Hotel development

Hotel consultants in Africa
April 19, 2018
Hotel Valuation
May 29, 2018

Hotel development in Africa


Hotel development in Africa continues to be a primary focus for many international operators, with most indicating aggressive pipelines in the medium term. Hilton Hotels & Resorts revealed their goals for hotel development in Africa over the next five years. The pipeline currently has 100 hotels planned, which will increase the amount of rooms available on the continent by approximately 20 000 through brands such as DoubleTree by Hilton and Curio Collection by Hilton.


The development plans of AccorHotels are also extensive, with a pipeline in the Sub-Saharan region of 27 hotels, totalling 4 780 rooms in 11 countries. The newly renamed Radisson Hotel Groups’ development plan includes more than 40 hotels under brands such as Park Inn by Radisson and Radisson Collection. Due to its recent acquisitions, Marriott International will see the biggest growth in terms of hotel development with a pipeline of more than 300 hotels opening in the next five years in the Middle East and Africa.


Although operators are currently planning high levels of hotel development, not all of the hotels planned will be realised. Signed operator agreements are in place, but this does not automatically translate into a new hotel development. Large operators do not invest in bricks and mortar development, so hotel development is therefore reliant on investments from:


  • High net worth individuals who are interested in hotel development;
  • Large development companies who focus on hotel development and other real estate;
  • Large companies from other sectors that are diversifying into hotel development; and
  • Hospitality funds who prioritise hotel development.


Delivery on the pipeline for hotel development indicated by operators is therefore determined by the ability of the aforementioned groups to raise finance and put together a development team that is able to deliver the project and operator requirements.


It is thus possible that some of the hotels that have been planned for development will not be realised. Market downturns, an inability to raise finance, and an inability to get the project off the ground can result in the project being abandoned. Therefore, when assessing opportunities for new hotel developments in diverse markets, and analysing the future supply that is planned, HTI Consulting usually only takes those hotel developments that are already under construction into account. If not already under construction, hotel development in Africa can take an extensive amount of time to get off the ground.


A good case in point is the Marriott hotel development in Accra, which has taken approximately ten years to be realised. This is just one example of the many hotel projects in Africa that have been significantly delayed or abandoned. This highlights the importance of market and financial feasibility studies for all new hotel developments being planned in the African market. Such studies can define the available opportunities, as well as match the proposed concept with the right international operators.


Quick Contact
close slider