African Hotels See Dizzy Growth, But Zimbabwe-Listed Group Is Laying Off Workers

African Hotels See Dizzy Growth, But Zimbabwe-Listed Group Is Laying Off Workers

Nigeria and Angola, the two African countries hit hardest by falling oil prices, have the highest number of hotels in the development pipeline this year, BusinessDayLive reported.

Global and domestic hotel chains are investing more than ever in Africa, but Zimbabwe-listed hospitality group, African Sun, has laid off nearly 250 employees citing dwindling tourist numbers, lower room rates and the country’s deteriorating economic environment.

African Sun transitioned it business model from a hotel operating company to a hotel investment management company in October, according to Daily News. The average daily room rate fell 5 percent from $98 in 2015 to $93, said African Sun managing director, Edwin Shangwa.

There are 64,000 African hotel rooms in the development pipeline this year, according to an industry survey compiled by the Lagos-based W Hospitality Group, BusinessDayLive reported.

That’s 30 percent more development activity than 2015 and more than twice the development pipeline in 2009. However more than 30 percent of the hotel deals signed between 2009 and 2013 have still not been opened, mainly due to the lack of finance, said Trevor Ward, W Hospitality Group’s managing director.

Carlson Rezidor, one of the world’s largest hotel groups with headquarters in Minneapolis and Belgium, is delivering.

It opened five new Radisson Blu hotels in Africa the first half of 2016 at the rate of about one every two months, according to eTurboNews.

“In the last 24 months, we have signed a new hotel deal in Africa every 37 days. And it’s not just about signing hotels; we are delivering our pipeline,” said Carlson Rezidor Executive Vice President Elie Younes. “We have opened a hotel in Africa every 60 days. In South Africa alone, we now have 14 hotels. We aim to maintain this great momentum by opening four more hotels in the second half of 2016.”

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New African Radisson Blu properties include the upscale Radisson Blu Hotel Nairobi Upper Hill in Kenya (271 rooms); Radisson Blu Hotel, Marrakech Carré Eden in Morocco (198 rooms); Radisson Blu Residence with 187 luxury hotel apartments in Maputo, Mozambique (the group’s first residence concept in Africa); Radisson Blu Hotel Abidjan Airport, Ivory Coast (261 rooms) — West Africa’s tallest hotel at 106 meters; and Radisson Blu Hotel 2 Février in Lomé, Togo (320 rooms).

In addition to opening African hotels, Carlson Rezidor signed four new hotels including a new Radisson Blu Hotel Harare in Zimbabwe (245 rooms), a Radisson Blu Hotel in Durban Umhlanga (207 rooms); a Park Inn by Radisson in Quatre Bornes, the new commercial hub of Mauritius, and a 5-star, 244-room luxury Emerald Grand Hotel & Spa in Lagos, Nigeria. The group is entering its 28th African country, eTurboNews reported.

“Africa is Rezidor’s biggest growth market,” said Wolfgang M. Neumann, president and CEO of the Rezidor Hotel Group. “Our group’s total portfolio comprises 69 hotels in 28 countries, with over 15,000 rooms in operation or under development. Radisson Blu leads the way with more hotel rooms under development than any of the other 85-plus hotel brands active in Africa today. Our ambition is to be the leading player in the travel and tourism sector across the continent.”

Together, Nigeria and Angola account for almost 30 percent of the total new hotel development pipeline, according to BusinessDayLive.

The high level of hotel investment in the two West African countries comes amid dwindling economic expansion due to plunging government revenues as a result of the weak oil price. South Africa is No. 9 for planned hotel development on the continent, with about 2,058 rooms planned in 11 hotels.

City Lodge Hotels said it’s building a 169-room hotel in Nairobi, scheduled to open in 2017.

Hotels are also scheduled for construction in Dar es Salaam, Maputo, and Windhoek, said Andrew Widegger, financial director.

Sun International, South Africa’s second-largest listed hotel and gaming group by market value, is developing a casino property in Menlyn, Tshwane, including a 245-room, five-star hotel.

Whether the hotels in the pipeline actually open or not will depend on financing, Ward said.