Africa is more than a great opportunity, it's the biggest market to come. Just to keep in mind, a few numbers; first, 1.5 billion inhabitants by 2050, it will be bigger than uh, China or bigger than India. In the continent of Africa fits more or less all the whole world; uh China fit in Africa, India, Europe, US, and Brazil, just to give you the size of Africa. And today, if you take the market, only 5%- 5.3% of the sub-Sahara Africa, just to give you uh, the, the- the mass market that we are developing, uh, branded hotels, 5%, versus 44 in, in Europe, and 70 in the US. Then, to show you the massive opportunity we have, all together, bigger than chain original player like Mangalis Hotel Group, or small independent hotels, to support the growth of Africa.
The perception of Africa is always different. If you are well connecting with Africa, this is our case, because our ownership is Africa; we are belonging to a company, we are based in, in Ivory Coast in Senegal for the past decade, and we know all the issues of Africa that we need, and we know we need to understand how we work in Africa, which is, I agree, totally different than in Russia or Western Europe or in even in the US.
And as far you know all the issues and how to deal with, it's more easy to work with than, you know, and Africa, probably there is more administration, more bureaucracy than in Europe, but the way of doing business is more the same, the wish of doing business is the same, and the acceleration of doing business is clear, then all in all, at the end, it's not to say complex to do business in Africa.
It take more times, according some countries, logistics is an issue, logistics to bring the stuff from Europe or from Asia, it's an issue to build, it's an issue, but with the new technique of the approach and the new logistics that we deploy, it's more easy to in Africa, and the time frame from day one, the construction and delivery to operate, the time has reduced by two, at least for past 5 years, and even with take modular construction we proposed a construction for 10 to 11 month, which is track record in the industry.
The serviced apartments hospitality sector is gaining more prominence in the industry. In this TV show Marcel Lindt discusses Frasers service apartments.
An expanding hospitality sector
So Frasers is a leading operator of serviced apartments, we have about ninety properties and about fourteen thousand units under operation and in the pipeline at the moment, we are from Singapore originally, and so we have a very strong presence in Asia, but we also have a good presence in Europe, and in the Middle East. More recently we have also started to look at Africa as a region to grow.
So, I would say the main difference to a hotel is, that you get larger rooms, you have a separate living area, you have a separate kitchenette, sometimes even a full blown kitchen, we often have a separate bedroom, essentially we've giving more space to the traveller. On the other hand, you have less, open spaces, so you have less public areas, typically. So, we are - we tend to be in areas where there's lots of restaurants around, so we feel we don't need to have a lot of F&B offering in our properties. Same with conference and banqueting, you probably find is more in a hotel, for us that’s more sort of, you know, we have a small meeting rooms for - for smaller events, but we are not doing big conferences, like the one here now at the moment.
Hospitality TV will continue to feature shows about serviced apartments and other hospitality sectors. Why not take a look at who else has been featured in the Hospitality250.
Hospitality industry opportunities are increased when the right infrastructure is in place. In this TV show Marianne Jordan of KTDC discusses the activity in Kenya
Infrastructure for hospitality industry opportunities
I think in the last ten years the parameters and the policies for serious investment has been put in place, and there’s been a lot of infrastructure development going on. What we found is in tourism we had a huge undersupply of beds because demand was getting so high that the guests were actually staying in Kenya for a shorter stay. It moved from about 15 days to 19 days in about three years. So that was also making us less competitive, so the economy itself is also growing very very fast because it’s like the centre of East Africa region, and it’s also one of the most developed in that region. So there is a lot of economic activity going on, and that of course, when that starts, the hotels and the tourism industry also thrives.
Keep browsing videos and briefings on the Hospitality Channel for more expert insight into hospitality industry opportunities and trends.
Social media usage has changed the way guests learn about hotels. This can be a positive for independent hotels, as Rohan Patel explains in this TV show.
Social media usage is good for independent hotels
I mean for me, I was intrigued the other day, I read a story about a hotelier in Kenya, a very successful one, they run a mid-market product that does extremely well, and he said for me the only thing that I ever care about in terms of things I see, what customers say to me, is Trip Advisor, and that’s the only thing I look at, and if I’m number one on trip advisor, and its typically number one or number two, for the city of Nairobi, that’s all I care about. Because what influences peoples’ decision to make a purchase of a hotel room for example, it’s changed. There’s various factors which drove it before but this is certainly changing it significantly. I’m not saying it’s the only reason. People will not necessarily book a hotel on Trip Advisor, but these channels are there, this media is there, people consume it, and people are influenced by it very strongly, and so you’re responsive to these online channels and managing that, actually for an independent actually makes life much easier, because suddenly it kind of puts you on parity with a traditional big brand, which you weren’t on before, you can be placed significantly higher than then on something like Trip Advisor and people react to that. People are influenced by that. So it’s a great leveller for brands, which is great because I think people then judge a product for what it’s about and hat people think about it and not a brand promise which may or may not be necessarily be being delivered.
