ETHIOPIA: Ethiopia On Her Way To Become Chain Hotel Hub

Ethiopia is ranked among the top 10 leading markets in Africa for international chain hotel developments while Egypt leads the group with 18 new hotel chains being developed. Currently, Ethiopia gripped 8th position with 84 per cent hotel development pipeline and under construction disclosed the survey presented at the Africa Hotel Investment Forum (AHIF) in Addis Ababa.

The hotel business boom in Africa is topping the global market. Taking its share from the African market, Ethiopia has eight new global brand hotels under pipeline. Across the continent, 270 hotel chains are in the pipeline with the expected number of rooms, exceeding 30,000. Egypt is followed by Morocco, Nigeria, Algeria, Tunisia, South Africa, Libya, Ethiopia, Kenya and Rwanda. Although the leading nations are mainly from northern Africa, countries in Sub-Saharan Africa (SSA) are gaining momentum in hotel development projects.

The information obtained from Bench Events indicates that, out of the top 10 global hotel operators, Hilton Worldwide leads with about 7,250 rooms in new hotels. However, Marriott leaps forward, leading with the development of 36 new hotels across the continent. Hotel Partners Africa also identified the top ten opportunities for investors keen to develop hotels in Africa. In West Africa, Nigeria presents the biggest opportunity, with the strongest economy on the continent with 34 branded hotel bedrooms per million population. Ghana with 59 bedrooms and Cote D’Ivoire with 61 bedrooms also present great opportunities with very strong demand.

Rwanda, Angola, Tanzania, Mozambique and Zambia present 29, 48, 63, 79, 122 bedrooms respectively. Despite the existence of great development potential in the region, the political and other risks tend to suggest that new international investment will be limited in the near future. However, Libya continues to attract investors despite the political unrest. Project returns also identified to bring high revenue.

Hotel values in the majority of these locations have been strongly growing. In African countries, 76 per cent of hotel investment returns have been higher than combined averages across other property investments. African countries have shown significant annual growth over the last six years including Zambia and Ghana at 6.5 per cent, Tanzania 6.3 per cent and Angola 6.2 per cent from the most under-supplied opportunity markets. Ethiopia is also listed among the top markets with several deals in process and new chain hotels venturing into the untapped hotel development. Hilton signed a deal for upscale Hilton Awassa Resort & Spa which is expected to open in 2020. Marriott International in partnership with Sunshine Business, opened Africa’s first Marriott Executive Apartments in Ethiopia’s capital.

“Hotel developments prove that it’s an exciting time for Ethiopia which is being transformed from the traditional market to a much developed and less riskier business environment. Investment by major operators evidenced that luxury is coming to the growing nation,” said Estelle Verdier, Managing Director of Jovago East and Southern Africa.

On the other hand, hosting the glamorized and biggest AHIF, which was attended by major global industry players and policy makers, placed Ethiopia in a better position to attract more investments. During the event, major brand operators such as Wyndham Group, Ramada Addis, Inter Continental Group, Accor Group, Western International Inn linked management agreements to run star-rated hotels which would open doors between end 2015 and 2018. The AHIF has also been seen as fresh negotiations expected to bring more chain hotels to Ethiopia.