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“Traditional hospitality industry changing in Africa”
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Monday, 18 June, 2018, 08 : 00 AM [IST]
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 Swiss-Belhotel International one of the world's fastest-growing international hotel and hospitality management groups currently manages a portfolio of more than 145 hotels, resorts and projects located at Cambodia, China, Indonesia, Malaysia, the Philippines, Vietnam, Bahrain, Egypt, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Australia, New Zealand, Bulgaria, Georgia, Italy, and Tanzania. The group provides comprehensive and highly professional development and management services in all aspects of hotel, resort and serviced residences. The company has recently chalked out an aggressive expansion strategy for Africa and the Middle-East. Laurent A Voivenel, senior VP, operations and development for the Middle-East, Africa and India for Swiss-Belhotel International, in an email interaction with Shraddha Joshi spoke about opportunities in the hospitality industry in Africa and the growth possibilities going forward. Excerpts:
How do you see the current scenario of the African hospitality industry? What is the market value of the hospitality industry in Africa, and what opportunities does it offer for the investors?
Tourism has huge potential to generate lasting development opportunities in Africa. According to industry reports, Africa’s hospitality sector remains resilient and is poised for further growth over the next five years. The industry has been strengthened by both domestic and in-bound travellers. There has also been considerable growth in visitors from China and India.
The hospitality industry contributed $165.6bn – or 7.8% – to Africa’s GDP in 2016 and this figure rose by 2.9% in 2017, according to World Travel & Tourism Council. Meanwhile, the number of planned hotel chain developments has doubled since 2009 from around 30,000 rooms in 144 hotels to 73,000 rooms in 417 hotels.
Overall there is a lot of activity in the market for new hotels which offers investors, especially private equity investors, a great opportunity in the mid-market segment. Africa starts from a low base when it comes to supply of high-quality hotels in the continent. It also has the right demographics for growth in the middle-class.
What are the prevalent trends in the African hospitality sector? Can you throw some light on the future trends as well?
The traditional hospitality industry is changing in Africa. Both upward and downward trends are noticeable across the continent. More international brands have started entering the market and at Swiss-Belhotel International we recently signed the management agreement for Swiss-Belresort Zanzibar.
We have seen a big growth in the domestic sector. The increase in intra-Africa travel is of particular interest for the hospitality sector because at least four out of every 10 travellers in Africa are from within the region. There has also been a shift from business travellers to leisure travellers. Around 69% of all travel spend in Africa last year was made by leisure travellers, with the remaining figure being business.
Alternative accommodation avenues like Airbnb, rapid technological advancements and online travel agencies have emerged as major disruptive forces in the market.Travellers, especially the millennial generation, are looking for experiences and hotels need to be more hands-on on creating these unique experiences for their guests, and that’s where the hospitality staff play a pivotal role. The industry needs to listen to consumers on where there are gaps and boost markets that need the growth.
What, according to you, are the challenges the hospitality sector is facing? How should they be mitigated?
There is a shortage of quality mid-market hotels in the continent, and as the middle- class grows, we are seeing higher demand for affordable accommodation.
Another challenge facing travellers within the continent is the process of securing visas for visitors. However, some nations such as Ghana, have made great strides to improve the ease of getting a visa on arrival or have implemented visa-free travel for Africans.
Weak infrastructure and inter-connectivity predominates outside the capital cities in most African countries. An under-skilled workforce remains a major challenge and there is need for development of human capital. African professionals once trained can add tremendous value to the hospitality and tourism experience and carve out a niche that reflects national character, tradition and culture.
The risk of external events always lingers on the horizon, ready to disrupt any positive impacts of a robust domestic economy.
Tell us about the demand for and supply of rooms in the region, and the kind of offerings the hospitality industry provides to the visitors?
Africa’s hotel sector has proven to be durable in the face of low growth because demand has continued to surge. We expect continued growth as the continent experiences better connectivity, access to low-cost airlines, and more countries embracing visa-free travel within the region. These factors will be major drivers for growth in the hotel industry across the continent.
Africa is an exciting market because it is still in its infancy and there is plenty of room for growth.
Which are the countries offering great leisure time for the visitors, and what should they expect from these countries?
Africa offers many hidden gems with the most diverse experiences for leisure travellers.
Though every destination is unique in Africa, topping the list of travellers are South Africa, Tanzania, Kenya, Mauritius, Ethiopia, Lesotho, Morocco, Reunion Island, etc. It depends on what a traveller is looking for but there is no place like Africa when it comes to natural beauty and wildlife.
Kenya is known as an East African paradise filled with abundant wildlife, mountains, flora, fauna and islands and is ideal for family holidays. If you want to immerse yourself in nature, then Lesotho is the place to be boasting an array of majestic mountains adorned with the best that nature has to offer.
Equally captivating is Tanzania with stunning tropical beaches, lush spice gardens and exciting wildlife parks. Close to Europe, Morocco has a majestic and medieval feel filled with North African culture. Nestled in the warm Indian Ocean, Reunion Island is described as the best kept island paradise. It boasts remarkably active volcano and a multitude of hiking trails offering dazzling natural sights. South Africa is perfect for a great summer adventure offering the best beach holidays. The Republic of Seychelles is a hidden gem located in the Indian Ocean and is perfect for a romantic getaway.
What is the outlook for the African hospitality industry? Which are the emerging markets in Africa, and what are the reasons for it?
According to the World Tourism Organization (UNWTO) international tourist arrivals grew by a remarkable 8% in 2017 in Africa to reach a total of 62 million. Arrivals grew by 13% in North Africa, while Sub-Saharan Africa arrivals increased by 5%. This strong momentum is expected to continue in 2018.
Many destinations in Africa have invested in improving and promoting the quality of their tourism offering as well as infrastructure and are reaping the benefits. Some countries are growing at a faster pace than others. The tourist hubs of Tanzania, Kenya, South Africa, Mauritius, Seychelles, Madagascar, Ethiopia and Senegal are forecasted to see significant growth in visitors. Commodity-export countries such as Nigeria and Algeria will also see an increase in business travellers.
Share some information about Swiss-Belhotel International’s hotels and their operations in Africa? How are you strengthening your position in the African region and what can we expect from you in the near future?
At Swiss-Belhotel International, we recently signed a management agreement with Zanzibar Crown Hotel and Resort Limited to operate the beautiful Swiss-Belresort Zanzibar expected to open for business in 2019. This marks our group’s debut in Tanzania, and with it East Africa, that is currently witnessing a massive demand for quality hotels. Located on an idyllic salt-white beach, Swiss-Belresort Zanzibar is being developed at an investment of US$25 million on the prime Indian Ocean coastline merely 3 km from Abedi Amani Karume International Airport and 7 km from the Wonders Palace, Stoned Town and Forodhani Gardens.
The Swiss-Belresort Zanzibar will be among the few internationally branded resorts operating in the island to accommodate upper/midscale travellers which gives us access to one of the fastest growing market segments that we are eager to capitalise on. Our aim with this project is to provide guests all the fun, comfort and enjoyment without the hefty price tag.
We have chalked out a very aggressive expansion strategy for the Middle-East and Africa with 17% of our global portfolio of hotels comprising 3,500 rooms centred in the region. Our goal is to have 20 hotels in operation and 10 under construction by 2021. Out of these five projects would be in Africa while the remaining will be in gateway cities across the Middle-East with a significant presence in the GCC. Built on a heritage of passion and professionalism, our ultimate aim is to position Swiss-Belhotel International as the best alternative to blue chip companies offering superior returns, unbeatable value and unforgettable experiences.
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