Viability PPT Hospitality Round Table Tanzania 10 11 14

www.viability.ae…when diligence is due
State of the African Hospitality Industry
Keynote Address by Guy Wilkinson, Managing Partner,
Viability Management Consultants
Hospitality Round Table, Dar es Salaam, 10th November 2014

•  Hospitality and real estate development consultancy
•  Based in Dubai, established in 2006
•  Principals have consulted throughout the Middle East, as well as many
countries in Africa: Tanzania (inc Zanzibar), Ethiopia, Rwanda, Uganda;
Egypt, Morocco, Tunisia, Sudan, Chad; Nigeria
•  Specialized in providing:
–  Bankable market & ﬁnancial feasibility studies
–  Market studies in a variety of hospitality-related sectors
–  Operator selection and contract negotiations
–  Operational reviews and interim management solutions
•  Reputation for detailed work; high-quality, well-reasoned, realistic advice
•  Special thanks to: Philip Wooller of STR, Trevor Ward of W Hospitality
“Truly an expert consulting company.”
“…a most valuable contribution to our knowledge base.”
“All responses from Viability were exceptionally prompt and pertinent.”

IMF World GDP Growth Forecast Map, 2014 (%)

Sept/Oct 2013

African Middle Class is Growing
Source: Deloitte, 2012
At least 75% of population
is middle class (deﬁned as
those spending between
US$2 and $20 per day)
21-50%
Up to 20%

UNWTO World Tourist Arrivals & Revenues, 2014
•  Almost 1.1 billion
tourists
worldwide in
2013, up 5%
•  Asia & Paciﬁc
arrivals up 6%
followed by
Europe & Africa
(both 5%)
•  1 in 11 jobs
worldwide!

No Branded Supply
1.  Angola
2.  Burundi
3.  Central African Republic
4.  Comoros
5.  Democratic Republic of Congo
6.  Eritrea
7.  Liberia
8.  Mauritania
9.  Niger
10.  Republic of Congo
11.  Sierra Leone
12.  Somalia
13.  South Sudan
One African Brand
1.  Burkina Faso (1 hotel)
2.  Guinea Bissau (1 hotel)
3.  Lesotho (2 hotels)
4.  Malawi (1 hotel)
5.  Rwanda (2 hotels)
6.  Swaziland (3 hotels)
Hotel Supply & Brand Penetration in Africa, 2014
•  Total supply:
460,000 rooms
in 54 countries
(2013),
including…
•  84,000 from 27
chains as per
W Hospitality
(2014)
NAfricaSubSaharanAfrica

Maximum 2 International
Branded Hotels
1.  Bamako
2.  Djibouti
3.  Khartoum
4.  N’Djamena
5.  Port Gentil
6.  Yaoundé
YTD July 2014 Performance
Occupancy – 65.6%
ADR - $190.90
Cities With Limited Branded Supply in Africa
1
2
3
4
6
5

$0
$50
$100
$150
$200
$250
$300
$350
$400
0%
10%
20%
30%
40%
50%
60%
70%
80%
Occupancy ADR (USD)
Actual Performance Key Cities: OCC & ADR – US$ - YTD 07 14
Note: STR currently tracks 860 African hotels - 172,500 rooms

30
80
130
180
230
280
330
380
Abuja Boasts The World’s Highest ADR! (YTD 07 14 – US$)

-20
-15
-10
-5
0
5
10
15
Supply % Chg Demand % Chg
World
Cup
Arab
Spring
Arab Spring
Rebound
Global
Financial
Crisis
Africa Room Supply/Demand % Change
12-Month Moving Average – YE 2005 to July 2014

Africa Hotel Pipeline – Total Pipeline 2010-2014
Note: Sample survey from April 2014 of 27 chains/60 brands
16,909 17,038 17,217 18,065
16,449
14,801 13,700
17,109
18,191
23,282
72 75
77
73 73
77 76
100
115
142
0
20
40
60
80
100
120
140
160
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2010 2011 2012 2013 2014
Hotels
Rooms
SSA Rooms N Africa Rooms N Africa Hotels SSA Hotels

Sub-Regional Breakdown of 2014 Pipeline (% of Rooms)
Northern
41%
Southern
6%
Central
8%
Eastern
11%
Western
34%

Africa Hotel Pipeline 2014 – Top 10 Countries by Rooms
6,614
4,828
4,703
3,172
2,205
1,541
1,293
1,080 990 914
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Nigeria Morocco Egypt Algeria Libya Tunisia South
Africa
Ghana Ethiopia Senegal

Top 10 Countries: % of Pipeline Rooms Under Construction
37
58
83 84
86
72
59
68
47
55
0
10
20
30
40
50
60
70
80
90
100
Nigeria Morocco Egypt Algeria Libya Tunisia South
Africa
Ghana Ethiopia Senegal

Africa Hotel Pipeline – Top 10 Chains by Rooms
6,248 6,165
5,243
3,499
2,210
2,055
1,587 1,567 1,455
1,129
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000

