12 October 2017

East Africa: Global Hotels Move Into 'Stable' East Africa to Grow Their Markets

Global Hotel brands are looking for investment opportunities in East Africa banking on the growing middle class and international recognition of the region's stability.

Hospitality chain Hyatt Hotels and Resorts is expected to open six hotels in Africa, one of them in Arusha and another in Addis Ababa, with plans to expand to Rwanda, Kenya, Uganda, Mozambique, Ghana and Côte d'Ivoire.

"East Africa is stable as a market, it is diversified and there is integration between the countries," said Tejas Shah, Hyatt's regional vice-president for acquisition and development.

Hyatt has two hotels in Tanzania, and others in South Africa, Morocco and Egypt.

"Tanzania has had a tough time, but we are now seeing things moving in that market. As people get to know how to work with the new administration, Arusha is an attractive market and a medium term bet that will pay off," said Mark Dunfor, the head of East Africa at real estate and investment management firm Jones Lang LaSalle, at a media roundtable ahead of Africa Hotel Investment Forum in Kigali.

The new Hyatt hotel will be located in central Arusha to capitalise on Tarangire National Park and Mount Kilimanjaro tourism circuits.

DoubleTree by Hilton

Meanwhile, Hilton is also set to open its first hotel in Kigali, where it is planning to upscale the 153-room Ubumwe Grande Hotel Rwanda to trade under the name DoubleTree by Hilton brand when it is completed in 2018.

Hilton is also rebranding Nairobi's Amber Hotel as part of a $50 million plan to open about 100 hotels in Africa over the next five years. Hilton Worldwide is also developing a 171-room hotel called Garden Inn, near the Jomo Kenyatta International Airport.

Hilton currently operates 19 hotels in sub Saharan Africa, with a further 29 in its pipeline.

Two weeks ago, the Pearl of Africa Hotel, which has facilities in South Africa, officially launched in Kampala.

America's international luxury hotel Marriott is among the major hotels that have put money into East Africa's hospitality industry, setting shop in Kampala, Kigali, Nairobi and Zanzibar.

The firm is constructing the $98.8 million JW Marriott Hotel next to Villa Rosa Kempinksi in Nairobi's Westlands, together with Chinese firm Avic.

Marriott is also acquiring two properties in Uganda, where it has been operating the Protea Hotel for the past two years, after acquiring South Africa-based Protea Hospitality Holding.

It is also tapping into Zanzibar's tourism business with a $330 million hotel, which will be part of the Amber Resort complex, and the largest accommodation facility occupying 1,750 hectares in the northeast of the island.

Dubai-based luxury resort company One&Only has two new properties in Rwanda, One&Only Nyungwe House and One&Only Gorilla's Nest.

Hyatt said it is banking on European and Middle East airlines that launched direct flights to some African countries last year.

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