Hotels in Africa: Where to Build Them?

 Kurt Davis Jr Advisor Network, Editor's Pick, Investing, Investors, Markets, Real Estate

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VENTURES AFRICA – The race to build hotels in Africa has never been bigger than it is today. Global hotel chain Marriot International’s recent announcement of a $1.5 billion Africa expansion plan stirred the market and a recent hotel conference on Africa. The capital investment will be used to build nine hotels, amounting to a 1,300 additional rooms, by 2015 and 30 additional hotels by 2020, adding another 5,550 rooms to the continent’s hotel room count.
Marriot International’s construction plan for 2014 and 2015 still trails more aggressive developers, such as Radisson Blu and Hilton, who plan to build 60 percent-plus more hotels and more than two times as many rooms as Marriot International in a similar period. These large numbers sadly (or happily for investors) are only the beginning of a continued investment in
the hotel sector. Room rates will moderate during the next couple years. But room rates per star level will leave great opportunities for further construction across the continent.
This week’s article picks the top five countries for building a hotel or two (well…if you can afford it).
Ethiopia
Ethiopia has the 2nd largest diplomatic city, the vibrant Addis Ababa, in the world after Washington D.C yet it has an amount of hotels rooms that amounts to less than 50 percent of Washington, D.C. That statistic does not look to change anytime soon unless hotel investors get more active in the country’s capital. During the last African Union (A.U.) meeting, Sheraton rooms charged out above $700 with many hotels based on their normal price rates able to achieve 150 percent to 200 percent occupancy rates during most A.U. meetings. Diplomats and government officials willingly pay the fees but grumble at the excessive lack of rooms in the country. As business executives join the fray in the country in the near term, local hotel operators should continue to greatly benefit.