Ethiopia’s hotel chain development pipeline is among Africa’s top ten, according to W Hospitality Group, a firm that provides consulting services to hotel, tourism and leisure industries.
Currently, Ethiopia has eight chain hotels in the
pipeline with a combined number of 1,326 rooms. The Group reported that Western Africa has the highest number of hotels in development, after Nigeria overtook South Africa as the largest African economy. Sub-Saharan Africa has also seen a surge in international chain hotel investment. According to Trevor Ward, Managing Director of W Hospitality Group, this is due to the growing private sector interest in the hotel industry.
“Hotels are a part of the basic infrastructure of a country and a city-it is very difficult to attract foreign investors if there is nowhere for them to stay. Governments accept that tourism is a major job creator, so they are encouraging its development,” he said, noting that private investors are responding to the shortage of hotels in Africa. He said that developers want to remedy the relativity limited presence of international hotel chains in Africa.
Among the international chains in the pipeline in Ethiopia are Best Western, a US brand, and Pullman Hotels & Resorts, part of the French Accor Group. Other chains expected to open in Addis Ababa include Crown Plaza, Marriott, Ramada and Golden Tulip.
Ethiopia is the fastest economy in Africa and the African capital of international organizations such as the African Union and the United Nations Economic Commission for Africa. The tourism sector of the country is on the rise but there are just a handful of international hotel chains in operation or in the process of opening.
“Many hotel developers and owners in Ethiopia do not see or understand the need for brands to manage their hotels; they look at the vast number of unbranded hotels in Addis and question why they should pay management fees. The issue is that the three branded hotels currently operating in Addis Ababa: Radission Blu, Hilton and Sheraton Addis, can command a much higher price than the unbranded hotels – even though sometimes the quality of the unbranded hotels can be better than the big name establishments,” Ward told Capital.
He also said that investors have become interested in the Ethiopian market. “Ethiopia is of very great interest to developers and to brands. The economy has grown substantially, and that drives hotel demand. In addition, the country has huge potential to increase the number of leisure tourists.” Ward expects several deal announcements at the upcoming Africa Hotel Investment Forum set to be held in September.
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