Although the pipeline of hotels to the sub-region is encouraging and indicative of strong investor interest, the low completion rate of projects could be troubling for the development of the hotel sector. It is also difficult for the hotel chains whose expansion plans in these markets rely on partnerships with local and foreign investors to develop these hotels. All the major global hotel chains have strong expansion plans to increase their operating presence on the continent, and in West Africa.

The growth strategy for these hotel chains have traditionally relied on their development teams signing deals for new build hotels, primarily with their flagship brands, with local owners. However, more chains are adopting creative expansion strategies, such as conversions and rebranding of existing properties, acquisition of existing local hotel operators, effecting growth through the franchise model, or developing owned hotels first.

Senior representatives from major hotel groups such as Hilton, Carlson Rezidor and Mangalis, and other key hotel experts will be discussing growth strategies in the ever-changing West African economic environment at the upcoming West Africa Property Investment (WAPI) (http://APO.af/jyUvGs) Summit to held on November 28 & 29 at the Eko Hotel, Lagos Nigeria.

Hilton recently announced a plan to support the conversion and rebranding of 100 existing hotels through its Hilton Africa Growth Initiative, by committing US$ 50 million to supporting these conversions. Commenting ahead of the conference, Mike Collini, Vice President Development Sub-Saharan Africa, Hilton, remarked on the opportunities presented by the inadequate hotel supply. He said: “to overcome this we are looking at rolling our focused service brands in key markets with a focus on our Hilton Garden Inn product. We are also pioneering the use of modular construction with a new Hilton Garden Inn in Accra, which is a fast and cost-effective build model for owners and developers.”

Andrew McLachlan, Carlson Rezidor’s Senior Vice President Africa & Indian Ocean for Development, said in a direct comment to Estate Intel, “Today we have 17 hotels open or under development in the region and in our new 5-year development strategy we have identified five Tier 1 Cities in West Africa (Lagos, Abuja, Accra, Abidjan and Dakar) where we see scaled growth opportunities…across the luxury to midscale hotel segment.” McLachlan also commented on the model of conversion of existing hotels, saying that the group sees an opportunity to adopt this model to reposition the hotel under its management, particularly in cases where the existing hotel may not be performing to its full potential.

Newcomer and regional hotel chain, Mangalis Hospitality Group, intends to increase its presence in West Africa, in the next five years. Wessam Oshaka, in a statement to Estate Intel reiterated the group’s “ambition to operate at least 13 hotels by 2020 in West Africa.” The group had initially focused development on owned hotels in core markets such as Cote d’Ivoire and Senegal, but the second phase of development will now focus on management agreements, resulting in a portfolio that will comprise 75% owned hotels and 25% managed hotels. Oshaka explains: “Africa as we know, suffers from a lack of properties responding to the needs of modern travelers. The region comes with its challenges especially in terms of financing, logistics and skilled workforce. Taking all these factors into account, we adopted the most suitable approach for a healthy growth plan.”