HTI Consulting CEO Wayne Troughtong
Acknowledged as one of the African continent’s leading hospitality investment experts, Wayne Troughton of HTI Consulting shared unique insights in the firm’s first ‘Virtual Hotel Club’ held in early July, a dynamic and informal Pan-African digital platform that saw 295 registrations across 15 countries.
Data was gathered from a survey that covered 14 regional and international operators active in the African hotel space (41 hotel brands and 219 projects currently under development). These included the likes of Hilton Worldwide, Marriot International, Radisson Hotel Group and Accor Hotels, amongst others.
Development sentiment largely positive
According to Troughton, whilst the African hospitality industry is facing unprecedented challenges and obstacles in light of the global pandemic, he noted that development sentiment remains optimistic amongst the majority(57%) of hotel owners as reported by operators on the continent.
“Despite closures and significant performance declines, long-term investment fundamentals for the Sub-Saharan region remain positive despite significant short to mid-term challenges currently impacting the sector,” he said.
“Of a total 219 hotel projects currently In Sub Saharan African pipeline a large proportion (68%) of these projects are proceeding as planned, with only 18% currently on hold for a limited period,and 13% on hold indefinitely.” he stated.
“Concerns amongst hotel owners are, of course, still apparent and, for several, a ‘wait and see’ approach relates to factors such as uncertainty around travel ban lifts in various markets, how to restore guest confidence, and the impact of Covid-19 on hotel valuations. However, the optimism displayed by many owners generally relates to understanding of the sector and adoption of a longer-term outlook,”he explained.
Outlook geared to opening doors
Despite the current environment, construction related businesses in several countries resumed activity as early as possible after lockdowns eased,commented Troughton.
“Encouragingly, this has resulted in 21 projects (representing 2946 hotel rooms in 15 African countries) still expected to open in 2020, with 52% of projects expecting short-term delays of 3 -6 months,” he said. “Longer term delays (9-12 mths or 12 mth+) are typically being seen on those projects that were in earlier (or planning) phases of development,” he stated.
“These delays can generally be attributed to uncertainty around how long travel lockdowns will continue. However, around 30% of projects under construction don’t expect COVID-19 to cause any delays to their ongoing development,” he said.
Hotel owners are clearly taking a long-term investment outlook and are expecting COVID-19 to be largely neutralised prior to their hotels opening. This relates particularly to those in the early stages of planning.
Development pipeline remains healthy
Of the overall Sub Saharan Africa Development pipeline there are 219 branded hotels (representing 33 698 hotel rooms) across 38 markets.
“East Africa remains the region with the strongest hotel pipeline, followed by West and then Southern Africa. East Africa has 88 branded hotels currently in the pipeline, West Africa sees 84 branded hotels in its pipeline with Southern Africa sitting on 47 hotels,” stated Troughton.
Of the 21 hotels total projects expected to open doors in 2020, East Africa (40% of total supply), will see 1,134 rooms come on board, with the top cities being Antananarivo (22%), Dar es Salaam (20%) and Addis Ababa (20%).
West Africa (47% of total supply) sees 719 rooms planned to enter in 2020 across major cities including Accra (28%), Bamako (28%) and Cape Verde (24%).
Southern Africa (23% of total development pipeline) sees 963 rooms planned to enter in 2020, with South Africa – Johannesburg (71%) and Durban (21%) – seeing the predominance of activity, followed by Zambia.
Over the past three months HTI Consulting has engaged in numerous discussions with hotel owners who, Troughton states, have navigated different cycles during COVID-19 from survival (as hotels closed) to cost containment, defining hygiene safety protocols, staffing plans and ultimately, reopening strategies.
As several economies slowly start to open, so too have many hospitality businesses who are remaining positive and committed to the industry and demonstrating the determination necessary to over coming current adversities.
Doing the deals
“Despite pressured economic environments and tough decisions, many hotel operators have, been able to successfully conclude and sign deals with owners during the lockdown period. A total of 15 new hotel deals were concluded by 7 operators in 8 countries, from the period March – June,” stated Troughton of HTI Consulting.
Feedback indicates these deals were close to fruition prior to the COVID crisis, with owners showing strong sentiment to continue with the projects. Further feedback from operators indicates these deals were also typically signed in primary African cities such as Abidjan, Accra, Lagos and Durban that boasted strong and diverse hospitality markets prior to the crisis. These locations are also likely to recover at a quicker rate than secondary nodes, believes Troughton.
