Hotel Chains race for Hotel Development in Africa

Lagos-based consultancy W Hospitality Group announced the findings of this year’s Hotel Chain Development Pipeline Survey. The survey finds that Hilton is leading the race to develop new hotels in Africa by number of rooms however Marriott takes the top spot by the number of hotels with 36 in the pipeline. Continue to read for all details about the 2015 Hotel Chain Development Pipelines in Africa.

Chart below differs in two categories, ranking by number of rooms and number of hotels

2015 Hotel Chain Development Pipelines in Africa Top 10 Chains by Number of Planned Hotels and Rooms
Rank by Hotels				Rank by Rooms
							Change on 2014	Average Size
1	Marriott	36		1	Hilton Worldwide	7,250	18%	250
2	Carlson Rezidor	32		2	Carlson Rezidor	6,953	11%	217
3	Hilton Worldwide	29		3	Marriott	6,412	22%	178
4	Starwood	21		4	Starwood	4,623	32%	220
5	Mangalis	17		5	Mangalis	2,329	5%	137
6	Swiss International	16		6	Accor	2,273	43%	189
7	Accor	12		7	Rotana	1,955	34%	244
7=	Best Western	12		8	Swiss International	1,738	150%	109
9	Rotana	8		9	Kempinski	1,618	3%	324
10	Louvre Hotels Group	7		10	Fairmont Raffles	1,277	366%	319

Mangalis is a new chain, launched in 2013, with its first hotel openings expected in 2015, in Conakry and Dakar. It is of note that Mangalis is achieving its very rapid growth by adopting an “asset-heavy” strategy, funding the development of nearly all of its hotels. This is in contrast with virtually every other chain in the survey, who are “asset-light”, seeking management agreements or, exceptionally, franchises and leases.

If, instead of looking at the chains, one looks at individual brands, Carlson Rezidor’s Radisson Blu brand occupies first position in terms of the number of hotels and rooms in its development pipeline. Its sister brand, Park Inn by Radisson, is also in the top 10, whilst the Hilton brand and its “little brother”, Hilton Garden Inn, occupy second and fifth positions respectively. Marriott and Starwood each have two brands in the top ten, with Starwood achieving particularly strong growth for both brands, Sheraton and Four Points.

Marriott leads in presenting a multi-brand offer, with 10 brands available to developers, including four brands included for the first time since its acquisition of Protea last year. This multi-brand approach has become more commonplace as Africa’s markets continue to develop and become mature enough for multiple brands, catering to markets across a broad spectrum. Having led their market entry with their flagship brands, typically at the upscale level, several of the chains are now introducing their midscale and budget brands.

Kempinski has been signing the biggest deals, with an average 324 rooms per hotel, double that of Park Inn, and of all the chains in the survey has the largest hotel project in sub-Saharan Africa, the 451-room Grand Hotel Oyala Kempinski in Equatorial Guinea's future new capital, Oyala.

2015 Hotel Chain Development Pipeline in Africa Top 10 Brands by Number of Planned Hotels and Rooms
Rank by Hotels				Rank by Rooms			Change on 2014	Average Size -Rooms
	Brand	Hotels			Brand	Rooms
1	Radisson Blu	22		1	Radisson Blu	5,372	23.9%	244
2	Hilton	16		2	Hilton	4,965	5.1%	310
3	Marriott	11		3	Marriott	2,316	9.5%	211
4	Park Inn by Radisson	10		4	Sheraton	1,862	29.6%	233
5	Hilton Garden Inn	9		5	Hilton Garden Inn	1,682	33.1%	187
5=	Noom	9		6	Kempinski	1,618	3.3%	324
7	Sheraton	8		7	Park Inn by Radisson	1,581	-17.3%	158
8	Four Points by Sheraton	7		8	Noom	1,332	12.9%	148
8=	Golden Tulip	7		9	Four Points by Sheraton	1,250	37.5%	179
8=	Mantis	7		10	Courtyard by Marriott	1,154	0.0%	289

The far larger average size of new hotels signed by Hilton, Kempinski and Marriott (Courtyard) is clear from Chart 5 below. Hilton’s and Courtyard’s largest deals are mostly in North Africa.

Hyatt and Kempinski are set to double their African presence through new deals signed, but in percentage terms it is the smaller chains (in terms of African presence) including those focusing purely on Africa, such as City Blue, Onomo and Azalaї, that have the highest percentage increase. Rotana, the Abu-Dhabi based chain, are making rapid inroads into the continent, with eight new hotels in the pipeline, as is Swiss International, with 16 new franchise deals, of which more than half are in Nigeria.

	2015 Hotel Chain Development Pipelines in Africa Top 10 Chains by Pipeline and % of Existing Hotels
		Existing		Pipeline		Pipeline % of Existing
Rank	Company	Hotels	Rooms	Hotels	Rooms	Hotels	Rooms
1	Swiss International	6	547	16	1,738	267%	318%
2	Rotana	2	759	8	1,955	400%	258%
3	City Blue	4	69	2	135	50%	196%
4	Onomo	3	343	4	525	133%	153%
5	Mantis Collection	23	284	7	430	30%	151%
6	Groupe Azalaї	7	700	6	949	86%	136%
7	Carlson Rezidor	25	5,763	32	6,953	128%	121%
8	Wyndham	5	820	6	931	120%	114%
9	Hyatt	4	1,111	7	1,121	175%	101%
10	Kempinski	9	1,656	5	1,618	56%	98%

Deals signed and properties under construction are two very different things. Carlson Rezidor, with 5,250 rooms on site, has more rooms actually under construction than Hilton Worldwide, which has 4,730, and therefore takes the top slot. Best Western enters the top ten, with 94 per cent of its pipeline rooms on site.

2015 Hotel Chain Development Pipelines in Africa Top 10 Chains by Pipeline Status
Rank	Company	Hotels	Rooms			Rank – All Deals
			Total	Onsite Construction
1	Carlson Rezidor	32	6,953	5,250	76%	2↑
2	Hilton Worldwide	29	7,250	4,730	65%	1↓
3	Marriott	36	6,412	3,555	55%	3↔
4	Starwood	21	4,623	3,016	65%	4↔
5	Accor	12	2,273	2,018	89%	6↑
6	Mangalis	17	2,329	1,204	52%	5↓
7	Best Western	12	1,115	1,050	94%	-↑
8	Mövenpick	4	1,001	1,001	100%	-↑
9	Kempinski	5	1,618	968	60%	9↔
10	IHG	5	1,195	895	75%	-↑

The chart below shows the evolution of the number of rooms in the top five brands’ development pipelines from 2013 to 2015. Although from a small basis, Hilton Garden Inn has seen the largest absolute growth, from two hotels in 2013 to nine hotels in 2015.