OF CARLSON Rezidor Hotel Group’s operations in the Middle East and Africa, South Africa has led the way with revenue per available room (revpar) growth of 19% for the second quarter of this year.
Hotels in South Africa are steadily showing signs of recovery, with occupancies across the sector on the up after a difficult period characterised by a combination of oversupply and lower demand in the aftermath of the Soccer World Cup in 2010.
The total revpar for Carlson Rezidor, whose brands include Regent, Radisson Blu and Park Inn, improved 13.5% for its Middle East and Africa region, driven mainly by occupancy, but also with an increase in room rates, the group said on Friday. The company’s other regions are Eastern Europe, the Nordics and the rest of Western Europe.
"All four geographic segments reported like-for-like revpar growth over the last year. The strongest development was seen in the Middle East and Africa region," the group said.
Overall occupancies have been gradually increasing from a low of 53% in 2011, compared with the pre-recession level of 72% in 2007, according to professional services firm PwC. It expects occupancy rates to pick up from last year and improve to 62% in 2016, helped by a slowdown in room availability growth, an improved economy and gains in tourism and travel, PwC said.
Earlier this month, Carlson Rezidor announced its 50th hotel deal in Africa — the Park Inn by Radisson in Kigali, Rwanda. The group had planned to reach this target at the end of 2015, but the deal saw it reach it two-and-a-half years early.
An undersupply of quality hotels catering to business travellers in the rest of Africa means hospitality development in commercial centres has become a pivotal strategy for hoteliers. This is a result of the continent’s natural resources boom and rapid urbanisation, which is leading to a rise in purchasing power, and is thus attracting investment.
The deal brings Carlson Rezidor’s total number of rooms in operation and under development in its African portfolio to more than 11,000 across 21 countries.
Andrew McLachlan, the group’s vice-president of business development in Africa and the Indian Ocean Islands, said that over the next 24 months the group would open more signature Radisson Blu and Park Inn by Radissons in cities including Freetown, Nairobi, Kigali, Libreville, Marrakech and Hammamet.
French hotel group Accor, with brands such as Mercure and Ibis, also has aspirations: it wants to open 5,000 rooms in 146 hotels in Africa by 2016. Hilton Worldwide’s long-term aim is to establish a presence in every key city in Africa.
Homegrown player Protea Hospitality recently signed a deal that will see it moving into Rwanda — its 10th African country.
The company’s CEO, Arthur Gillis, said on Friday that Africa had more development potential than just about anywhere else in the world. He said many African econo-mies were expanding rapidly and "it’s encouraging to see GDP (gross domestic product) projections of between 6% and 8% becoming reality on the back of political stability".
Operating in Africa is not without its challenges, though. Recruitment and training of staff, logistics, provision for water and power supply, as well as securing property in a good location, can be an uphill battle. Most hospitality companies agree that having a local partner who has on-the-ground knowledge and understands a country’s business and legislative framework can help.