“Select operators who indicated that no deals were signed during this period pointed out that opportunities remain rife and that new enquiries are continuing to come through,” he said,
“It is anticipated that a lag will occur, with new owners typically being more cautious and awaiting to see how recovery unfolds,” he said. “Concerns have also been raised by owners around access to finance going forward as well as the willingness of the banks and financial institutions to fund hospitality projects at this point in time,” he continued.
“Whilst we haven’t seen any distressed sales at this point, with banks largely keeping hotels afloat, this may well change depending on the time frames we’re looking at to a return to ‘new normal’ as well as the potential resurgence of the virus in certain areas. The next 2 – 3 months will prove to be crucial, as many hospitality businesses do not have plans in place to ensure sustainability post this period.”
Opportunity sees operators doing it differently
“In several instances, feedback from large operators indicates a distinct shift towards conversions over greenfield development going forward, with a more flexible approach to the renovations and PIP costs.”
“Some operators are viewing this time as an opportunity to finalise forward planning during lockdown,” said Troughton “In several instances they have been able to take advantage of government support during this period in order to ensure they are able to streamline and accelerate internal approval processes, create more flexibility around brand stance, enhance their ability to pitch their products correctly to the local market and offer greater value and affordable experiences along with analysing fee structures over a select period.”
“Whilst lockdowns have placed many hospitality businesses and investors in a stalemate position over the past few months, we’ve noticed a positive change over the past few weeks as more as more hospitality businesses resume activities and we see a significant uptick in the commissioning of hospitality advisory assignments,” noted Troughton.
“It is reasonable to assume that a more cautious approach will be taken by hotel owners and investors in evaluating their investment strategy,” he said.
“Independent hotel owners mayindeed find it more difficult than the larger international brands to weather this current scenario. This too because branded hotels, and their new highly publicised hygiene protocols, may make for a more secure market and therefore allow them to see a more effective bounce-back and recovery.”
“Additionally those markets that are strongest in the area of domestic business travel (and then domestic leisure) should be amongst the first to recover.Indeed, focusing on the local market is what helped Asia recover from the SARS epidemic in the early 2000s.”
“For those owners and operators taking the the time to understand the changing markets we are facing, and willing to adapt to drive new demand, the medium to long-term outlook remains good,” stressed Troughton. “At HTI Consulting we continue to believe in the tourism potential in the region and strongly encourage further support from governments and brand managers to allow owners to minimise further losses and support recovery,”
“Despite current challenges and the overall uncertainty that trouble us all, there will be better times ahead and the travel market will eventually emerge stronger and more resilient. As governments slowly roll back travel restrictions and prepare to reopen society, the future winners are those that build a future based on a strong risk mitigation approach and display flexibility and innovation,” he concluded.
Released by: Kirsten Hill for HTI Consulting
Radisson Hotel Group unveils Radisson Hotel Casablanca Gauthier La Citadelle, its second brand in Morocco
Radisson Hotel Casablanca Gauthier La Citadelle (Source: Saadiyah Hendricks)
Radisson Hotel Group is proud to announce the debut of its second brand and third hotel in Morocco with the signing of Radisson Hotel Casablanca Gauthier La Citadelle in partnership with Al Hoceinia Hospitality. With construction already underway, the hotel is scheduled to open in 2023 and will consist of 133 guestrooms and suites.
Located in the heart of Casablanca’s vibrant and exclusive Gauthier district, one of the prominent corporate, financial and entertainment districts, Radisson Hotel Casablanca Gauthier La Citadelle is just 2.5 km from the glistening La Corniche, the charming Old Medina, and Hassan II Mosque, the second largest mosque in the world. The hotel will offer a unique view over the Arab League Park and will also form part of La Citadelle, a new, premium mixed-use development which will comprise of residences, offices and retail outlets.