Family office investors are looking for opportunities in hospitality and leisure according to James Innes of Chrystal Capital Partners LLP, who explains further in this TV show.
Family office investors in the MENA region
Family office investors are very similar to institutional investors in terms of what they look for. They are looking for strong management scenes, robust businesses, they’re looking for growth scalability. They’re looking for things within the MENA region specifically which are going to benefit from the overall macroeconomic situation, so those industries which are going to benefit from five percent GDP growth, the boom in population, the expansion of the middle classes, the deregulation of legal financial situations. So in terms of specific sectors I think retail, consumer, hospitality and leisure obviously are all key sectors which the families are looking for.
Hospitality TV will continue to follow discussions around family office investors and other funding sources for the hospitality industry.
A huge asset in the African tourism industry is the unique landscapes on the continent. Elephants are a part of what makes Africa special, as Jackie Somers of The David Sheldrick Wildlife Trust discusses in this TV show.
African tourism industry driver
It’s important on a number of levels. In Kenya one in four jobs is reliant upon tourism. If we don’t have elephants we’re not going to have much, or wildlife generally, we’re not going to have that draw for tourists to come to this country. Elephants are really important for the eco system. You know they initially thought that in Tsavo National Park where there used to be huge elephant populations, at one stage they thought that they were destroying the park, there were too many elephants, what do they do, do they cull them or what happens? And nothing happened, they didn’t cull the elephants and naturally there was a dry spell and the population was reduced by natural means. And this is how it should be. And this is, you know, the elephants can understand. Elephants are very similar to humans, they grieve, they have a long lifespan like us, they remember, they look after their children, you know, it’s incredible how much like humans they are. So yeah, their eco system in the park then if you get a lot of elephants they destroy all the bush. But this actually was a good thing because it allowed the smaller species, the smaller plants to regenerate. So it actually opened up vast areas for grazing animals and things like that. So you know, it’s all there in nature’s plan, that’s why it’s important.
Hospitality TV has more great shows on the African tourism industry as well as briefings focused on a variety of tourism markets.
Developing talent takes time and investment. In this TV show Dario Filippone of Mangalis Management Group discusses their talent academy.
A focus on developing talent
We have created a special academy which is called the Talent Greenhouse. And this academy is the Mangalis Academy exactly for developing the talents that there are in Africa. Of course it is not as probably easy as doing this in Europe or in other continents in the world. But definitely there is lots of potential in Africa. And we started this programme exactly to enhance the potential of African human resources.
The African marketplace will attract different people for different reasons. In this TV show Bernard Forster discusses why he wanted to do business on the continent.
African marketplace opportunities
I mean I have to take a step back in the sense that I’m born in Africa, I’m born in Namibia, I grew up there. So for me there’s sort of a personal relationship. I spent a long time in Europe. I worked out of London a long time, focused on Europe. But I always had sort of the calling, I always wanted to go back home and do something in Africa. And you know, obviously in Namibia I’ve done some stuff there with, you know, with work as well. So it’s really the opportunity. It’s a high risk location still. It still has like I said earlier, high barriers to entry. And it has an opportunity, one has to stick it out, I mean you’ve got to be patient, you’ve got to have those relationships. But if you do and you are patient and you’re willing to take risks, I mean you have to take risks in Africa, then you’ll be rewarded.
The Hospitality Channel will continue to follow development in the African Marketplace and other hospitality markets.
Hotel investment opportunities needs an invested team on board to succeed. In this TV show Antoine Castro of Quantum Global Real Estate discusses selecting the right elements according to location.
Hotel investment opportunities for all
The location and what we will do, I mean we all know that risk is very high to develop hotels in Africa in general. So what we’ll tend to do is to secure a pool let’s say of the developer, the construction company and the hotel product, but to co-invest alongside of us so that we all have our interest in the development. I mean the selection of the location, the selection of the brand, the best brand for that location, for that country, the best partner to develop the product locally which has a track record, best in class practices, a code of conduct, I mean all these kind of things. So that we are comfortable in being successful in developing such a hotel and to open it in due time hopefully.
Keep browsing The Hospitality Channel for more great TV shows on hotel investment opportunities. Look out for the next 10 hospitality experts added to the Hospitality 250.