply of hotel rooms has elevated the quality and standards of the hotel industry in South Africa. It will take a while for the additional room supply to be absorbed and to match the demand. For this to happen, there must be a concerted and continued effort by the government and the stakeholders in the tourism industry, including airlines and operators, to promote South Africa as a destination.
Was South Africa short-sighted in looking for short-term gains, with regards to the 2010 World Cup, and did the country not pay enough attention to the long-term effects of over-supply?
No. Rather, South Africa has made long-term investments for the World Cup with a great infrastructure to show for it. South Africa had one opportunity to showcase itself to the world and to do this well, it had to invest in areas such as hotels and roads. Something had to be done to make the 2010 World Cup a successful event, and South Africa did it.
In this regard, how does South Africa compare with the rest of the world?
South Africa is one of the first countries to put Africa on the world map. It has great natural, historical, and heritage attractions. Today, given its modern hotel supply and improved infrastructure, it is comparable to other notable destinations, including those that emerged onto the global scene after hosting a successful major event.
Are we going to see more investment in the rest of Africa, as opposed to Sub-Saharan Africa?
We have a well-balanced pipeline and will progressively announce new signings and openings. Over the next few years, we plan to open and manage 11 new hotels in Africa, including the Indian Ocean, which will increase our current portfolio in Africa by about 20%.