Ramsay Rankoussi, Vice President, Development, Africa & Turkey, Radisson Hotel Group, said, “Morocco is a strategic bridge between Europe and the rest of Africa, and a key focus market in our African development strategy. We aim to grow our Moroccan portfolio to over 15 hotels within the next three to five years, and Casablanca is a key city where we are looking to expand our footprint to more than five hotels. Radisson Hotel Casablanca Gauthier La Citadelle is the Moroccan debut of our fastest-growing brand in Africa, and marks our third hotel in the country, joining our other two successful properties, Radisson Blu Hotel, Casablanca City Center and Radisson Blu Hotel, Marrakech Carré Eden. We expect to introduce each of our remaining three brands but also cover all segments, from business hotels to resort properties, as well as serviced apartments. I would like to take this opportunity to thank our partners, Al Hoceinia Hospitality, for their trust as we look at working together to reinforce our presence across Morocco with additional properties.”
Hamza Laghrari, Managing Director of Al Hoceinia Hospitality, Casablanca Gauthier La Citadelle managing company said, “It is with great pleasure that we commence this journey and long-term relationship with Radisson Hotel Group and together introduce the upscale Radisson brand to the Moroccan market. The hotel which will be equipped with the latest innovation to accompany the changing expectations of business customers, will provide a new and an ideal venue for business and leisure guests and an enhancement to the city of Casablanca. As part of our group’s diversification strategy, the tourism industry is an important growth sector in which we see opportunities in the near future, and we are pleased to partner with Radisson Hotel Group to introduce this property and eventually many more. We aim to open a total of five hotels by 2025 in Casablanca, Rabat, Marrakech and Tangiers.”
The Scandinavian-inspired, upscale brand, Radisson, will make its Moroccan debut with the new build, 133-room hotel, consisting of contemporary superior rooms and suites. Radisson Hotel Casablanca Gauthier La Citadelle will enable guests to focus on a work/life balance and find harmony in their travel experience, while enjoying the hotel’s modern, state of the art technology, and design. Various cuisine options will be available at the hotel’s all-day dining restaurant, patio as well as its panoramic rooftop restaurant. Meetings and event venues will include a large conference and function room as well as five meeting rooms. Perfectly equipped for guests to strike a healthy balance, the hotel will offer both a fitness room and a rooftop pool.
Casablanca Gauthier La Citadelle (Source: Saadiyah Hendricks)
Radisson Hotel Group’s top priority is the continued health, safety and security of its guests, team members, and business partners. The Group applies its Radisson Hotels Safety Protocol created in collaboration with SGS, the world’s leading inspection, verification, testing and certification company, and recently unveiled its new comprehensive testing program as the first hotel group to roll out a rapid testing service for meeting and event attendees at properties across its EMEA portfolio.
Radisson Hotel Group renews partnership with SGS and continues global application of the Radisson Hotels Safety Protocol
Radisson Hotel Group is proud to announce the extension of its partnership with SGS, the world’s leading inspection, verification, testing and certification company recognized as the global benchmark for quality and integrity, and the continued global roll out of the Radisson Hotels Safety Protocol to further strengthen Radisson Hotel Group’s existing rigorous sanitation, cleanliness and disinfection program across its portfolio around the world.
In 2020, Radisson Hotel Group worked closely with SGS to conduct a thorough review of all existing health and safety processes and worked with a team of experts to develop and validate the Radisson Hotels Safety Protocol, a comprehensive series of 20-Step and 10-step protocols for hotels and for Meetings & Events. These enhanced protocols which include comprehensive health and safety procedures such as increased cleaning and disinfection especially in high touch point areas, sanitizing stations, team member personal protective equipment (PPE), physical distancing measures and hybrid solutions for meetings, improved air circulation, and strict food safety procedures, have all been validated by SGS, building on local requirements and recommendations to ensure guests’ safety and peace of mind from check-in to check-out. In addition, Radisson Hotel Group has adapted the Radisson Hotels Safety Protocol specifically for Resorts, with attention to services like sports, spa facilities and kids’ clubs.
The Radisson Hotels Safety Protocol is an official cleanliness and disinfection label which can be used by hotels only after an in-depth centralized validation process has been conducted by SGS. In addition, selected hotels receive the additional SGS Disinfection monitored & Cleaning Checked label upon completion of a comprehensive local audit including on-site testing using the latest technology.
“At Radisson Hotel Group, the health and safety of our guests, team members and partners continue to be a top priority. The world has been fundamentally changed by COVID-19, so it is key that we continue innovating and striving to deliver a clean and safe environment to all who walk through our doors, stay in our hotels and conduct meetings in our properties. SGS has been a key partner to ensure our hotels are providing the best and latest health and safety measures, and we are proud to renew our partnership for a second year,” says Federico J. González, CEO, Radisson Hotel Group.
