Many hospitality markets within West Africa remain immature with limited penetration from international brands. Although some markets, such as Accra and Dakar, have seen an increase in the number of branded properties, other West African cities have yet to benefit from the quality and international standards that a renowned brand can bring.
Selecting the right operator for a hotel is a complex process, so once the market and financial feasibility study has been undertaken, investors should immediately undertake an operator selection process. Operators should ideally be involved in the design process, in order to ensure that the hotel is aligned with the operator’s brand standards and overall concept.
Brand penetration, positioning, pricing, and owner protection are all key factors that should be considered when going through the operator selection process. In addition, operators with experience in West African markets, and, ideally, a regional head office can offer a competitive advantage. The cultural complexities, as well as the language barriers of francophone and anglophone West African countries can be a challenge for new market entrants. Development of a new hotel with a brand that complements an existing brand under the same management company provides operational and cost synergies, whilst potentially enabling faster market penetration.
Due to the greater prevalence of first-time owners and the early stage of development of the West African market, owners often lack the experience and capabilities needed to effectively negotiate these contracts. Hotel operators are far more experienced in the operator selection process and as such, have a distinct advantage when entering the negotiation stages. Hospitality consulting firms experienced in operator selection and management contract negotiation are therefore critical to ensuring a contract that is mutually beneficial and balanced. One such firm with offices both in Cape Town and Lagos has successfully run various operator selection processes and negotiated a total of 11 management contracts within the last year, all with large international operators. The company has also been responsible for concluding some of the biggest operator selection agreements in West Africa, as well as in Southern Africa, including the Radisson Blu Accra and the Radisson Red at the V&A Waterfront in Cape Town.
The firm in question is HTI Consulting, and our team of financial, business management, marketing, and hospitality experts have been responsible for advising on total investments amounting to some 50 billion US dollars. While part of our company’s focus is on operator selection in West Africa and worldwide, it is also positioned to assist with valuations, raising capital, and asset management.