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Marriott has a head start in the wide open African market; however, it’s also an early adopter whose results other hotel brands are watching as they weigh their own expansion options.
Marriott International Inc., the owner of brands including the Ritz-Carlton and Renaissance, is strengthening its position in West Africa as economic growth in Nigeria and Ghana boost travel and tourism.
Protea Hospitality Holdings, which Bethesda, Maryland-based Marriott agreed to buy for $186 million in January, is building five-star and three-star hotels in Lagos, Nigeria’s commercial capital, adding 400 rooms to the 700 it has in the country, Danny Bryer, director of sales, marketing and revenue for Protea, said in e-mailed response to questions.
“With the surging Nigerian economy resulting in companies around the world seeking to do business, demand for quality hotel rooms is expected to increase substantially over the next few years,” said Bryer.
Marriott, the largest publicly traded hotel chain after Hilton Worldwide Holdings Inc., will almost double its rooms in Africa to about 23,000 with the acquisition of Protea, helping it expand in a continent where a growing middle class and rising travel are fueling the fastest pace of hotel development in the world. The number of hotels in Nigeria rose 88 percent to 6,200 in the two years through December, according to the country’s tourism development agency.
Economic growth in Africa’s biggest oil producer will accelerate this year from an estimated 6.4 percent in 2013, driven by services, trade and agriculture, the Washington-based International Monetary Fund said March 7.
“Improvements in the nation’s economic outlook are motivations to investors,” Sally Mbanefo, director general of the Nigerian Tourism Development Corp., said in an e-mailed response to questions. Hotel rooms jumped to 186,000 from 99,000 over the past two years.
Protea’s expansion plans in Nigeria focus on Port Harcourt in the oil-rich Niger Delta, the nation’s capital Abuja and the southeastern state of Enugu, according to Bryer. Domestic tourism revenue in Nigeria is targeted to triple to $12 billion within a decade, creating over 400,000 jobs, Mbanefo said.
“If just 20 percent of Nigeria’s approximately 160 million population spend 10 percent of their per capita income of over $2,000 on domestic tourism, we will have an annual domestic tourism market of $12 billion,” she said.
Hotel investors and operators, finding growth slowing in mature European and U.S. markets, are expanding in Africa as the continent is buoyed by increasing trade with countries including China and rising demand for services such as lodging.
With the Ghana oilfields also creating demand for business travel, Protea will open a 130-room hotel in Takoradi in the country’s western region later this year, Bryer said.
“For the moment, we’re focused on Nigeria and Ghana, but further expansion into other West African countries cannot be ruled out,” he said.
Ghana’s economy, which has outpaced the average for sub- Saharan Africa for the past 10 years, will expand 4.8 percent, below the 5.5 percent increase last year, Samir Jahjah, country representative for the IMF said Feb. 27.
With assistance from Nadja Brandt in Los Angeles. To contact the reporter on this story: Emele Onu in Lagos at email@example.com To contact the editors responsible for this story: Vernon Wessels at firstname.lastname@example.org Dylan Griffiths, Antony Sguazzin.