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Accor plans 60 new hotels in Africa, including three in SA

Nairobi — Accor SA will open 60 new hotels in 14 countries in Africa in the next four years, its CEO for Middle East and Africa Mark Willis said.

During the next two years, the European hotel operator will open more than half of them in Egypt, which Willis said is rebounding after “external factors” hurt the industry. In 2015, an Islamic State affiliate blew up a Russian aircraft as it left the Egyptian resort of Sharm el-Sheikh in an attack that killed 224 people.

“Egypt is resurrecting after 10 years of a tough situation,” Willis said in an interview in Nairobi, Kenya. Egypt has overtaken Kenya’s coastal region as the preferred destination for European tourists and investors, he said, and revenue per available Accor room there has risen 20% year on year.

Kenya’s coastal city of Mombasa “is not at the forefront of people’s minds today”, he said. Only one of the target hotels will be in the East African nation known for safaris and beach tourism.

The continent has sustained unprecedented rates of economic growth, driven chiefly by sturdy domestic demand, better macroeconomic management and improving political stability.

$1bn fund

Key markets in Accor’s growth plan include Nigeria, Ethiopia and SA, where it will open 10, seven and three hotels respectively by 2020. Accor has 143 hotels in Africa, 63 of them south of the Sahara, and will promote its Movenpick luxury brand, Willis said.

The hotel group will finance the growth with more than $1bn from the Kasada Fund set up by Katara Hospitality and Accor in 2018 for sub-Saharan Africa. Accor invested $150m, while the Qatar Investment Authority unit put in $350m. The remaining $500m will be raised through bank loans, according to Willis.

It may expand through mergers, acquisitions and partnerships on the continent, including in SA, where Accor is already considering several opportunities, Willis said.

“We have a soft footprint in SA, which historically was not a focus for Accor, but it very much is today,” he said.

While Accor has considered introducing its home-sharing platform Onefinestay in Kenya, the continent is still immature for that type of product due to reasons such as security, Willis said.

“It will continue to develop, and where there’s an opportunity for Onefinestay, for sure we will put it on the table,” he said.

Bloomberg