Q+A: Dexter Moren on the African hospitality sector

In the face of uncertainty close to home post-Brexit, we turn our attention further afield as we talk to Dexter Moren, fresh off the plane from Africa Hotel Investment Forum in Togo.

How developed is the hospitality sector in Africa?
The African hospitality sector has grown significantly in recent years. According to latest figures from the annual W Hospitality Group Hotel Chain Development Pipeline Survey the number of planned hotel rooms in Africa has risen to 64,000 in 365 hotels, up almost 30% on the previous year.

What are the prospects for future growth?
Weaker commodity prices have led the IMF to downgrade its growth predictions for the region to 3% this year but a booming population and improved business give reason for medium to long-term optimism. In the hospitality sector supply is still very constrained with 100 rooms per capita compared to 1700 in North America. These fundamentals mean it is likely that Africa will continue to grow as a target market for international hotel developers and investors.

What and where are the key opportunities likely to be for international investors and brands?
All the main brands are active on the African continent in one way or another. Several of the international hotel chains have established developments offices in Africa, the newest being Hyatt in Nairobi. Most brands are focussing on a mid-market offer moving away from signature ‘flagships’ in the main cities to compete with local brands. Inevitably some countries offer better (and less riskier) opportunities than others, currently the countries attracting most investment include Kenya, Tanzania, Ghana, Ethiopia, Uganda, Mozambique, Angola and Rwanda.

And the challenges?
Doing business in Africa is not without its challenges. The pipeline figures already mentioned conceal the fact that many projects have been on the drawing board for several years and due to lack of funding and other factors, often have no prospect of completion any time soon. We are fortunate to have been able to undertake a number of projects in the region so have some experience working with local developers and architects. Nothing happens quickly and it can be incredibly frustrating, but on the flip side for those who can afford be patient there are lots of great opportunities.