Africa Hotel Pipeline – Top 10 Brands by Rooms
4,723
4,336
2,116
1,912
1,567
1,437
1,264 1,180 1,154 1,129
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000

Comparison: GCC 2014 Pipeline - Top 20 Chains by Rooms
- 5,000 10,000 15,000 20,000 25,000
Hilton
Starwood
Marriott
Accor
Rotana
IHG
Millennium
Wyndham
Hyatt
Golden Tulip
Rezidor
Fairmont Raffles
The Address
Premier Inn
Anjum
Viceroy
Time
Kempinski
Bin Majid
Four Seasons
Others
9,593
7,912
7,707
6,919
6,729
5,480
4,634
3,884
3,678
3,104
3,070
2,500
2,448
1,848
1,743
1,378
1,273
1,259
1,210
1,194
23,560
Source: Viability, June 2014 Data

East Africa Pipeline Focus
City Country Chain Hotel Rooms Year
1 Addis Ababa Ethiopia Accor Pullman Addis Ababa 316 2017
2 Addis Ababa Ethiopia Best Western Great Abyssinia 161 2014
3 Addis Ababa Ethiopia Best Western Noah 110 2015
4 Addis Ababa Ethiopia Louvre Golden Tulip Addis Ababa 90 2014
5 Addis Ababa Ethiopia Marriott Courtyard by Marriott Addid Ababa 209 2019
6 Addis Ababa Ethiopia Marriott Marriott Executive Apts Addis Ababa 104 2015
7 Amboseli Kenya Minor Elewana Amboseli 16 2014
8 Arusha Tanzania Hyatt Hyatt Regency Arusha 144 2016
9 Bazaruto Mozambique Pestana Pestana Bazaruto Villas 2nd Phasa 30 2015
10 Dar Es Salaam Tanzania Best Western Colosseum 90 2014
11 Dar Es Salaam Tanzania Rotana Dar Es Salaam Rotana 200 2018
12 Dar Es Salaam Tanzania Wyndham Ramada Resort Dar Es Salaam 136 2014
13 Dar Es Salaam Tanzania Wyndham Ramada Encore Dar Es Salaam 116 2014
14 Kigali Rwanda Carlson Rezidor Radisson Blu Kigali 292 2014
15 Kigali Rwanda Carlson Rezidor Park Inn by Radisson Kigali 161 2015
16 Kigali Rwanda Kempinski Kempinski Hotel des Mille Collines 112 2014
17 Kigali Rwanda Marriott Marriott Kigali 254 2015
18 Maputo Mozambique Pestana Pestana Rovuma 66 2015
19 Nairobi Kenya Carlson Rezidor Radisson Blu Nairobi 271 2014
20 Nairobi Kenya Carlson Rezidor Park Inn by Radisson Nairobi Westlands 145 2014
21 Nairobi Kenya Dusit dusitD2 Nairobi 101 2014
22 Nairobi Kenya Hilton Hilton Garden Inn Nairobi 171 2017
23 Zanzibar Tanzania Best Western Zanzibar 26 2014
24 Zanzibar Tanzania Four Seasons Four Seasons Resort Zanzibar 73 tbc
25 Zanzibar Tanzania Hilton DoubleTree by Hilton Stone Town 58 2014
26 Zanzibar Tanzania Hyatt Park Hyatt Stone Town 72 2015
3,524

African Hotel Pipeline to create 320,000 New Jobs
(2013 Data)
2014, 136,000 ,
43%
2015, 87,000 , 27%
2016, 70,000 , 22%
2017 onwards,
27,000 , 8%

North-South Differences in Job Creation
North Africa
•  115,000 jobs in 5 countries
•  Industry more developed
•  Pipeline growth slower @
9%
•  Hiring trends:
–  Large numbers of junior
staff
–  Rapid promotion of most
able individuals
Sub-Saharan Africa
•  165,000 jobs in 23 countries
•  Industry less developed
•  Pipeline growth faster @
23%
•  Hiring trends:
–  Inﬂux of foreign top
management
–  War to attract/retain
talented middle
management
–  Substantial investment in
training
•  80% of jobs to be created by the Top Ten hotel chains

WTTC Tanzania Report 2014 Highlights 1: Ranking

WTTC Tanzania Report 2014 Highlights 2: Employment

WTTC Tanzania Report 2014 Highlights 3: Investment

Thanks for Listening, Questions Please
Tel +971 3 344 3734
Fax +971 4 344 0907

Contact Viability Management Consultants
Guy Wilkinson
Managing Partner
PO Box 191234
Dubai
United Arab Emirates
Email: guy@viability.ae
Mobile: +971 50 450 6276
Tel: +971 4 344 3734
Fax: +971 4 344 0907
Web site: www.viability.ae

Viability PPT Hospitality Round Table Tanzania 10 11 14

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Viability PPT Hospitality Round Table Tanzania 10 11 14