Frankie Ng, CEO of SGS, adds that: “Expert and documented validation by SGS of health, safety and prevention protocols related to COVID-19 has allowed the Tourism industry and Radisson Hotel Group to inspire trust and confidence to travelers around the world. The goal of our continued partnership is to ensure that the highest hygiene standards are met, and to protect guests as well as Radisson Hotel Group team members and partners.
As part of the Group’s ongoing commitment to the safe return of travel and to allow for a swift return to business, Radisson Hotel Group recently launched its new comprehensive testing program as the first hotel group to roll out a rapid testing service for meeting and event attendees at properties across their EMEA portfolio. In addition, hotels will be able to direct guests to an easily accessible and affordable PCR testing location. The comprehensive testing program for guests is groundbreaking in its coordinated approach across EMEA to reinstall confidence and peace of mind to travelers as the world returns to business by providing a safe environment and seamless testing facilitation.
Radisson Hotel Group continues play a key role in the development of the World Travel and Tourism (WTTC)’s “Safe Travels” and “Seamless Travel” health and safety protocols, a global framework and stamp for a safe return to business and to create consistency across the Travel and Tourism industry. The WTTC’s Safe Travels stamp is currently endorsed by over 200 destinations around the world.
Reimagining the Future of Sustainable Tourism in Africa
At Spurt! We are always looking to amplify solutions to critical and specific challenges in Sub Saharan Africa. This week, we reviewed Why Tourism Desperately Needs a New Performance Metric Post-Pandemic by Lebawit Lily Girma. The wake of COVID-19 and its effects on the Tourism sector has unearthed realities that the sector’s metric for success needs to go beyond the numbers; the arrivals and GDP contributions. There’s a solid case for other sustainable ways for measuring success that is as inclusive and effective in capturing the real value add brought by tourist activities. The ongoing equity issue and the colonial legacy entrenched in the sector have to be front and centre to address these.
Tourism is one of the most important economic sectors. According to the UN, It employs one in every ten people on Earth and provides livelihoods to hundreds of millions more. Due to the anchor role it plays in boosting economies, it is imperative that key stakeholders, with the government taking a leading part, take active steps in safeguarding the growth and sustainability of the sector. The sector’s importance notwithstanding, transparency
It is always subjective what the actual cost of a destination is. In Africa, there’s a pervasive question around the trickle-down effect of the money spent on tourism to the local communities and any transformative change that has occurred over time. Historically, the tourism value chain has always been fragmented. According to a McKinsey report, there has been limited coordination among the small and medium-sized enterprises (SMEs) that make up a large portion of the sector.
The information champions a more proactive government involvement in the industry through fostering creative alliances between the public and private sector. This cross-sector collaboration can act as an integral leadership centre in tackling emerging issues in the industry and mainstream responsible tourism. The Brookings Institution report on Africa’s tourism potential lauds the governments of Morocco, Mauritius, Kenya, and South Africa to prioritise the tourism sector as a critical driver of growth, allocating resources towards the development of the tourism sector.
Responsible tourism allows local communities to earn a modest income from the tourism activities while supporting conservation efforts. As Lebawit rightfully points out, all efforts geared towards building back the sector better will not be complete without local communities’ inclusion. As the call to decolonise the tourism sector become more substantial, it is becoming clear that innovative and localised tourism is key to a solid and resilient industry. Creative organisations like Turn Up Travel in Kenya are revolutionising responsible tourism through curating unique experiences through striking a balance between destination selection, commerce, conservation and community. More local organisations like Turn Up need to find the root is taking centre stage in diversifying the sector.
At Spurt, the conversation on championing responsible tourism excites us. Local MSMEs are front and centre in the drive to reimagine how a sustainable sector would look. We aspire to be the platform for fostering the growth of scalable local businesses in sub-Saharan Africa that adhere to the best performance and ethical standards. With our research and analytics capabilities, strategic advisory, stakeholder engagement, and implementation support, we are eager to work with local companies like Turn Up by convening, developing, and exciting the best young African thinkers passionate about working for their continent’s economic development.
Written by: Spurt!