AS PART of its $130m African expansion drive, the Protea Hospitality Group signed an agreement last week for the construction of another hotel in Uganda.

The company, with its partners in the property sector, aims to build 10 hotels on the continent, making it the largest investor in new hotels in Africa this year.

"This is Africa's time. Never before has the continent offered so much in terms of political stability and economic growth," Protea Hospitality CEO Arthur Gillis said.

The hotel will be built in Hoima, which is in the centre of the Albertine Rift Valley oil exploration, extraction and processing region. Construction starts in the third quarter of this year, and is expected to take 24 months to complete.

Stuart Cook, MD of Protea Hotels Uganda, said the company's rapid expansion into the country was largely being driven by business travel due to economic growth in Uganda.

According to Mr Gillis, the group hoped to expand "substantially" in Uganda in the next decade. It will also beef up its presence in Nigeria and Zambia, where its brands have grown not only in the large cities but also in the secondary nodes, as the countries' economies develop and become more sophisticated.

In Zambia, much of the development was being driven by the resurgence of the copper industry, Protea Hospitality's marketing director Nicholas Barrenblatt said.

Most of the money being invested in Protea's new properties comes from property developers. Protea will brand the hotels and manage them in return for a management fee and, in most cases, an additional incentive fee.

Protea Hotels became a wholly South African company again in April 2009 after a consortium consisting of Protea Hotels management, its black empowerment shareholders and Investec Private Equity bought back the 74% stake the hotel group sold to Australian-based Stella Hospitality Group three years ago.

The expansion into Africa by international hotel players is being driven by economic growth and an undersupply of quality hotels on the continent.

In May, Marriott International announced its plan for two hotels in Ethiopia. The two properties, located in Addis Ababa, are Marriott executive apartments which will open next year and a quality tier Courtyard hotel, scheduled to open in 2015.

According to Alex Kyriakidis, president and MD of Marriott International Middle East and Africa, the group was focusing its growth on Ethiopia, Benin, Gabon, Ghana, Nigeria and Rwanda, with a number of new properties scheduled to open over the next five years.

Last month, The Rezidor Hotel Group, which operated brands like Radisson Blu, opened its first hotel in Côte d'Ivoire.

Rezidor president and CEO Kurt Ritter said the African continent was one of the group's focus areas for future business development. The company has a presence in 21 countries across the continent, with 47 hotels.

There are, however, difficulties for hospitality players.

Construction and development can often be held back by infrastructure and regulatory constraints on the continent.

mooradz@bdfm.co.za